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    GIS in Business Tutorial GIS in Business Tutorial Presentation Transcript

    • GIS in Business Tutorial School of Business Research Seminar Series, Sept. 10, 2004 James Pick Julian Ray
    • Overview
      • Sample Business Problems
      • GIS and Information Systems
      • GIS Design, Spatial Data, Spatial Tools and Spatial Processes
      • GIS in Direct Marketing and Business Siting
      • GIS Demonstration
      • GIS in Vertical Markets
      • Educational Resources and Research Agendas
      • Summary
    • Sample Business Problems
    • Managing Public Transportation Assets
      • Business Driver: Regulatory Compliance
      • State and Federal Govts. spend $140-150 billion per year in construction, improvement and rehabilitation of nation’s transport assets.
      • Infrastructure includes
        • Highways
        • Bridges
        • Road Signs & Safety devices
      • GASB 34 (1999) – market driven approach to fiscal management
        • Defines standards used for external fiscal reporting
        • Applies to all public agencies which claim to follow GAAP
      • Asset Management is one approach to GASB 34 compliance
      • Key Questions:
        • What are our assets?
        • What is the value of our assets?
        • What was the past condition and performance?
        • What are the consequences of not maintaining our assets?
        • What investment options can be identified?
        • How do we measure costs and benefits?
        • How do we monitor impact of our decisions?
      • Spatial Issues:
        • Assets move and change over time
        • Costs and benefits of a transportation system can only be understood in a spatial context
        • e.g. personal/economic/societal value of a shorter commute
    • National ALI: E-911 Call Routing
      • Business Driver: Regulatory compliance
      • FCC (1997) requirement for enhanced 911 (E911) call handling.
        • Phase 1 – obtain telephone number of caller and location of cell-tower. (Completed June 2000)
        • Phase 2 – deploy technology that facilitates Automatic Location Identification (ALI), either through global positioning services or positioning determinations made through cellular telephone networks.
      • Requirement
        • Locate wired and wireless E-911 calls within 100 ft and route call to correct Public Safety Answering Point (PSAP)
        • Majority of cellular providers outsource solution to Intrado (Lucent/SCC) who implement an Application Service Provider (ASP) solution available over the Internet
      • Issues: System Design & Engineering Problem
        • 60,000 PSAP geographical boundaries
        • Up to 600 change per day
        • 315 million subscriber records
        • Over 500,000 transactions on ALI database per day
        • Peak load of 100 transactions per second
        • Maximum query time < 100 ms
        • “ 7 nines” uptime (99.99999% = < 59 unscheduled seconds downtime per year)
    • E-Commerce/Office Products
      • Business Drivers: Market Pressure & Competition
        • Commodity product – undifferentiated from perspective of the customer
        • Customer focus dictates need for online shopping
        • Competition dictates competitive delivery time/cost
      • Solution:
        • E-Commerce web-site
        • Free next-day delivery for orders over $75
      • Issues: MIS/Logistics/Operations Research
        • Company looses money on orders less than $150
        • How to connect logistics and e-commerce applications in real-time
        • Requires dynamic route planning and fleet management algorithms
        • Including the spatial context provides additional efficiencies and a framework for introduction of external factors into solution space
    • Target Marketing
      • Business Driver : Reduce costs and increase effectiveness of marketing campaign.
      • Goals : characterize customers and attempt to identify underserved neighborhoods for target marketing.
      • Issues:
        • Where do existing customers live?
        • What socio-economic and demographic characteristics of customers are important?
        • Where are similar clusters which are under-served
      • Spatial Issues:
        • Data acquisition
        • Spatial analysis
        • Predictive models
        • Reporting
    • Common Themes
      • Focus is on business problems which need innovative solutions
      • Problems can usually be solved using non-spatial methods
      • Viewing problems through a spatial lens provides additional insights into potential solutions
      • GIS component is a small part of a larger solution
      • Most difficult part of the solution is usually not the GIS part
      • However, need to understand capabilities and limitations of GIS in order to conceptualize innovative solutions and effectively introduce spatially enabled applications into organizations
    • Q&A - Discussion
    • GIS and Information Systems
    • A Geographic Information System is a toolkit for creating spatially-enabled information systems and for managing and analyzing business information of any kind according to where it's located.
      • manage customers,
      • manage vehicle fleets,
      • locate new businesses,
      • create & manage marketing campaigns,
      • organize sales territories,
      • analyze retail spending patterns,
      • provide better services,
      • understand our competition,
      • etc., etc., etc.
