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Preemptive Intelligence

The Department of Homeland Security's concept of an information sharing and analysis center — designed to watch for crisis signals so that it can respond rapidly and intelligently if one does unfold — has merit for private businesses. Here's why

This article was originally published in November 2003.

The Department of Homeland Security's concept of an information sharing and analysis center — designed to watch for crisis signals so that it can respond rapidly and intelligently if one does unfold — has merit for private businesses. Here's why.

Information sharing and analysis centers (ISAC) enable and enhance the production, analysis, distribution, and coordination of timely and accurate intelligence information. Intelligence and law enforcement agencies such as the Department of Homeland Security (DHS) are using ISACs to derive indicators and warnings from intelligence data. Intelligence analysis is a core component of homeland security, and the ISAC supports that mission by helping the government anticipate, preempt, and deter threats to the homeland.

The ISAC is viable in commercial industries as well. Companies can use the ISAC model to grow their market and become more efficient, cost effective, and profitable. Like the DHS, commercial ISACs can watch for data that indicates events that might negatively impact a company's goals. ISAC-produced information can create mechanisms that detect important changes or signals in the political and social environments, for example, social unrest that may predict a decrease in the popularity of a firm's products.

A recent example of this is the launching of a new Turkish soda. Drinking it, a series of television ads claimed, would make you more Turkish. Here we have a small foreign bottler exploiting Turkey's ambivalent feelings toward the United States and its associated Pepsi and Coke products (never mind that the actual cola products are not made in the United States and employ largely Turkish citizens).

An important role of an ISAC is to look for the precursor signals associated with different types of social, economic, and political events or crises. If the signals are collected and properly interpreted or measured, the information can be used to avert or diminish the impact of a crisis.

Just what is a crisis? A crisis is a set of events, usually of ambiguous origins, that have the potential to threaten an organization or one of its critical goals. The associated events are fairly improbable and infrequent, but when they occur they have a devastating impact on the organization. The belief is that when a crisis occurs businesses must be able to make decisions quickly. If an organization can detect events and understand the repercussions of these signals, it can respond by collecting additional information and selecting business strategies that can mitigate negative events or exploit positive events.

But in order for companies to react, they must be aware of these signals and, more important, the presignals associated with the event or crisis. The company must know what type of signals to look for, be able to sift though massive amounts of data (such as legislative initiatives, newspapers, Internet articles, and so on), find the indicators of those signals, and have a strategy in place for how to react to the signal. The challenge, of course, is determining what signals to look for and then measuring the appropriate indicators of the existence of the events.

Requirements First

Successful ISACs are driven by requirements, which are traditionally derived from the goals for the organization. For the DHS, these requirements are threats to the homeland. For a commercial firm, it is the short- and long-term objectives relevant to the business enterprise. For example, these objectives could be accelerating product growth, expanding a family of products, growing profitability, improving investment application, increasing efficiency, and/or maximizing cost effectiveness.

Another set of goals or requirements is aimed at reducing the impact of negative economic, political, social, physical, and natural events. The types of signals that might be of concern include changes in economic markets, government, and the product business, financial fluctuations, cultural viewpoints of international events, weather conditions, advertising, marketing and promotional programs effectiveness, raw material cost and availability, earnings and revenue forecasts, laws and regulation change, developing and emerging markets, patents, copyrights, trade secrets, and a changing corporate image.

ISACs have five basic layers: data collection, data transformation, data warehouse, signals analysis, and signals application.

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