With the unification of Europe and the rapidly changing political and economic events worldwide, research executives are currently faced with the need for translated, synthesized and analyzed information from the various countries within the European Economic Commission (EEC) and from other parts of the world. Under the new economic system of the EEC, several companies will plan to expand the marketing of their products and services. Consequently, they will have a need for the collection of published information as well as the need to collect quantitative data. During the 90s, senior management will seek answers to specific questions, such as “Is the Eastern Europe consumer ready for X,Y, or Z product?” rather than reading large market research reports which do not specifically answer their questions.
Within Europe, there are several obstacles to the collection of published information (e.g. from newspapers, the media and journals). Following a detailed discussion of these obstacles, this paper discusses a methodology for the scanning, synthesis, translation and analysis of published information. Within this methodology, the paper is organized into eight parts as follows.
- Obstacles to the collection of published information within the EEC and on a global basis
- The Solution: the need for ongoing tracking systems for published information
- How to define your published information needs
- Sources of international business intelligence
- Design of the database
- Internal staffing versus out-sourcing
- Determining the cost/benefits of the system
- Strategic importance of these systems to the unification of Europe
This paper concludes with a discussion of how international and European research managers will experience an increasing need for market trend, competitive intelligence and new product activity information as new trade agreements evolve within and outside of the European continent. The paper also includes a discussion of research needs for Eastern Europe. In summary, the paper focuses on the development of new cost efficient systems to process this information, rather than utilizing older labor intensive methods.
The paper provides readers with a “how to” develop these systems along with the specifics for costs and staffing.
1. OBSTACLES TO THE COLLECTION OF PUBLISHED INFORMATION WITHIN THE EEC AND ON A GLOBAL BASIS
During the past year, we have seen a dramatic change in worldwide political and economic events. With the eruption of the gulf crisis, the demise of communism and the subsequent liberation of several Eastern Bloc countries; the demand for access to credible worldwide busi-ness and political information has increased. European research professionals are now asking themselves: “How can I provide management with accurate and timely answers to their inter-national information requests?”
Each country within and outside of the EEC has a wealth of information, or business intelligence, which is reported in their daily newspapers, general business journals and various industry and market publications. The challenge is to capture this information on a timely basis, translate the information, and synthesize and digest the information which can be used for mar-ket intelligence or research briefs, newsletters or reports.
1.1.The Language Barrier:
First and foremost, the research professional, regardless of the country in which they are located, will be faced with language barriers throughout the world. While English is becoming the accepted language for business throughout Western Europe, the research professional is faced with the challenge of capturing information from the following worldwide geographical regions:
- USA and Canada
- Western Europe (including Scandinavian countries)
- Eastern Europe
- Mexico, Latin America, South America
- Middle East
- Far East
Even within these geographical regions, the diversity of languages can be complex, such as in Western Europe. This challenges the research professional to either increase his or her knowledge and fluency in other foreign languages or to locate information providers and/or commercial database vendors who offer translated information. This paper will focus on a methodology from which the research professional can develop their own system to track international published sources. Lack of Commercial Databases which offer Business and Technical Information by Country or Geographical Region:
1.1.1. USA and Canada:
The USA has a sophisticated, if not mature, market offering of business and technical commercial databases. Both Japan and Western Europe are rapidly following us with the recent development of commercial database offerings during the past three to five years. Fortunately for the USA and other English users, many of these databases are translated into English for access using English commands.
In Western Europe, some databases do exist in specific languages (e.g. German). As the software technology improves, we will expect that these databases will be able to be translated into the local language of the users. Various publishers of international directories are searching to locate the available local commercial databases available for access and it is anticipated that more of these global database directories will be published as the world moves toward a global economy.
1.1.2 Western Europe:
Similar to the USA, Great Britain has a sophisticated market for commercial databases (both scientific and business). With the unification of Europe by 1992, however, the challenge is to develop databases which capture and report the local business and scientific information from each of the countries and then synthesize and digest the information into a structure which can offer the information as a Western European segment. Within the EEC, however, select countries use sophisticated information reporting systems along with commercial database offerings. The user, however, is faced with the obstacles of differing telecommunications systems and networks. As the unification progresses, data reporting standards and telecommu-nications access to local country databases will be necessary to enable the information profes-sional to search local database information. Both Reuters and Datastar currently have the largest systems or networks to deliver European technical and business information.