    • Little “g” Big “IS”
      • GIS extends the study of information systems by including spatial data, spatial processing and spatially mediated knowledge
      Tuned for processing and storing spatial data and creating spatially-mediated reports GIS Software and Middleware Extended to include storage and management of spatial data Additional training and management skills Additional maintenance, privacy and security issues
    • Supporting Roles of GIS
      • Operations Management
        • Use of GIS and spatial middleware to optimize core internal processes
        • Enable coupling technologies (location-aware systems) eg GPS, RFID, AVL and networks (cellular, sat-comm, WLAN)
        • Enterprise Resource Planning
        • Supply Chain Management/Visibility
      • Decision Support and Knowledge Management
        • Spatial Decision Support Systems
        • Knowledge base & historical reconstruction
        • Resource management and exploration
        • Business Intelligence
      • Business Functions
        • Accounting: Asset Management, Auditing
        • Marketing/Sales: product penetration, customer acquisition, target marketing
        • Competitive Intelligence/Analysis
      • Customer Facing
        • CRM
        • Customer self-service, knowledge acquisition and mobile-commerce
      • Strategic
        • Spatial data as a corporate asset
        • Risk Mitigation
    • Emerging Business Drivers
      • Globally, moving towards a knowledge driven economy where information is a “raw material”. Businesses recognizing that spatial data is valuable corporate asset .
      • Increased demand to spatially-enable business applications & increase efficiencies
        • CRM, ERP, Business Intelligence, Supply Chain Management, E-Commerce, Marketing
        • Spatial Decision Support Systems
      • New business opportunities
        • Location Based Services, Spatial Information Systems, M-Commerce/U-Commerce
        • Real-time decision support – Field Service, Field Sales, Supply Chain visibility
      • Spatial Information industry changing: broad adoption of spatial data management capabilities across enterprise data management systems
        • Oracle: 80-90% enterprise spatial data market (IDC, 2002)
    • Enterprise Business applications are increasingly using spatial services
    • Business Intelligence SAP Business Explorer Interface
    • Value of GIS Industry GIS Revenues: $1.75 billion in 2003 growing at 8% (Daratech, 2003) Does not include spatial databases or spatially-enabled applications.
      • Location Based Services
      • Will reach 748 million users worldwide by 2006
      • Western European Market: $6.6 billion by 2006 (Global: $9.75 billion)
      • 38% of vehicles will use navigation systems and services
      • 44% of Cell Phone users will use LBS (Ovum, 2002)
      Total Worldwide Expenditure on GIS and Related Activities in 2000 - $15-20 billion (Longley et al., 2001)
    • Driving Directions Print | E-Mail | Download to PDA | Reverse | New Directions Natick, MA 01760 US - Hotels - Flights Northeastern University   617-373-8300 89 Broad St, Boston, MA 02110 US - Hotels - Flights Sold to AOL for $1.1 billion!!! Total Est. Distance:  22.04 miles Total Est. Time:  31 minutes
    • Q&A - Discussion
    • GIS Design, Spatial Data, Spatial Tools and Spatial Processes
    • Design Elements of a GIS (Source: Greene and Pick, 2005)
    • Example of Processing with Simple GIS (Source: Greene and Pick, 2005)
    • Relationship of Spatial and Attribute Data in a GIS Layer Adapted from West, 2000.
    • Relationship of Spatial and Attribute Data in Multiple GIS Layers Adapted from West, 2000.
    • Map Overlay Example (Source: Greene and Stager, 2005)
    • A traditional view of the business data provides little helpful information
    • Sometimes the greatest value comes from simply looking at your data from a different perspective!
      • Over 50% of customers live within 2 miles
      • Over 80% of customers live within 4 miles
    • GIS in Direct Marketing and Business Siting
    • GIS and Direct Marketing Campaigns
      • Direct marketing includes telemarketing, direct mail, catalog marketing, and the internet. Direct mail consists of sending mail advertisements to a list of prospects.
      • Direct mailing lists are tested in local areas, and improved, before being applied for a national campaign
      (Source: Viswanathan, 2005)
    • GIS and Direct Marketing Campaigns (cont).
      • GIS can provide better focus to mailing lists. The market testing can be helped by a GIS, which would identify “the most likely prospects, early adopters, the most loyal customers, and the geographic areas within which neighborhood effects are likely.”
