Leveraging location into Business Intelligence

Commentary--The value of location as a business measure is no secret.

Think retail. A store's location impacts sales performance more than any other factor. Great managers, great marketing programs and even great products—often none of these matter as much as a great location.

Think insurance. Insurance carriers that do not account for the location of their policies are blind when it comes to analyzing risk. In a business where one bad storm can wipe out an entire portfolio, smart carriers consider location and consider it often.

Think telecommunications. The location of a service provider’s network—fiber lines, cable and wireless towers—is the driving factor for a healthy business model. Providers that put the right services in the right place and effectively market those services are the ones that will not only survive the near future, but position themselves for maximum growth.

The point is that the value of location--which we will term "Location Intelligence"--is plain and clear. However, the ability to tap into location as a meaningful component of the Business Intelligence warehouse is a new concept altogether.

Unlocking location
By conservative estimate, 85 percent of all data used by businesses around the world contains a location component. In other words, somewhere the record holds information that can be tied to a geographic area.

Sometimes the location component is quite specific and spelled out. For example, an organization might store the latitude and longitude of its assets, customers and so forth in a database. Other times, the geographic factor may be an address that can be pinpointed on a map, either manually or through a process called geocoding to determine longitude and latitude.

Geographic indicators can also be less obvious. For example, a company can use the first six digits of a phone number—that is, the area code and the three-digit prefix—to tie a record to a place.

Historically, geospatial technologies that expose geographic data have been limited in broader enterprise adoption because they have been "siloed" in technical deployments outside standard business and IT systems. In the typical setup, the focus is on creating and managing maps, as opposed to transforming geographic information into a knowledge resource for distributed analysis. As a result, the power of location has largely remained locked away in small pockets of unilateral expertise within organizations.

Today, however, many Location-intelligent solutions are available to unlock the insight of location; its value has exited the silo and stands ready to be shared across the organization.

Business Intelligence: A natural fit for location
The benefits of Business Intelligence (BI) are well known. By de-centralizing analytics and distributing decision-making tools to a large number of users, organizations work to break the bottleneck between inspiration and insight. The aim is for business users in every strategic unit to access the data they need quickly, without having to be experts in table structures or SQL queries.

Location Intelligence goes one step farther and provides an easy way for users to quickly analyze and visualize critical spatial relationships among data that, unless the user is a GIS expert, would not be apparent.

In a hyper-competitive market where every investment must generate a return, smart organizations realize that location turns out a fast, high-benefit reward. Early adopters of BI software saw that, by publishing the data that defines their business across the organization, they could gain an advantage over the competition. Similarly, progressive users of BI technology realize that, by revealing location within their BI databases, they can positively alter the way they do business and never look back.

Using location within a BI solution
A new technology currently taking hold in retail and manufacturing supply chains stands out as a great example of Location Intelligence in action. Radio frequency identification (RFID) tags can solve critical problems related to supply chain management, store-level inventory, smart-shelving displays, homeland security and other important processes. While the issue carries some controversy relative to privacy, industry standards and other issues, RFID also has great potential. Organizations as diverse as the Department of Homeland Security and Wal-Mart have announced pilot programs or full-scale strategies to take advantage of RFID.

Accordingly, location is the driving component of RFID data. The technology produces radio signals to track objects or entities, and typically handheld devices receive the signals emitted by an RFID chip. The resultant data—including the location of the handheld and the chip—then travels to a central location for storage and analysis.

In other words, RFID creates vast amounts of location data. For those of us who manage large volumes of data, the advent of RFID technology means we must develop a whole new set of analyses. The process of creating data for tracking product shipments, inventory and even people begs for a powerful BI tool—powerful enough to allow analysts and operations managers to monitor and measure the status intuitively. Since every record in an RFID database also has a geographic component, the right BI solution for the job should incorporate Location Intelligence.

When one considers that many manufacturers and retailers desire to share data about inventory and supply, Location Intelligence gains even more importance. Using a location-enabled BI platform, retailers could allow suppliers to view and query reports describing the movement of product through warehouses and outlet centers. The supplier could, for example, view a map that breaks out the volume of shipments of a product by location. The map would show the location of warehouses and inventory in those warehouses, as well as outlets where shipments have already been delivered. It could even show the presence of pallets at indeterminate waypoints throughout the supply chain.

As a result, both the supplier and retailer would have near real-time access to supply and demand metrics related to specific products. With this data, the retailer could realistically develop a just-in-time ordering process and fine-tune it to the point of picking the precise warehouse, or even the exact truck that would best suit its needs. Considering the intense demand major manufacturers and retailers already place on the supply chain, this example is one whose time has come. It does, however, hinge upon the convergence of Location and Business Intelligence.

Location Intelligence stands as a beacon to unlock geographic understanding—to extract the value of place and integrate it with BI systems. Its singular goal is to give organizations greater return on their investment in Business Intelligence, and to provide users with a means to interact with data in a manner not previously available, or even much acknowledged.

When all is said and done, there are only a few fundamental ways to measure, understand and analyze information, and several tools already exist to maximize the level of understanding. However, these tools often ignore altogether the critical component of location, and organizations stand to gain great efficiencies by enabling it.

biography
Jon Winslow is director of strategic applications at MapInfo Corporation. MapInfo is bringing about the convergence of Location Intelligence and Business Intelligence through integrating location-based software, data and services. It currently provides Location Intelligence components for the Microstrategy and Business Objects platforms.