GIS: It’s Time Has Come for Business James B. Pick University of Redlands Redlands, California, USA [email_address] Orange County CIO Breakfast Round Table Thursday, October 9, 2008 Source: GeoVector
Goals of the Talk <ul><li>Explain what GIS is today </li></ul><ul><li>Discuss the movement of GIS towards web and mobile platforms </li></ul><ul><li>Examine Enterprise GIS and its challenges </li></ul><ul><li>Present the trend of GIS as a strategic force and competitive weapon </li></ul><ul><li>Management Considerations </li></ul><ul><li>Conclusions </li></ul>
Definitions of GIS and Spatial Technologies <ul><li>GIS (Geographic Information Systems) </li></ul><ul><li>consist of the following elements: </li></ul><ul><ul><li>Data-base of attributes </li></ul></ul><ul><ul><li>Spatial information </li></ul></ul><ul><ul><li>Some way to link the two </li></ul></ul><ul><li>Geographic Information Science (GI Science) </li></ul><ul><ul><li>The scientific principles of geographic information. </li></ul></ul><ul><ul><li>Note : this terminology mainly used by academics in GIS and geography. </li></ul></ul><ul><li>Spatial Systems (equivalent to “GIS”) </li></ul><ul><li>Spatial Technologies </li></ul><ul><ul><li>A group of inter-related technologies that include GIS, GPS, Sensors, Remove Sensing, and Spatial Mobile Devices </li></ul></ul>
Overlay of Characteristics in Land Use Planning. Its early uses in 50s and 60s Jacqueline Tyrwhitt in 1950 started the use of overlays – map layers that could be exactly registered on top; of each other – for land-use planning and architecture. This was carried much further by Ian McHarg in his famous book in 1969, Design with Nature . He had plastic overlay sheets that demonstrated how overlays could shed new light on environmental design Source: T. Turner, 2000.
ESRI’s Historical Role <ul><li>In the late 1960s, Environmental Systems Research Institute (ESRI) was formed as a company and headed since its founding by Jack Dangermond. </li></ul>Its mainframe product ArcInfo, based on Harvard algorithms, became the leading commercial GIS software package. Although ESRI’s early markets were predominantly in government, this also marked the beginning of GIS and spatial applications for businesses. Luckily, ESRI is headquartered in Redlands, California! Source: ESRI inc.
GIS moved into the mainstream of Big Business starting in the 1990s. Current Example: Map Routing and Scheduling of a Business Fleet - ArcLogistics Route Software Source: ESRI Inc., 2008
Target Site for Marco’s Pizza in Las Vegas (in center), showing other Marco’s and competitors’ locations and Buffer Rings, 2007 Source: Marco’s Pizza, 2007
Architectural Planning: 3-D GIS Visualization of a Park in London England Source: ESRI, 2006
Spatial Technologies: GIS and its family <ul><li>GIS . Systems and software that can map and spatially analyze data. </li></ul><ul><li>GPS (Global Positioning System). A technology that determines exact point location anywhere on earth by communicating signals with some of 24 GPS satellites circling the earth. </li></ul><ul><li>RFID (Radio Frequency Identification). Tags on portable products or containers carry data that can be accessed and updated remotely by RFID readers. Used in supply chains. </li></ul><ul><li>Sensors. Devices planted in buildings, vehicles, inventory, the landscape and even people to measure the environment, such as temperature, light, radiation, noise, heat. </li></ul><ul><li>Handheld devices . Mapping on cell phones, PDAs, handheld computers. Can communicate information by wireless. </li></ul><ul><li>LIDAR (Light Detection and Ranging). Bounces laser pulses off of surfaces or objects to estimate distances precisely. LIDAR devices put on aircraft and ground locations. Gives exact 3-D profile of physical and manmade landscapes. </li></ul>
The challenge of Spatial Ethics and Law <ul><li>Spatial technologies are brilliant in analyzing the earth and its human activity including in minute detail and meter accuracy. </li></ul><ul><li>Although we have seen these technologies helping business, government, and society, they can also be used for crime, terrorism, privacy invasion, and dishonest manipulation, or they can unintentionally cause harm, business mistakes, regulatory errors, and financial losses. </li></ul>
Ethical Issues: Geodemographics <ul><li>Geodemographics firms characterize neighborhoods and small areas, so everyone in a small area might be consolidated together to have one profile. </li></ul><ul><li>It has become a big business. A product example is Tapestry from ESRI, which characterizes the whole U.S. by census tract (population about 7,500) into 65 Categories. </li></ul><ul><li>Examples are Boomburgs, Wealthy Seaboard Suburbs, Urban Chic, Laptops and Lattes, Rustbelt Retirees, The Elders, Up and Coming Families, Main Street USA, Rural Resort Dwellers, and Rooted Rural. </li></ul><ul><li>Geodemographics becomes an ethical issue if the representation of the individual affects eligibility for economic and social benefits such as credit. </li></ul>