In spite of the rapid growth of Western European databases and distributors, a significant amount of business information still resides in local market research firms or in corporate libraries. For example, local branch offices and affiliates of large European companies gather business information and provide it on demand to local or international management or just simply file the information in file drawers. This type of local intelligence is typically in the local language and is collected by a research professional. The research professional is faced with the challenge of developing a system which can capture this information and develop customized databases from the material.
1.1.3 Eastern Europe/USSR:
The situation is more pronounced in Eastern Europe and the USSR. I term these regions as “virgin” territory for database development. Whereas Western Europe has had a sophis-ticated structure for research and information reporting or publishing, Eastern Europe and the USSR have had to rely on state controlled agencies to gather and collect data (scientific and business). Despite this fact, local market research firms and state agencies have had some type of data reporting methodology even without the technology.
In some countries, these local “intelligence networks” are quite sophisticated and the challenge is to locate these firms and to develop a business relationship whereby the information can be automated and disseminated to worldwide users. Clearly, the development of databases from these countries will be slow as these countries are still undergoing economic and political changes. Until the reporting and publishing systems improve in several of these countries, the integrity of the published material will continue to be questioned.
1.1.4 Mexico, Central America, South America:
Similar to Eastern Europe and the USSR, this region of the world has not had a sophis-ticated publishing or research network. While some government agencies collect and publish data, local business intelligence (e.g. industry, market and competitive data) is lacking. Once again, the challenge is to develop databases from credible sources. One of the best sources for local market intelligence is from the local affiliate or distribution offices in this region of the world. The challenge is to motivate the local offices to forward the information to a centralized library for input into the corporate intelligence system.
It is important that this region of the world does not possess the plethora of business publications such as in the USA or Western Europe from which to scan, research and abstract the material. Therefore, the research who requires information from Latin America will have to depend more on local intelligence gathering for input into their system.
1.1.5 Far East:
As mentioned previously, Japan has the most sophisticated systems and commercial database products in the Far East. While they have been long time users of European and USA databases and reports, they have recently expanded the distribution of their databases (translated into English) to the USA and European Community. Other countries such as Korea, Taiwan and Singapore are making strides to develop commercial databases and open up distribution of other international databases into their country. Here again, much of the existing data is not in electronic format nor is it is published material. Similar to Eastern Europe, much of the valuable information is in the affiliate offices and local libraries. The challenge is to capture this information on a systematic basis and disseminate it throughout an organization.
Several large market research firms have valuable data in Australia. During recent years, Australia has made strides to use and disseminate electronic information. With the increased use of telecommunications technology, it is expected that the research professional will be able to locate strategic market information from this region of world either through electronic commer-cial databases or published global market intelligence directories.
1.1.6 Fragmentation of the Information:
As we begin the 90s, research executives must be able to view their competition on a worldwide basis. Specifically, they must have rapid access to translated, digested and analyzed information. More importantly, the information must be credible. While Western Europe research executives have been gathering information and analyzing their own domestic markets over the past four decades, they are now faced with the fragmentation of published information on a worldwide basis.
We suggest that research professionals approach organizing their research information by geographical region, by industry, by market, by products and by competitors. While this may appear to be a simplistic approach, databases can be built which can systematically obtain the information from local affiliates and can detect “holes” in the data.
1.1.7 Timeliness of the Information:
Information which is local to the country or termed “domestic” can usually be obtained rapidly. However, the research professional must still have a system which systematically scans the domestic publications, determines which articles are strategic or have a high degree of impact on the business and must digest the articles to be input into a system. This challenge is augmented when publications from other European countries and from other geographical regions of the world must be scanned, digested and abstracted. Global information, even when it is structured and captured on a consistent basis, still has to be translated, formatted and input electronically for transmission. During the next five years, I believe that software and telecommunications technology will make its greatest developments in this area.
