This paper briefly describes what competitive intelligence is, then proposes a competitive intelligence initiative along with suggestions for a structural framework, scope, and individual skills and tools necessary to be successful.

1. A Framework of Competitive Intelligence:
Helping Manage Risk More Effectively
Andrew M. Amalfitano
Norwich University, Vermont
July 2010
© Andrew M. Amalfitano, July 2010 Page 1

2. Introduction
Between 2008 and 2018, healthcare will generate more jobs than any other industry
(approximately 3.2 million), primarily as a result of the aging population; healthcare
occupations are also among the fastest growing with over 50% new occupations being in
healthcare.[1] The question is, will one Colorado hospital be in business to participate in this
growth.
To remain viable in a highly competitive market, hospitals will need to create strategies that
stand up to the continued financial pressures of the industry. Competitive intelligence must be
part of those strategies. Since all hospitals are on nearly the same playing field, the challenge is
to differentiate based on real, relevant, timely, and useful data.
This paper briefly describes what competitive intelligence is, then proposes a competitive
intelligence initiative along with suggestions for a structural framework, scope, and individual
skills and tools necessary to be successful.
What is Competitive Intelligence?
To ignore our environment or practice superficial reviews of our competition will surely keep us
at a disadvantage. The risk to our business viability increases and our competitive advantage
decreases without a constant vigil according to a systematic strategy.
Competitive intelligence is being alert for reliable information, gathering that information, and
knowing what to do with it. The process can include the collection, organization, analysis,
understanding, interpretation and development of information which helps an organization
differentiate itself from its competitors and reduce the risk of unknown actionable strategies.
Johnson (2010) defines competitive intelligence as "... the purposeful and coordinated
monitoring of your competitor(s), wherever and whoever they may be, within a specific
marketplace." [2]
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3. We must understand what types of external events may impact our organization and what to
do to prevent that impact. Next, collection of data is worthless without relevance, so we must
convert the data into intelligent, relevant information. That involves collating, organizing, and
integrating this new information with other related data points. Analysis should be performed
by competent and trained strategist who understand both the big picture and the details.
Finally, in order for the data to become useful and a competitive advantage, we must know
how to interpret and communicate our findings.
Question types should address both the internal and external environments. The answers to
these questions will change overtime, thus a repeatable, yet flexible process is necessary to
ensure our information is relevant and current. Goodman suggests the following, not
exhaustive, list:
________________________________________________________________________
"Corporate Picture, Focus: Company & Competitors
 When did this company begin? How did it develop?
 Who leads this company?
 What are this company's plans?
 What does expert opinion say about the company?
 Who are the leading competitors?
Industry Environment
 How did this industry begin? Major developments?
 How are products made? Components relied upon?
 Any multi-industrial linkages?
 What technological developments will affect this industry?
 How do I update these analyses?
Socio-Political Environment
 What government or industry regulations affect operations?
 What current or pending legislation will be affecting operations?
 What market changes affect operations?
 What economic indicators would affect operations?
 What market barriers exist in U.S.? Internationally?" [3]
________________________________________________________________________
Collectively, these types of questions can help keep a 'finger on the pulse' (no pun intended) of
the hospital industry and marketplace.
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4. Why is an Initiative Needed?
The hospital has experienced over a 20% reduction in outpatient cases since the beginning of
the recession in 2008.[4] Sawyer (2006) indicates that hospital care is shifting from inpatient to
outpatient.[5]
Challenges faced by the hospital are many and developing dynamic strategies to anticipate
market risks is certainly a priority. Some examples of market risks include:
 Physicians deciding on the flow of patients, many times without the patient making a
choice
 Managed care contracts dictating approved hospital (vendor) lists including agreeing or
not to what types of procedures can be done by which doctors at which locations. (This
one boggles the mind!)
 Governmental regulations at both the state and federal level can affect the hospital's
accreditation and ability to market to new audiences (due to privacy laws etc)
 The advent of the outpatient clinics (not all are connected with a local hospital) can take
away business more so during a down economy
Many of these challenges represent a risk to the financial stability of the hospital and the
business of the hospital may be in jeopardy, at least in the short term.
Initiative
The purpose of the competitive intelligence initiative is to protect the hospital from risks that
may permanently impact the viability of the business and which help achieve the stated
mission.
A successful competitive intelligence initiative encompasses a holistic view of the hospital and
works in concert with and support of the mission, vision, and goals. This is accomplished by
successfully implementing a protection system that proactively monitors, collects, and
© Andrew M. Amalfitano, July 2010 Page 4

