Presentation to KMWorld 2006 Audience in San Jose California October 31 on How the Principles of Disruptive Innovation, Risk Management, Corporate Governance and Enterprise Collaboration are Driving the Incorporation of Blog, Wiki, Social Networking, Free-Tagging, Prediction Market and other Web 2.0 Features and Capabilities into Traditional Competitive Intelligence Software

1. CI 2.0 – Competitive Innovation Intelligence Arik R. Johnson KMWorld 2006 Development & Leadership Institute San Jose, California USA CEO & Managing Director, Aurora WDC Conference Session [email_address] Tuesday 31 October 2006

7. Traditional CI Follows a Disciplined Process for Information Collection and Analysis Deliver, Inform & Recommend Planning & Direction Secondary Research Analysis & Production Primary Research Tactical Users & Strategic Decision Makers Needs The Traditional CI Cycle

9. Analysis is Key The Difference Between Data and Intelligence “ The competitor would make a good acquisition candidate. Its lean & mean structure would fit well with our current operations.” Intelligence: The insight that will allow you to make an informed decision “ After gathering more operational information and running a side-by-side profit & loss analysis, it appears the competitor has become highly efficient. It exceeds industry standards and has become a best-in-class facility.” Analysis: Distilled information “ Based on the D&B and the salesperson’s report, it appears the competitor has lost business.” Information: A pooling of these bits of facts, observations and rumors 2001: “The D&B report told us that the competitors plant had 100 employees.” 2004: “One of our salespeople just passed by the competitor’s plant and spotted only 30 cars in the lot.” Data: Scattered bits and pieces of facts, observations and rumors

10. Two Fundamental Competitive Analysis Model Examples SWOT Analysis Core Competence

15. Tactical CI Project Example: Cost Analysis

16. Level of CI Involvement in M&A Stage ID Evaluate Due Consum- Criteria Targets Analyze Diligence Recommend Negotiation mation Integration Level of CI Involvement High Low Intelligence Research Business Units Finance Technical Assessment Legal Executives M&A Specialists Transition Team Logistics HR

19. Different Missions, Different Approaches Specialist Slower Production Less Output, More Analytical Agenda Driven by Contact Network Lots of Subject Matter Knowledge Seeks Explanation of the Subject Investigative Very Slow, Curious, Historical Little Output, Highly Analytical Questions Official Positions, Listens to Nonspokesmen Operates Outside Routine Agenda of the Publisher Generalist In a Hurry Lots of Output, Less Analytical Agenda Driven by the Publisher Little Knowledge of Subject Matter Seeks Volume of Public Interest

21. Porter’s Five Forces Model

22. Impacts on Planning & Execution Your Company’s Plans and Execution Vision and Grand Strategy Strategic Plans Market Success Operational Projects and Programs Tactical Execution Other (More-or-Less) “Uncontrollables” Competitors’ Plans and Actions New Forms of Competition X Y Z P Q R A B C Indirect Competitors Direct Competitors Government and Regulatory The Economy Technology Market Trends Industry Rationalization Other Unknowns

25. Competitors, Customers & Technologies Are Complex Interdependencies CI is about “Seeing Clearly” through Market Illusions

27. The Duality of Intelligence Both Decisive & Incisive Sensing Incisive Scanning for Trends, there is no “Decision” to be made Recognizing “Pattern Vectors” Framework for Interpretation Implications for the Reader Bottom-Up Driven by Trends Outcome is Observation Hypothetical Decisive Frame of Reference is the Decision, Less Trend-Dependent Framework for Analysis Compares Options & Outcomes Recommendations and Trust Top-Down Driven by Issues Decision & Action vs. ‘Nariyuki’ Factual

28. Consumers “Hire” Products to Do “Jobs” for Them Concentrate Less on What Customers “Want” and More on What Customers “Need”

29. Disruptive Technology

31. RPV Theory: Building Capabilities Processes Ways to Turn Resources into Products/Services Hiring/Training Product Dev. Manufacturing Budgeting Research Values Prioritization Criteria for Decision-Making Cost Structure Income Statement Customer Demand Opp. Size Ethics Resources Assets the Firm can Buy or Sell, Build or Destroy People Technology Products Equipment Cash/Brand/Distr.

32. Disruptive Innovation Theory Sustaining Innovations Better Products Brought to Established Markets Low-End Disruptions Target Overshot Customers with a Lower Cost Business Model New-Market Disruption Compete Against Nonconsumption Difference Performance Measure Time Nonconsumers or Nonconsuming Contexts Performance

34. Process of Predicting Industry Change Signals of Change Strategic Choices Influencing Success Likely Outcome of Competitive Battles

35. The CI Think Tank Model Tasking the Research & Analysis Bureau using by KITs & Scenarios to Deliver a Portfolio of End-User Applications

36. The 2007 Aurora Enterprise CI Software Review Why a CI Software Review? (CI is not possible without it!) The Requirements of Automation: Discovery, Collaboration & Synthesis, Reporting 2007 Review vs. 2004 Approach: Discover Core Competency 12 Application/Vendors Nominated by Actual Users (6-D/6-I) 10 Selected (6-D/4-I) + Dozens of “Honorable Mentions” Comprehensive Demonstrations + Questionnaires … on to the Vendors …

37. 10 Software Application Vendors

39. Making Unstructured Data Easy to Understand Quickly

40. Acuity

41. Transforming Key Intelligence Topics into Decision Support

42. Cipher

43. Networked Collaborative Document Management for Strategic Early Warning

44. Coemergence

45. Disciplined Structure for Processing, Storage, Collaboration

46. Comintell

47. Filtered Tracking, Validated CI Management & Fast Publishing

48. Digimind

49. Structured Filtering, Key Topic Monitoring, Routine Automation

50. Novintel

51. Forms Driven Data Extraction from the World Wide Web

52. QL2

53. Agile Automation of Competitor Profiling, Monitoring & Action

54. Strategy

55. Communicating & Connecting Text Flexibly & Intuitively

56. Traction

57. Sophisticated Simplicity, Densely Analytical + Simple UI

58. Wincite

59. Aurora 2007 Enterprise Competitive Intelligence Software Review Available for Download at www.ReconG2.com November 2006