During the 90s, research executives will require worldwide news information on a daily basis and digested published information which is no older that a week. During this next decade, executives will demand “answers to specific questions” rather than piles of information or voluminous reports or outputs from database searches. As information professionals, we have to be ready to deliver against these difficult orders.
2. THE SOLUTION: THE NEED FOR ONGOING TRACKING SYSTEMS FOR PUBLISHED INFORMATION
Despite the advances in software, computer and telecommunications technology, the information capturing process, translation process and electronic input is, for the most part, manual. This will continue to be the case for the next few years, particularly in Third World countries. The research executive is faced with the following challenges:
- The need for an efficient method or system which will scan and digest the relevant newspapers and business and technical journals in the domestic country, and then expand this to the other countries within the EEC
- The need for this information to be scanned daily, translated, digested, abstracted and placed into electronic format for a market intelligence system
- The need to expand this coverage to other regions of the world.
Within the USA, several large corporations have developed a corporate or market intelli-gence system to accomplish this task. In effect, senior management has made a “top down” commitment to invest in this type of system to enable management throughout the organization to be kept abreast of the industry, the market, the competition and the products, on a global basis. Typically, these systems are managed or staffed by the strategic planning or market research departments. The information is distributed by this department to senior management and to managers throughout the organization.
As the world economies evolve, much of the valuable information will be found in published articles and journals. Unfortunately, most of this information is kept in “pockets” within the organization or is resident in other countries. Shared corporate information networks break down these barriers and enable managers throughout the organization to cost efficiently obtain the information. The role of the research professional is to be aware of these systems and to be knowledgeable as to the execution of these systems.
3. HOW TO DEFINE YOUR PUBLISHED INFORMATION NEEDS
3.1. The Strategic Information Audit
Within your own firm, I recommend that you initially survey your management and the recipients of your research to assess the utility of the published journals they are currently receiving. I term this procedure, a “Strategic Information Audit,” as the survey accomplishes the following.
- An assessment of the level of usage of current publications
- The “flow” of the information within the company (both formal and informal)
- The degree of duplication of subscriptions within the organization
- Determines the timeliness of the information and the effectiveness of “routing lists”
- Determines the cost and usefulness of newsletters, research publications and reports
- Determines which managers are using computers and what form of communications they use the most
- Enables you to draw an “information blue print” of you organization
- Enables you to assess the respondent’s wish list, which eventually becomes the optimum information network for the organization.
The strategic information audit should be conducted by a task force with representatives from the market research department, the library, the information systems department and a representative from a business unit (no more than 4-5 representatives). The procedure should entail approximately 30-50 interviews of key suppliers and suppliers of information within the organization. The audit should clearly define the utility of the published information within the company and should summarize the needs of the users. The summary of the results should list the most needed published matter, determine the international scope of the literature, determine the optimum timeliness and format of the information, and determine if an electronic system or hard copy process is the best way to deliver published business intelligence to the recipients. A copy of a sample questionnaire is included in the Appendix-1 of this paper.
4. SOURCES OF INTERNATIONAL BUSINESS INTELLIGENCE
Within Western Europe and the USA and Canada, numerous published sources of busi-ness and technical information exist. Unfortunately executives and managers do not have the time to scan and digest all of the available publications which impact the business on a daily basis, much less on an international scale. In addition to published material, a wealth of strate-gic business and technical information is published in conference proceedings and in sales personnel trip reports. This published material should also be considered for input into a corporate intelligence system. The following lists sources of international business intelligence:
- National and Regional (local) Newspapers
- Business and Scientific Journals
- Conference Proceedings
- Sales Personnel Trip Reports
- Published Newsletters
- Syndicated and Customized Market Research Reports
- Internal Business and Marketing Plans
- Internal Memoranda
- Legal Proceedings
- Research and Development Reports both internal and external to the organization
With the unification of Western Europe, the collection, translation, analysis and disse-mination of published material is essential to develop new marketing and product development plans. Clearly, it is impossible for a research department to scan all of the publications from the member EEC countries on a daily basis, translate the material, analyze the information, and input the information on an electronic network on a daily or weekly basis. This situation becomes more complex if Western European companies wish to remain abreast with the rest of the world’s publications (Eastern Europe, USA, Latin America, Far East, etc.). As a result, the following section discusses a solution to the problem with the development of a process or system within the company to handle this information.