      •   A response rate of 5-10 percent is a good one for a direct marketing campaign.
      (Source: Viswanathan, 2005)
    • Example of Direct Marketing for Credit Union of Texas
      • Credit Union of Texas had only a
        • 1-2 percent response rate, when it mailed to 145,000 members.
      • GIS combined with demographic data increased the response rate to 8-9 percent.  
      • This was done by first narrowing the mailing list to 10,000 and concentrating on that list.
      • The narrowing was based on the small areas (block groups) of high market penetration.
      • A map is shown of the different levels of market penetration.
      (Source: Viiswanathan, 2005)
    • Level of Market Penetration from Direct Marketing Campaign by Credit Union of Texas (Source: ESRI, 2002)
    • Example – Workforce for Industrial Siting - Using the Location Quotient (LQ) LQ = (E ij /E j )/(E i /E t ) * 100. Where E ij = Employment in sub-area j in sector i; E j = Total employment in sub-area j; E i = County employment in sector i; E t = Total County employment. A location quotient greater than 100 indicates specialization in the category, and less than 100 indicates that the ZIP Code is not specialized in that category. (Source: Greene and Stager, 2005)
    • Location Quotient Example ZIP Code A has 350 workers in the bottling industry out of a total labor force of 1,000, while in the county containing ZIP Code A, there are 50,000 workers in the bottling industry and a one million labor force total. The location quotient is calculated as follows: LQ = (E ZIP /LF ZIP ) / (E COUNTY /LF COUNTY ) * 100 = (350/1,000) / (50,000/1,000,000) * 100 = 700 Zip Code A is then said to be specialized in the bottling industry because the location quotient is greater than 100. In the Los Angeles County GIS, the sub-areas are zip codes while the larger area is Los Angeles County.
    • Location Quotients for Manufacturing and Professional Employment, Los Angeles, 2000 (Source: Greene and Stager, 2005)
    • Comparison of Professional Employment to the corridor of Wilshire Blvd. ( Source: Greene and Pick, 2005) . Location Quotient of Professional Employment for same area
    • LQs for Nine Employment Sectors, LA (Source: Greene and Stager, 2005)
    • GIS Demo
      • Using ArcGIS9 software from ESRI Inc., the demo adds in four boundary layers (with associated tables), computes LQs for manufacturing and professional services for ZIP codes in LA, displays the results, and adds on finished map appearance.
      • Employment table for LA County
      Calc (([CAT31]/[ZIP_Total])/(0.280))*100 Ratio of Sector to County employment Employ-ment Descrip-tion NAICS Code 0.156 346,290 Professional services 54 0.280 622,302 Manufac-turing 31
    • Q&A - Discussion
    • GIS In Vertical Markets
    • Vertical Markets
      • So far, discussed GIS as a horizontally aligned technology addressing issues faced by many types of organizations across broad spectrum of industries
        • Over 80% of all business data has spatial components
        • Proliferation of GIS technologies has reduced real costs of implementation
        • Major vendors focus on spatial toolboxes rather than product differentiation or market segmentation
      • Next, examine some traditional GIS applications in businesses
      • how big a house they want,
      • how many rooms,
      • what kind of neighborhood
      • which school district
      • proximity to which services
      Potential home buyers can identify :
    • Retail/Site Selection/Marketing
      • Site Selection
      • Find best locations for new stores
      • Identify inefficient stores
      • Trade Areas
      • Market Penetration
      • Market Share
      • Target Marketing
      • Understand customer demographics
      • Identify untapped enclaves of future customers
      • Direct Mailings
    •  
    • Utilities & Telecommunications
      • Service Level Agreement (SLA) Management
      • Customer Relationship Management
      • Field Service
      • Spatial Decision Support Systems
      • DSL Queries
      • Call-Before-You-Dig
      • Outtage Analysis
      • Meter-Reading optimization
    • New Directions: Web Services “ SPECIAL REPORT: Microsoft & AT&T Wireless join forces in providing Location-based Services”
    • Q&A - Discussion
    • GIS in Business Research Areas
    • MIS issues & GIS
      • Management
        • Staffing & Cost
        • Demonstrating Benefits
        • Best practices
        • ROIs
      • Security & Privacy
      • Data Quality
      • Database Management
        • Managing spatial data requires different DBA skills
      • Transaction Management & Data Concurrency
      • Enterprise Application Integration & B2B Data Sharing
        • Middleware interoperability is not yet standardized
    • Research on GIS and Information Systems
      • GIS has lagged other business/IT areas for academic research because it only took off in industry in the 1990s and because much is proprietary.