Spatial Analysis <ul><li>Spatial analysis techniques consist of methods that analyze and compare the spatial layers in a GIS. </li></ul><ul><li>Spatial analysis consists of analytical techniques that emphasize the map layers. </li></ul><ul><li>It relates and compares the features of the physical locations of objects in space. </li></ul><ul><ul><li>it is unfamiliar to most IS professionals </li></ul></ul><ul><li>Simple examples shown are overlays and buffering . </li></ul><ul><li>Modeling and statistical analysis methods can be modified to take into account spatial relationships. Specialized statistical methods that include space are referred to as geostatistics . Spatial regression is an example. </li></ul>(Source: Pick, 2008)
Movement of GIS towards Web and Mobile Platforms
GIS for Customers and Consumers <ul><li>Over the past 15 years, GIS has become increasingly customer-facing. </li></ul><ul><ul><li>It is no longer bottled up with small, highly technical, and highly trained users. </li></ul></ul><ul><ul><li>Its users have spread across company workforces </li></ul></ul><ul><ul><li>Especially since 2005, GIS users have become consumers. This was based on the remarkable advent within five months of Google Earth, Yahoo Maps, and Microsoft Virtual Earth. </li></ul></ul><ul><li>This means the everyday consumer is using GIS as part of everyday life, including for Nav systems for the car, maps to find retail outlets, cell phone displays of routes to meetings, media maps from newspapers on the web, community crime maps such as City of Sacramento, and maps of voting trends. </li></ul><ul><li>This trend also opens GIS up for small business . Our current study (U.S. Small Business Administration Grant SBAHQ-06-1-0046) is investigating these potential uses as well as barriers to use. </li></ul>
Consumer-Facing GIS <ul><li>Consumers today have growing dependency on web and mobile technologies </li></ul><ul><li>The advances in consumer facing GIS are happening quickly, so contemporary case studies are useful. </li></ul><ul><ul><li>Customer-facing studies are given of companies including Trulia.com for real estate on the web, DS Waters for bottled water delivery, and MotionBased Technologies for high performance runners, and MasterCard. </li></ul></ul><ul><ul><li>The pace is fast and many companies are forming and others being converted to spatial map services </li></ul></ul>
Pedestrian Navigation Systems <ul><li>Pedestrian navigation systems are informing city dwellers about locational information. </li></ul><ul><ul><li>This approach is based on a cell phone having GPS navigation, precise to thirty feet or less; an electronic compass that orients the pedestrian; and mapping web services. </li></ul></ul>Example. a pedestrian in Tokyo can select a type of destination, for instance banks, and point the phone in a direction. The list of banks located in that direction appear on the screen along with the distances and other information. Maps can be displayed to indicate routes to get there. Source: New York Times, 2007 A new area of research is ubiquitous location awareness .
Example of Mobile and Web-Based GIS: Seaspan’s Mobile Network
Seaspan Map Showing Ship Located in Vancouver Region and Assigned Tugs Source: Miller, 2005
Seaspan Dispatch Center (Source: nix-pix, 2007)
Issues in GIS and Enterprise System Integration <ul><li>Standard commercial ERP software such as SAP does not include GIS modules. There need to be workarounds, such as </li></ul><ul><ul><li>Third-party connectors . (example: iWay Control Builder from Information Builders. Expensive) </li></ul></ul><ul><ul><li>Passive middleware . This solution works as long as users stick to generic ERP and GIS. (ESRI, 2006). </li></ul></ul><ul><ul><li>Remote Function Calls (RFCs). The ERP software and GIS software invoke each other’s remotely callable functions. </li></ul></ul><ul><li>Oracle probably is the most successful integration of enterprise and GIS </li></ul><ul><ul><li>Oracle Spatial 11g combines the Oracle 11 database with moderate level built-in GIS functionality </li></ul></ul><ul><ul><li>Oracle Siebel CRM can be acquired with GIS capability </li></ul></ul>
Contributions of GIS to Supply Chain <ul><li>GIS contributes for: </li></ul><ul><ul><li>Spatial analysis of supply, manufacture, and delivery points. </li></ul></ul><ul><ul><li>Spatial distribution of customers in the supply chain. </li></ul></ul><ul><li>Problem: information overload. </li></ul><ul><li>Any item moving in the supply chain with recorded geographic coordinates can be more accurately tracked from a combination of GIS, RFID, and GPS. </li></ul>RFID Reader Source: www.capturetech.com.