5. HOW TO DEVELOP PROTOTYPE SYSTEMS
5.1. Design of the Database
Following your completion of the strategic information audit and definition of the publish-ed information which is relevant for tactical and strategic decision making, it is necessary to develop a low cost prototype of the system. Effectively, the design of the database should “fall out” from the needs of the users from the strategic information audit. The following outlines a sample design of a database which organizes the published information by geographical region:
Organization by Geographical Region
Topic Area: Industry Market Segments
New Product Development
Use of Technology
Clearly, the design of the database should reflect the wishes of the survey respondents. It should be noted that no two competitors view their products and markets in the same manner. The database can also be organized by competitor X,Y, or Z in a competitor profile format as charted below:
Organization by Competitive Activity
Company Overview Competitor X Competitor Y Competitor Z
� Overall Strategic Direction
� Company Organization
� Market Position
— Market Share
— Competitive Position
— Advertising and Promotion
� Financial Performance
� Distribution Strategy
� Research and Development
� New Product Development Activity
� Use of Technology
� International Strategy
� Potential Mergers, Acquisitions, Divestitures
� Future Projected Strategy
5.1 1.Format of the Database
Market intelligence systems which capture published information also require easy to use menu screens which enable the user to select the information they wish to view. Please note that the published data can be organized by geographical region, by competitor and by topic. In other words, the system can include several different ways to view or access the information.
Published information can be presented in three ways:
1. Abstracts of articles, with opinions and references added
2. Report format with summary analysis or textual information
3. Full-Text of the information
Most market intelligence systems which capture published information provide abstracts of key relevant articles, which are abstracted daily and updated in the system weekly. They may also include 2-3 page newsletters and quarterly reports. Many of these systems also include information from the “field,” or rumor information from the field sales force or from plant per-sonnel. Our experience indicates that field intelligence is not useful in the format of anecdotal rumors by itself. When this information is analyzed and verified by published information or by expert opinion, it is then suitable for inclusion in a market intelligence system. The following suggests preliminary screens for the prototype market intelligence system:
Corporate Market Intelligence System
� Quarterly Reports
� Field Intelligence
Our experience indicates that the information which is published from these systems should be analytical. Most users can read factual information from the literature itself. It is necessary to add the value of analysis both to the abstracts and the report information.
5.1.2 How to Develop the Prototype
Following agreement on the design and format of the database, the coordinator for the market intelligence system will have to select software and computer equipment. For a proto-type, we recommend developing the databases on a personal computer with a text-retrieval package. Following evaluation by a select group of users, and if the response is positive, we then recommend transporting the database to a mainframe or mini-computer which can store the information and which can be accessed by multiple users throughout the organization (on both a domestic and worldwide basis).
We recommend software packages which can provide full-text search capabilities along with graphics capabilities. Additionally, telecommunications software and datalines should be installed for users to dial up to the information on an international basis or from remote terminals from their homes.
It should be noted that both the content of the published material and the system’s opera-tional capabilities should be evaluated every six-twelve months. As the international business environment continues to change, so should the market intelligence system. This implies that the topic areas could change as frequently as quarterly or semi-annually. The overall system architecture, however, should reflect the strategic thinking of management for the next three to five years.
6. INTERNAL STAFFING VERSUS OUT-SOURCING
Clearly, the development of market intelligence systems which capture published infor-mation and provide it to the organization need an “internal champion” or a person from the research department who is willing to head up the strategic information audit effort, work with the information systems department to design the database and implement the system. Our experience indicates that it is important for the internal champion to have “top down” support from senior management. Moreover, a budget must be established for the strategic information audit, the development of the prototype, the authoring of the information, or the procurement of the information into electronic format and the acquisition of software, computers and telecommunications equipment.