      • Academic publication is slight, for instance Esperanza Huerta et al. (2005) demonstrated that GIS/DSS research consisted on only nine peer-reviewed studies in leading conferences and journals from 1990 to 2002.
      • Academic interest is picking up.
        • AMCIS meeting tracks (5 years incl. 2004)
        • Several research centers (Wharton-Real Estate, University of Pennsylvania; Univ. College London)
        • Books (Reeve and Petch, GIS, Organisations and People , 1999; Grimshaw, Bringing GISs into Business , 2000; Pick ed., GIS in Business , 2005)
    • GIS and Visualization
      • This research area is diverse drawing on psychology, educational media, computer science, geography, earth sciences and visualization.
      • Examples :
      • One study examined the user’s process of taking map contents and applying them to “explore, analyze, and visualize spatial datasets to understand patterns better” (Crampton, 2001).
      • Another experimental study analyzed gender differences in spatial ability (Montello et al., 1999).
        • Women subjects were better on static object-location memory tasks, while males were better in new acquisition of spatial knowledge from places recently visited.
        • No gender differences existed on map-derived knowledge.
    • Areas of Technical GIS-IS Research
        • Spatial modeling
        • Database Design and systems modeling
        • Use of Intelligent Agents and Innovative Systems
        • Middleware & Transaction Processing models
        • Business Intelligence & Spatial Data Mining
    • GIS and Organizations
      • This line got started by investigators in the public sector, such as planners and urban geographers.
        • Books are largely drawn from these disciplines (Campbell and Masser, 1995; Reeve and Petch, 1999; Craig et al., 2002).
      • The IS literature has few organizational studies of GIS.
      • Methods have included case studies, grounded theory, actor-network theory, and adoption-diffusion theory and models.
    • An actor-network approach to study of GIS adoption in India
      • An IS longitudinal study examined adoption obstacles for GIS applied to wastelands by Indian district governments (Walsham and Sahay, 1999).
        • Actor-network theory utilized.
        • Over three years, the researchers changed from impartial observers to actively involved field investigators.
        • The concept of actors forming a network over several years was powerfully applied to GIS in a struggle for acceptance in India.
    • GIS in Marketing Research
      • Basics. Marketing facilitates exchange of goods and services. Space is important in many aspects of that exchange.
      • Potential areas of research
      • Use of GIS helps marketers
        • trace the adoptions and diffusion of products,
        • estimate pricing based on micro-areas,
        • promote and sell by zones and regions, and fine-tune advertising and direct marketing.
      • In distribution of products, GIS enhances efficiency of physical flows of materials, as well as information and cash flows, by recognizing location.
      • GIS assists marketing strategies through spatially-enhanced market segmentation, customer relationship marketing, and competitive analysis.
      • These are all areas for potential research that combines marketing and spatial analysis theories and applications.
    • Other Research Areas
      • Effects of leadership and sponsorship on successful adoption
        • Best practices and critical success factors
        • Benefits
        • Risks
      • Accounting/Finance
        • Value of Intellectual Property
        • Accounting Intangibles
      • Security, privacy, and ethical issues
        • Locational information on persons can violate privacy
        • Increasing risks when interfacing with coupling technologies
    • Q&A – Discussion on GIS Research
    • Educational Resources
    • ESRI Software Available for Use
      • Non-Specific
        • ArcGIS Desktop : Windows GUI, basic data management, spatial tools, customizable. Easy to use.
        • ArcInfo : Command Line Interface, Very powerful & extensible, low-level functionality. Difficult to learn and use.
      • Business Specific
        • BusinessMAP : Windows GUI, pre-packaged data and functions, targeted for sales and marketing
        • Business Analyst : More powerful, uses ArcGIS Desktop, lots of data, sales, marketing, supply chain, business intelligence.
        • ArcLogistics Route : Supply chain and logistic operations, pre-packages data, Windows GUI. Easy to learn and use.
        • Verticals: several industry specific systems are available (Utilities, Land Management, Pipe Line, Environmental etc.). Usually build on top of ArcGIS Desktop.
      • Developer
        • ArcIMS : ArcInfo web server interface.