Example: GIS at Global Integrated Oil (GIO) 1 <ul><li>GIO is one of the world’s largest oil firms, with over 150,000 employees. </li></ul><ul><li>It has a small but very highly skilled GIS department of about 40 employees. </li></ul><ul><li>It conducts GIS at all points in its value chain, from exploration of oil all the way to retail sales to customers. </li></ul><ul><li>GIO’s most sophisticated GIS is at the “upstream” parts of the value chain, nearest to the raw materials in the earth. </li></ul>1 Case is designated by a pseudonym because of request for anonymity
GIS for Large-Scale Business: Global Integrated Oil (GIO) 1
(On the right->) Example of GIS’s Geologic Model of Oil and Gas Deposits for the Earth in the Cretaceous Period (<- On the left) Example of “map overlay” i.e. juxtaposition of a GIO exploration field topography and the proposed locations of pipelines and well sites.
(On the right->) GIS Maps for GIO’s Market Planning in Africa (<- On the left) GIO’s Map of Supply Chain Routing of Containers from Plant to Customer in Europe, Africa, South Asia, and Australia
GIS at <ul><li>The giant retailer has extensive spatial technologies in six areas: </li></ul><ul><ul><li>routing and deploying service technicians, </li></ul></ul><ul><ul><li>delivery, </li></ul></ul><ul><ul><li>warehouse optimization, </li></ul></ul><ul><ul><li>marketing, </li></ul></ul><ul><ul><li>Sears Smart Toolbox automated vehicle navigation, and </li></ul></ul><ul><ul><li>capacity management of workforce in service territories. </li></ul></ul><ul><li>Significant gains in productivity of delivery and service maintenance have enhanced the company’s bottom line. </li></ul><ul><li>As the leading competitor in spatial technologies in its huge markets, there is strong competitive advantage. </li></ul><ul><li>Sear is estimated to save $100 milllion/year from GIS. </li></ul>
Sears Delivery Truck and Driver Source: ESRI Inc.
Sears Smart Toolbox for Routing Source: ESRI Inc.
GIS as a strategic force or competitive “weapon
Applying GIS as a Business Strategy Companies can let the strategy just happen, or can consciously plan out strategies. Our research on 20 business cases indicates that most companies do not plan strategically. Some exemplary companies such as Rand McNally plan their GIS carefully including a written GIS strategic plan. At Rand McNally GIS is regarded as highly strategic and competitive. In its core function of producing paper maps, automated tools allow selection from a medley of the best maps and data sources.’ Both the company and its GIS department have instituted strategic plans. The two plans are closely aligned. The firm is also on the cutting edge with its technology vendors, sometimes out in front of them. It focuses on improvements in the basics – high quality data from high quality data sources and delivered in traditional paper and the latest cell phone, handheld electronics, and web services.
Vision for Strategy <ul><li>Attaining industry leadership with spatial technologies also requires the vision to foresee years into the future to a spatially-enabled business with GIS and associated technologies providing sustained efficiency and productivity that add value. </li></ul><ul><li>This points to leaders in these firms who fostered or developed the vision, gained commitment of stakeholders, and led in making it happen through implementation of the strategies over many years. </li></ul><ul><li>The intangible leadership factors are also crucial. </li></ul>
Corporate Strategy and GIS Strategy need to be in Synchrony <ul><li>The corporate strategic plan includes the firm’s mission, guiding objectives, mid-term milestone to reach the objectives, sub-plan for development of employees, and section on how stakeholders have been involved in establishing the strategic plan (Tomlinson, 2003; Applegate et al., 2007). </li></ul><ul><li>The firm needs to have leaders in GIS who will take the initiative to formulate strategies and gather the support of company top leadership to include GIS in its business strategies. </li></ul><ul><li>The GIS plan needs to be in synchrony with the corporate strategic plan. It is a breakthrough point at which top leadership understands that GIS is strategic for the organization (Tomlinson, 2003). </li></ul>
Business-IT Strategic Alignment Model (Source: Papp, 2001)
IT Alignment Theory (cont.) <ul><li>The model postulates the closer the alignment that exists between the quadrants, the greater the synergy. In aligning business and IT capabilities, for example the business administrative structure and IT architecture need to be consistent (Papp, 2001). </li></ul><ul><li>Likewise the strategies and infrastructures need to be consistent, </li></ul><ul><ul><li>For instance IT strategy may call for a spatially-enabled supply chain but the IT infrastructure (people, expertise, networks, RFID equipment) may not be sufficient to support it. </li></ul></ul><ul><li>A firm’s strengths and weaknesses in the quadrants can help determine where investment needs to be prioritized and what results can be expected (Henderson and Venkatraman, 1992; Papp, 2001). </li></ul>
