Business Intelligence + Competitive Intelligence, Perfect Together!

For those of you from New Jersey, you may remember former Governor Tom Kane’s commercials that went…New Jersey and You, Perfect Together! That was the inspiration for my title referring to how Business Intelligence (BI) and Competitive Intelligence (CI) compliment each other in doing law firm BI/CI analysis.

Some common truths:

1. Both BI and CI are important functions in becoming smarter about your firm’s performance as an organization and the markets in which it operates
2. Both BI and CI apply an analytical approach towards refining data into actionable insight
3. BI and CI are not necessarily the same thing but when combined provide a tremendous amount of intelligence than either one can alone.
   

Business Intelligence
Business Intelligence is the collection and analysis of an organizations internal data. Probably the single greatest aspect of BI is that the information is unique to your firm – only you have it. Sources include CRM activities, billing data, the documents, the relationships, etc. There is a gold mine of intelligence waiting to be sifted through (or blasted depending on how far along your firm is with regards to harnessing your internal data). The challenge with BI is getting the rules and tools within your firm to be able to go back and get at your data easily.

Competitive Intelligence
Competitive Intelligence on the other hand is the gathering and analysis of the external marketplace. That includes clients, prospects and in the most traditional sense of the definition – your competitors. Unlike internal data which is unique to each firm, external data is everywhere. There are a multitude of data sources, data providers, tools, etc to help tap into all sorts of information. The rise of Social Media (and in particular Social Search) has opened up a tremendous amount of insight into relationships, connections, trends, etc. The challenge here is to find ways to align all of this data into a format that produces trends, warning flags, opportunity signals, etc.

Perfect Together
Bringing BI and CI together creates insights greater than either can do alone and can help direct a firm’s business development efforts profoundly. Here are 3 examples:

1. Cross-Selling – Identify clients who are under penetrated by looking at hours worked across the various work types (BI) and then identify other types of legal work being done with those clients that your firm excels at along with the law firms that are performing that work (CI).
2. Prospecting – Find existing clients who are profitable, have very little revenue loss and are in line with the firm margin level (BI). Use characteristics that those clients share such as industry, geography, and type of work to profile to find potential prospects with the same similar traits (CI).
3. Geographic Analysis – One of your offices has been consistently decreasing in hours worked over the past 5 years (BI). Analyze that geography to determine if the legal work of the entire market is shrinking or just your slice of it. If the market is strong, you may want to target medium-sized firms in that area to identify lateral hire targets or as potential merger candidates to bolster that office location (CI).

So when doing BI or CI work, remember how bringing them together can add a different dimension and perspective to your intelligence efforts.