This column is sponsored by ESRI
Organizations that don’t make use of geoinformation are certainly less informed, and many disregard the geographic perspective at their peril. Failure to understand the application of geoinformation in business practice is largely due to a lack of awareness or a feeling that the costs outweigh the benefits. It’s up to the geospatial industry as a whole to continue to inform the business community about the benefits, and to illustrate the lowered entry cost that current tools offer (primarily through a web services approach). Geoinformation has never been more robust or timely than it is right now, and the cost/benefit ratio for investments in this technology are exceedingly favorable.
With regard to risk for not using geoinformation, risk may be too strong a word for many organizations. Risk implies measurable negative impacts from not using geospatial information. There are certainly a large number of organizations that could greatly benefit from the use of geospatial information, but there are few that face negative impacts that would affect their ongoing operations if they do not use this technology. We must also keep in mind that there are still a surprising number of businesses and even whole industries that still get by with very little application of computer technology, let alone sophisticated business intelligence tools that factor in location.
There’s still a great opportunity for further penetration of technology in business. Geoinformation provide excellent returns because it can provide a valuable level of insight to most organizations that will positively affect their bottom line.
Technology for Insight
Very few technologies provide the kind of insight that geospatial information and spatial analysis can provide. The beauty of geospatial tools is that they condense information in a visual format that can quickly convey trends about business through the application of a geographic approach. For many applications, this view is much more powerful than charts, graphs and reports. The insight gained from spatial analysis and visualization can also be quite immediate, taking information represented in spreadsheets and other tabular forms, combining it with other critical information, and condensing this data into insight that can be acted upon.
For instance, the area of geodemographics is a very valuable tool for insight into customer behavior. It’s been demonstrated that individuals with similar incomes, values, and activities tend to cluster together. By understanding the profile of your customer base, and the neighborhoods where similar people live, a business can expand in locations with a high degree of certainty for success. Similarly, an advertising campaign can be tailored to have a very strong response by knowing the profile of your customer and targeting areas that match that profile.
Global Change
We live in an era where many global trends will impact businesses of all types. These trends of global change are largely driven by an increase in population that results in a scarcity of natural resources. The issues of scarcity are a huge problem for business as it introduces a volatile instability that is hard to plan for, and an escalation in commodity pricing that makes it terribly difficult to make a profit.
Related to population and natural resource scarcity is the issue of climate change. A warming climate comes with a number of weather-related risks, and adds further instability to the business environment. The increasing ferocity of hurricanes, the growing issue of floods, and pending sea-level rise that will impact all coastlines puts a great many businesses at high risk for loss of property and loss of customer base.
Geospatial information is a valuable tool to assess the risks of global change. While many of these risks can not be entirely mitigated, a business can take a strong look at their exposure to risk and insure against devastating losses.
Geoinformation for Efficiency
Geoinformation and technology can be very easily applied to operational efficiency in a number of areas. With the high price of fuel, there a large number of geospatial applications that can assist fleet managers and those that travel to decrease the distance traveled, and the time that vehicles idle. One excellent example of this cost savings is UPS, who have determined that left turns across traffic take more time, increase emissions, burn fuel and involve safety risks. UPS has automated their routing technology to eliminate and minimize left turns, and have estimated a savings of 30 million miles and 3 million gallons of gas. Geoinformation is at the heart of this innovative routing and at the heart of the calculation to estimate the cost savings.
Another fuel-related case study that uses highly-accurate geoinformation for great efficiency gains is the research that is being done by Intermap. Intermap’s highly accurate elevation data sets are being used in research in the heavy trucking industry to determine if intelligent transmissions that can anticipate the hills ahead, and gear down accordingly, can save significant fuel costs. The preliminary research by Auburn University indicates that there’s a potential 3 percent fuel savings, which across the industry translates to a fuel cost savings of more than $3 Billion. Geoinformation has become an integral technology for reigning in costs, particularly in organizations dependent upon transportation and for those that are distributed across broad geographies.
In areas that are highly susceptible to natural disasters, or those that depend heavily on non-renewable energy, the case can be made that those that don’t use geoinformation are at higher risk than those that do. I think the stronger argument to convince all companies to use this technology is that there are strong bottom-line benefits that come from operating a much more efficient organization.
Read what Jeff Thurston has to say on this subject here.
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