<ul><li>The IT alignment model can be extended to include GIS Strategy and GIS Infrastructure. </li></ul><ul><li>Now the alignment needs to exist between six cells, which requires more time and resources in planning, coordination, and communication. </li></ul><ul><li>If the IT and GIS functions and organizational units are combined together, then the functional integration becomes simpler, again with only four quadrants, and similar to the Bus.-IT Alignment Model. </li></ul><ul><li>However, based on the research cases in the book, the GIS and IT functions are more likely to be separate , with loose connections. </li></ul><ul><li>Regardless of the arrangement, this theory stresses that GIS strategy can succeed only if effort is made to align it with business and IT strategies, as well as have a fit between GIS strategy and infrastructure. </li></ul>Business-GIS-IT Strategic Alignment Model
Business-GIS-IT Strategic Alignment Model (Modified from Papp, 2001)
Practical Implications of Alignment of GIS and Corporate Strategy <ul><li>A practical implication of study of 20 cases for managers is that the alignment of GIS strategy with corporate strategy is recommended, but with a difference. GIS applications need to be aligned with corporate strategy and also with IT strategy. </li></ul><ul><li>For most firms, GIS and IT are separated, so coordination of their strategic planning might be problematic. Norwich best represents this problem. It has had limited coordination and communication between GIS and IT. On the other hand, for firms such as Sears and Rand McNally, GIS and IT work together well including in coordinating strategies. </li></ul>
Evolutionary Framework for GIS Strategy <ul><li>An evolutionary framework for GIS Strategy takes into account three key dimensions: </li></ul><ul><li>(1) extent that spatial applications are customer-facing, </li></ul><ul><li>(2) extent that geography is part of the industry or business, and </li></ul><ul><li>(3) extent that the industry or business utilizes a spatially-enabled enterprise-wide integration platform. </li></ul><ul><li>The 20 case study firms were classified in this framework </li></ul>
Evolutionary Framework for 20 Firms by 3 Spatial Dimensions, 2006
Case 1. Norwich Union <ul><li>Norwich Union has implemented major uses of GIS in flood insurance and innovated with distributions of pension risks, and real-time mapping of policy holders of automobile insurance who have GPS-enabled cars. </li></ul><ul><li>Hence it would be expected that the company and its top management would recognize GIS and position the firm strategically to take advantage of it to a greater extent. </li></ul><ul><li>The problem is in large part due to an organizational barrier between the GIS and IT departments. Norwich’s IT department’s narrow and legacy-based IT focus has lowered the IT department’s interest in GIS. </li></ul>
Norwich Union (cont.) <ul><li>The GIS department has its own strategic plan, but the obstacle is to obtain the requisite money and support. It depends on IT for storage of its data and maintenance of its GIS software. However, the problems in communications between IT and GIS have hobbled the GIS department with insufficient computer support and resources. It cannot plan big for the future. </li></ul><ul><li>Beyond IT, the upper-middle management at the company has not understood the GIS benefits. As one GIS employee stated, [Norwich’s upper middle managers] “don’t get it, they don’t understand, and they don’t have any vision. The are not educated about spatial.” Curiously, some of the company’s highest executives have visited the GIS department and are aware of its activities. </li></ul>
Case 2. MotionBased Technologies <ul><li>MotionBased (MB) Technologies in Sausalito, CA, is a small spatial firm that was purchased by Garmin, a medium sized international firm in Oct. of 2005 and became a Garmin division. </li></ul><ul><li>It provides spatial web services and analysis for endurance athletes, such as runners, climbers, and sailors worldwide. </li></ul><ul><ul><li>A typical user is an endurance athlete, who wears a Garmin or other GPS-enabled mobile device during training sessions. </li></ul></ul><ul><ul><li>Data are recorded 4 data points -- 3-D + time. Uploaded to MB’s web server. </li></ul></ul><ul><ul><li>Web server performs profile analysis of the individual athlete, as well as comparison with aggregate results from data-warehouse of the population of athletes. These analyses give tabular and map results to the desktop, but do not yet provide maps back to the mobile unit. </li></ul></ul>