5. communicates information to decision makers who can respond in a timeframe that mitigates
the risk and/or creates an opportunity to promote the business.
The initiative scope is all internal and external risks to the hospital business.
The initiative should include these primary elements:
1. Awareness and commitment of senior staff
2. Identification of risk area that could most impact the business viability
3. Formation of objectives to be accomplished including how to use the intelligence
information when it is obtained
4. Institutionalize the process, obtain the tools (software, metrics, mechanisms to collect
data, etc), and select individuals with the key skills necessary to accomplish the
objectives.
5. Perform the actual gathering, storing, organizing, and reporting of the data become
information taking into account event timing, currency of the information, and a process
exception that allows for quick actions (the latter is particularly useful to manage
disinformation and protect intellectual property or brand image).
6. Communication of information to only the people with a need to know who are
equipped to understand, interpret, and take action as needed
7. Follow up and revitalization of the process in a way that considers new and emerging
threats to the business.
Sikich (2003) recommends ten key actions to a company can take now and many of these are
easily applied in the hospital business: [6]
1. "Make your enterprise an unattractive target
2. Revise employee screening processes
3. Validate business, community, and government contracts
4. Assess business continuity plans
5. Train and education your workforce
6. Equip your workforce
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6. 7. Review leases and contracts for risk exposure
8. Assess value-chain exposure to supply disruptions
9. Review insurance policies and conduct cost/benefit analysis
10. Communicate commitment"
The basic organizational structure should include representative members of the key staff and
those who have a value to offer the process. In the case of the hospital, this should include the
following identified individuals(by title only):
a. CFO
b. VP Technology
c. Medical Director
d. Director of Information Systems
e. Safety Manager
f. Associated staff of each above as needed to perform the data process steps
g. Others as identified by the CEO
The general set of skills required by the team collectively includes project management, data
analysis, metrics and statistics, marketing and business development, the ability to apply
differential analysis of alternatives, and adept decision-making skills.
The above represents a preliminary suggestion to begin the dialogue necessary to complete a
full competitive intelligence initiative.
Conclusion
The challenges facing the hospital industry may cause some to incur significant financial
impacts. Understanding what those impacts are, how they are caused, and what preparations
can help mitigate or reduce the effects can be accomplished with a robust competitive
intelligence system.
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7. Citations
[1] US Department of Labor, Bureau of Labor Statistics, (Feb 2010). Retrieved 7-17-10:
http://www.bls.gov/oco/cg/cgs035.htm
[2] Johnson, Arik R., (2010). "What is Competitive Intelligence?". Aurora WDC consultancy. Retrieved 7-16-10:
http://www.aurorawdc.com/whatisci.htm
[3] Goodman, Richard A., (Jan 2010). "Competitive Intelligence". Retrieved 7-16-10:
http://www.anderson.ucla.edu/x14441.xml#A-1
[4] VP finance, Anonymous Colorado Hospital, Interviewed by Andy Amalfitano October 2009
[5] Sawyer, Mike, (Jan 2006). "Competitive Intelligence in the Healthcare Industry-Part One". Southern Regional
Health System. Retrieved 7-17-10: http://www.directionsmag.com/article.php?article_id=2087
[6] Sikich, Geary, W., 2003. "Integrated Business Continuity-Maintaining Resilience in Uncertain Times". Penwell
Corp Oklahoma 57-58, 138-139, Chapter 8
References
Apgar, David, 2006. "Risk Intelligence- Learning to Manage What We Don't Know". Harvard Business School Press
Boston 51-52
Aware Inc. "A Brief Guide to Competitive Intelligence". Aware Inc, Retrieved 7-17-10: http://www.marketing-
intelligence.co.uk/resources/competitor-analysis.htm
© Andrew M. Amalfitano, July 2010 Page 7