The internal champion should be the system architect along with being the corporate salesperson, or the person who sells the benefits of the system to internal management and research personnel. Additionally, the person should have a technical person on his or her staff to support the database and customer service person to “hold the hands” of the users and obtain continual feedback from the database.
With regard to the decision of whether to produce the databases using the existing research staff or to contract a supplier to publish the databases, the following questions serve as guide-lines:
- Does the research department have the sufficient staff of research analysts to publishthe information? Do they have the time to scan publications, clip the material, translate and sum-marize the material and put it into database format?
- Does the department have the skills and/or the time for database publishing? Would the time of the research analysts be better spent analyzing the data from the database and publishing analytical reports or newsletters for senior management?
- Can the research department absorb the cost of the publications or can they utilize the publications from the corporate library? The cost and translation of international publications should also be considered.
- Compute a cost per abstract or quarterly report. Is it cheaper to out-source this work? Consider the quality issues. Perhaps it is more efficient to contract out the lower level abstracting and have the research analysts access the database and analyze this material to produce senior level management reports or marketing plans.
The internal champion should conduct a “make versus buy” analysis as follows:
Internal Department Annual Costs (US$)
Staffing 3-4 Research Analysts: $200,000 – $250,000
Translation fees: 30,000 – 50,000
Publications: 30,000 – 50,000
_______________________________ _________ _______
Total Annual Costs: $260,000 – $350,000
# of abstracts per year 1,200 – 2,400
Cost per abstract: $216 – $145
Total Annual Contract $100,000 – $150,000
# abstracts per year 1,200 – 2,400
Cost per abstract $83 – $63
In most cases, it is more cost efficient to contract with an outside supplier. The issue remains, however, whether the outside supplier can quickly, or over a period of time, develop the perspective you need so the abstracts and reports will add value to your analysis. Several companies with successful marketing intelligence systems contract to outside suppliers to publish the abstracts or quarterly summaries, and then their internal research analysts “manage the system” and utilize the information to publish more detailed analytical reports or answer key senior management questions or ad hoc requests.
7. DETERMINING THE COST/BENEFITS OF THE SYSTEM
In this current period of economic and political uncertainty, with tight budgets, investment in this type of system must clearly prove value or impact the corporation. The following out-lines a typical budget for a market intelligence system which captures published information.
Internal Champion, Technician, Customer Service Rep $250,000
Outside Contract Supplier $100,000
Total labor and materials costs: $350,000
Personal Computer software 1,000
Mainframe software (if do not have in-house) $100,000
Additional Costs of Computers (if do not have in-house) – ———
Please note that companies have very successfully developed very cost efficient systems on personal computers for minimal costs. It should be noted that these figures represent large corporate investments in systems which can be accessed worldwide by staff personnel.
After a period of one-two years, management will want to quantify the benefits of the system. If management can answer “yes” to any of the following questions, the systems had paid for itself:
1 Has the company increased (or protected) its market share or revenues as a result of decisions made from the material in the system?
2 Has the company developed new products or repositioned existing products as a result of direct usage of information from the system?
3 Has the company identified new business or market opportunities as a result of usage of the system (e.g. expanded into new market – Eastern Europe, mergers, acquisitions, etc.)?
4 Has the company been able to reposition itself with respect to the unification of Europe more quickly or efficiently with the use of the system?
5 Can the company’s worldwide affiliates make decisions more rapidly as a result of published information being translated, synthesized and made available in electronic format on a timely basis?
8. STRATEGIC IMPORTANCE OF THESE SYSTEMS TO THE INTERNATIONAL INFORMATION EXECUTIVE
During the next year, it will be necessary for corporations to have access to the published business intelligence of companies within and outside of the EEC. While a plethora of “Euro” publications may develop, research executives will still need business intelligence which is local to the member and non-member countries. Moreover, EEC countries will need business intelligence from Eastern Europe, USA, Soviet Union, Far East, Latin America and other parts of the world. Strategic decisions are made from published information. The companies which invest in these systems will realize the greatest dividends during the 90s.
By Ruth Stanat, 1990.