        • ArcGIS Engine : spatial processing middleware (COM)
        • MapObjects : spatial middleware (Com and Java), mostly mapping
    • Spatial Data Available for Use
      • Pre-Packaged
        • GIS vendors usually include a lot of spatial data and have additional data for sale
        • Geography Network ( www.geographynetwork.com )
        • 3 rd party Data Providers: GDT, NavTech, TeleAtlas
      • Governmental
        • Census (Infrastructure, Population Data)
        • Digital Terrain Models (3-D Maps)
        • Transportation systems
        • Land Use
        • Planning
      • Business Intelligence
        • Most business gazetteers are available (Dunn & Bradstreet, Vicinity etc.)
      • US has most data commercially or publicly available followed by Europe, South America, South East Asia and increasingly Africa.
    •  
    • Some books to get started
      • Boyles, David (2002) GIS Means Business , Volume 2, Redlands, California, ESRI Press.
      • Clarke, Keith (2003) Getting Started with Geographic Information Systems , Upper Saddle River, New Jersey, Prentice Hall.
      • Craig, W.J., T.M. Harris, and D. Weiner (eds.) (2001) Community Participation and Geographic Information Systems , London, Taylor and Francis.
      • Grimshaw, David (2000) Bringing Geographical Information Systems Into Business ., 2nd Edition, New York, John Wiley and Sons.
      • Jankowski, P. and T. Nyerges (2001) Geographic Information Systems for Group Decision Making , London, Taylor and Francis.
    • books (cont.)
      • Longley, Paul.A., Michael.F. Goodchild, David.J. Maguire, and D.W. Rhind (eds.) (2000) Geographical Information Systems , Two volumes, New York, John Wiley and Sons Inc.
      • Pick, James B. (ed.) (2005) Geographic Information Systems in Business , Hershey, Pennsylvania, Idea Group Publishing, (available 8/15/04 and can be ordered from www.idea-group.com or www.amazon.com )
      • Reeve, D.E. and J.R. Petch (2002) GIS, Organisations and People: A Socio-Technical Approach , London: Taylor and Francis.
      • Thrall, Grant (2002) Business Geography and New Real Estate Analysis . New York: Oxford University Press.
      • Tomlinson, Ralph (2003) Thinking About GIS: Geographic Information System Planning For Managers , Redlands, California, ESRI Press.
    • Summary
    • Why is Business GIS still Nascent?
      • Focus is on business problems which need innovative solutions
        • Need a business focus to understand constraints imposed by organizations in order to create successful outcomes. Typical (non-business) reaction is to throw technology at a problem and hope it works.
      • Problems can usually be solved using non-spatial methods
        • Increasing business pressures warrant innovative solutions and increased efficiencies which can be gained by including additional dimensions in the problem space.
        • Some problems are inherently spatial and a spatial solution is most efficient.
      • Viewing problems through a spatial lens provides additional insights into potential solutions
        • A spatial lens can initiate new dialog, workflows and processes which have been shown to be effective in gaining competitive advantage.
        • Requires high-level commitment and leadership to overcome inertia in less-agile organizations.
    • Why is Business GIS still Nascent?
      • GIS component is a small part of a larger solution. Most difficult part of the solution is usually not the GIS part
        • Need to be able to integrate GIS data and components with new and legacy systems in a cost-effective and efficient manner.
        • Requires GIS industry to understand the business context and create appropriate tools. Integration only a recent focus of GIS industry
      • However, need to understand capabilities, costs and limitations of GIS in order to conceptualize innovative solutions and effectively introduce spatially enabled applications into organizations
        • Not a silver bullet but a tool which has shown to be effective if used judiciously
    • Workforce Issues
      • The industry remains focused on four-year and advanced degrees. However, to meet industry growth requirements, and requirements within the applications and geospatial users arenas in particular, employers need to examine alternatives to the traditional pipeline . These alternatives include training provided by technical and community colleges. The fastest emerging occupations within the geospatial technology industry require technical skills; however the industry does not have enough training models or curricula to develop the necessary pipeline of skilled workers.
      • The industry needs to define the occupational characteristics outside of the four-year and advanced degree levels for individuals interested in entering the field, especially within the applications arena. Those interested in entering the field must also recognize that employers seek employees who possess soft skills as well as technical skills .
      • The public is not aware of the necessary skill sets and competencies needed to prepare for the diverse career opportunities available within the geospatial technology industry.
      Source: Department of Labor, Sept 2004
    • Q&A – Summary Discussion