MotionBased (cont.) <ul><li>MotionBased programmers wrote the web applications and configured the customer-facing web platform. Thus these spatial technologies constitute the company’s product and are inherently competitive and strategic. </li></ul><ul><li>Also, GIS, IS, and company strategies are inherently aligned. </li></ul><ul><li>MotionBased is high on all three dimensions of the Evolutionary model. </li></ul>
Drawing the Best GIS Strategies <ul><li>The implication from research on the 20 case studies is that a company should evaluate its industry to determine how suitable it is to spatial technologies, as well as to gauge how much competitive advantage these technologies offer a firm in the industry. </li></ul><ul><li>A firm should consider deploying spatial applications on web-services platforms , as long as it can rationalize the investment from a cost-benefit standpoint and support it technologically. </li></ul><ul><li>A manager should assess how naturally geographical its business is, to help in determining the strategic potential of GIS for his/her company. Once underway with GIS, corporate management should consider evolving the applications to an enterprise-wide web-based platform. </li></ul>
<ul><li>Major Costs </li></ul><ul><li>Hardware and software </li></ul><ul><li>Data </li></ul><ul><li>Specialized staffing </li></ul><ul><li>Web services </li></ul><ul><li>Maintenance (hardware, software, data) </li></ul><ul><li>Training </li></ul><ul><li>Consulting </li></ul><ul><li>Licensing </li></ul><ul><li>Security </li></ul><ul><li>Outsourcing </li></ul><ul><li>Internet, telecomm </li></ul><ul><li>Physical environment </li></ul><ul><li>What’s Different with GIS? </li></ul><ul><li>Coordination of spatial technologies </li></ul><ul><li>Visualization (multi-media design, 3-D) </li></ul><ul><li>Spatial, geographic training </li></ul><ul><li>Major Benefits </li></ul><ul><li>Workforce reduction </li></ul><ul><li>Better productivity </li></ul><ul><li>Better performance </li></ul><ul><li>Greater accuracy </li></ul><ul><li>Time saving versus manual maps </li></ul><ul><li>Revenue expansion </li></ul><ul><li>Better decision-making </li></ul><ul><li>What’s Different with GIS? </li></ul><ul><li>Visualizing complex geographic information </li></ul><ul><li>Improved spatial environmental scanning </li></ul><ul><li>Spatial analysis </li></ul><ul><li>Spatial business intelligence </li></ul>
Issues for CIOs and Executives <ul><li>In medium and large business, the organizational relationship of GIS and IT needs to be resolved. Together? Separate? Linked? </li></ul><ul><li>Access to GIS expertise. In-house? Consulting? Outsourcing? Vendor? Note : There is a shortage in skilled GIS workforce (Marble, 2006) </li></ul><ul><li>How to draw together the GIS initiatives in a larger organization and achieve synergies. CIO corporate-wide management? GIS task force? GIO? </li></ul><ul><li>Decision on architecture. Enterprise? Distributed web-based? Mobile? Combination? These are not as well worked out as core IT (accounting systems) </li></ul>
Issues for CIOs and Executives <ul><li>How can the CIO sell GIS and spatial technologies to top decision makers? How to judge projects being proposed to the CIO. </li></ul><ul><li>It might be helpful in justifying with ROI to disaggregate GIS into project or process categories. David Maguire et al. (2008) recommends dividing ROI by projects. The presentation to executives needs to show solid arguments of tangible payoff within several years. </li></ul><ul><li>How to prioritize what in GIS has the most mid to long-term benefit? </li></ul><ul><ul><li>GIS and spatial technologies are dramatic, visual, and appealing, even “entertaining” or diverting. But how can they be focused in development, building, and operations to the practical payoff. </li></ul></ul>
Conclusion <ul><li>GIS is expanding today in the business world </li></ul><ul><li>It has since 2005 spread rapidly into the consumer world and society in general. </li></ul><ul><li>There is a general trend towards web and mobile. </li></ul><ul><li>For enterprise systems, there are marginal advantages to integrating GIS, but commercially this is not yet a smooth process. </li></ul><ul><li>In some circumstances, GIS can and should be added as a competitive strategy and weapon. </li></ul><ul><li>For the CIO and other top executives, GIS needs to be weighed carefully and knowledgably, considering that it is “newer” and both similar and different from core IT. </li></ul>
GIS: It’s Time Has Come for Business Thank You CIO Discussion