NEW YORK, NY, Feb. 16, 2005 -- A majority of U.S.-based companies that claim to use competitive intelligence (CI) to guide their decision-making processes either don't use intelligence enough or use it the wrong way. This excludes nearly 30% of companies that don't even have, or don't feel the need for, a CI system, despite today's ultra-competitive environment.

These are two of the key findings in "Ostriches & Eagles," a survey conducted by business intelligence consultants Outward Insights, LLC on the effectiveness and use of CI across a number of industries.

"In what is arguably the most competitive global marketplace in history, a surprisingly high number of companies do not consider intelligence for strategic reasons, to assess competition or to devise operational plans for their businesses," said Kenneth Sawka, a principal at Outward Insights. "And for those companies that have an organized CI function, these systems tend to be ineffective or underdeveloped."

Among other key findings:

-- Wide industry differences were discovered among respondents.

-- Twenty-nine percent of respondents admit that they do not have "an organized and systematic way to deliver competitive intelligence," including 14% of the respondents with more than $1 billion in revenues.

-- Of those lacking "an organized way," 28% said they don't have a need for it and 17% said they are unsure how to do it.

-- Nearly 40% said they "rarely or never" incorporate likely competitor reactions into their new product plans.

-- Bank of America is the top "eagle," the best corporate intelligence user, according to the respondents.

"Each year, top companies spend millions of dollars on systems to analyze their internal information, but investing in their intelligence functions to help anticipate changes in the external environment tends to fall by the wayside," said Bill Fiora, principal at Outward Insights. "Yet, the biggest threats and opportunities come from outside, not inside, an organization. When an $800 million new drug or a multi-billion dollar merger are on the line, it's prudent and necessary to use CI to assess what threats might exist."

Indeed, one of the most beneficial aspects of competitive intelligence - the ability to receive early warning of competitor activity or emerging industry trends - is going largely unrealized. Only half of the companies surveyed said they had a process for "delivering early warning of emerging threats and opportunities."

Roadblocks to Effective Intelligence

Almost two-fifths (38%) of respondents feel that CI does "not have sufficient stature" in their organizations to have a "significant impact," including 30% of those from companies with revenues of more than $1 billion. One-third (33%) of all respondents do not believe that their company's CI professionals have "sufficient skills and experience" to meet their needs.

Additional problems respondents believe hampers the success of CI in their respective companies includes:

-- Insufficient funding - 43%

-- Internal bureaucracy - 41%

-- Intelligence team lacks sufficient clout - 28%

-- Executives do not recognize value of intelligence - 20%

Industry Differences

Dramatic differences were noted among respondents from different industries. For example, just 27% of hi-tech respondents said they integrated competitor reaction into their new product planning while insurance (72%) and pharmaceutical (65%) respondents rely on it much more.

Overall, financial services companies were less likely to have organized intelligence (61% vs. 71% norm) and less likely to make intelligence an integral part of their strategic planning process (78% vs. 85% norm) versus insurance, pharma and hi-tech companies. Hi-tech companies were most likely to have organized intelligence (82% vs. 71% norm), and insurance companies were most likely to make intelligence an integral part of their strategic planning process (100% vs. 85% norm), the best percentage of all industry groups in each category.

The Outward Insights survey was conducted in November and December 2004. The survey consisted of telephone interviews with 100 senior executives at U.S. corporations in the aerospace, financial services, insurance, hi-tech, pharmaceutical, information services and utilities industries. Nearly two-thirds had revenues of more than $500 million and 37% had revenues greater than $1 billion.

Complimentary copies of the survey report with complete industry totals are available by contacting Danielle Rumore at danieller@blisspr.com or by calling 212-840-1661.

About Outward Insights

Founded in 2001, Outward Insights is a competitive intelligence and strategy firm that provides its clients the skills, tools, and counsel they require to anticipate external threats, identify business opportunities and develop strategies to achieve leadership positions. It works with leading companies to design and install competitive intelligence systems, and apply novel techniques like scenario planning, war gaming and competitor modeling to help clients develop robust strategies.

Bliss, Gouverneur & Associates
Danielle Rumore/Donna Stoehr, 212-840-1661
danieller@blisspr.com/donna@blisspr.com