Home Articles GIS cruises through business lanes

GIS cruises through business lanes

Bal Krishna and Pia

Use of information is the key to any organisation today. Significance of GIS in data management and decision making is enormous. This technology holds tremendous potential for improving productivity, credibility and profitability of any organisation. The horizontal spread of GIS includes such target marketing customer service, demand forecasting, property management/real estate market share analysis, merchandise planning, distribution logistics and many more areas. GIS can be customised to meet the use specific requirements..

Business GIS is a concept by which corporations begin to use spatial information to manage their business. Since 70-80% of any data has geographical location, it becomes important to use GIS for analysing them spatially. The corporate investment in spatial data would yield as efficient siting of new customer base, cutting the cost of finding new retail or distribution centres, realigning sales territories to utilise the sales force more efficiently, monitoring the profit and loss of each retail node, for example. The GIS ability to quickly interpret large quantities of data and visualising the proximity of spatial attributes to each other is being used for modeling future business trends.

To compete in the complex business environment, companies are reassessing their approach towards markets. This relatively new focus towards analysis at the local level implies a decentralised management empowered to act at a micro level. Firms are now relying on flexibility and adaptation to differentiated consumer demands.

A GIS makes use of geographic and attribute data by integrating the two in powerful manner. Attribute data are represented by populations, income levels, competition, sales, etc. while geographic data is represented as points, lines and polygons representing important places, roads and landuse respectively. GIS provides the ability to query this spatial data along with its non-spatial properties. For example, if one wants to know how many people are using washing machine in a city and that too represented in spatial manner and further classified into categories (depending upon distribution density), we have zones where the penetration is most or else where the potential for the white good is high .

Why GIS?

Usefulness of GIS in corporate sector can be achieved if this technology is integrated into the business planning process. This will not only contribute to the overall business but will also reflect on its mission as well as its profits.

The central concerns of corporate sector users of GIS are now beginning to turn towards the business needs of the organisations. The corporate data sets are now being seen as valuable resources for strategic planning. Bringing potentially large data sets into manageable contexts so that they provide value to an organisation is an important quality of GIS. GIS brings out the ever increasing complexities of information in an easy to analyse visual representation. The obvious goal of GIS is to improve profitability.

Strategic planning for private organisations requires information, since it is information that provides the context for management decision-making. Turning data into useful information is largely accomplished by adding meaning to this data, while meaning depends upon the context and decision for which the data is required. A GIS must help attributes, add meaning to data, and hence provide information for making a decision.

GIS differs from other information systems, as the underlying technology is based on geographic and cartographic principles, which if foreign to many end users. It is important to understand the processes involved in implementing the technology within the organisations, and the ways in which the output is being used for decision making.

As understanding needs to be developed of where GIS should be used and how it should be applied to solve business problems. GIS is likely to have a significant impact on the structure and operations of organisations implementing them.

GIS is a technology to interpret demographic trends, manage resources and model consumer’s trend. The business of mapping includes the map data, it’s property like demographic and other user specific data. It helps manage spatial data within a relational data base management system. It can support wide scale, multi-user-application, enables larger data sets, unifies business and spatial data and allows server-side processing. Information discovery is related to direct marketing, distribution logistics, merchandise planning and site selection. It can help competitive analysis that in turn will reduce the competitive threat and enable to understand the relationship between competition and their operations in the specific location. It can pin point the most profitable location. Trade Area Analysis can be done with the system to know from where the customers are coming. GIS use in Financial Services basically aims at property management, regulatory compliance, risk management, target marketing and branch location. The distribution Planning will get products from the warehouse to distributors. The analysis of Demography of any region will ensure that you are targeting the right customer base. It helps in network maintenance in insurance, municipal planning, disaster management, emergency services, public safety, census analysis, land use profile and environmental planning, etc. There are several benefits of mapping in business such as optimise customer acquisition through precision marketing programme, maximise customer relation, lower overhead costs, etc.

The involved in retailing must understand the nature and geographic distribution of customer base, thereby providing a fundamental basis for establishing demographic profiles, defining trade areas, predicting demands, developing marketing strategies, and evaluating market penetration and potential. Recently there has occurred a switch in focus to the marketing uses of GIS and their dissemination into more and more departments within the company’s organisational framework. Decision making has moved to a vertical as well as horizontal flow of information, where groups collaborate on planning issues and then transfer their ideas and inferences up a corporate ladder to the company’s final decision makers. GIS as a spatial tool of analysis facilitates the planning processes and ultimately the decision making at the highest corporate levels. GIS is now being used as a strategic resource which can have an impact throughout a given organisation.

GIS can be a tool for strategic planning in marketing organisations. A GIS database query allows a business planner to identify and locate residences with incomes greater than a defined floor, within a specific age range, and distributed around a retail outlet within a given driven time threshold. The locations of these potential customers are then used for direct micro-marketing campaigns which are utilised by mailing materials to those residences which exhibit aggregate characteristics as defined prior to query for those potential consumers. GIS also empowers a planner to better understand the spatial distribution of a given market by locating existing customers’ residences for a given facility. This process can be carried out for a series of outlets after which the relative strength of customer clusters with in each district, a trade area is defined by purchasing behaviours and the series of customers’ residential locations.

Data availability is a major hurdle in India. Even if data is available, it is not GIS friendly format. Maps availability, border restriction and their copyright are some of the hurdles faced by the GIS industry. Market research companies do not use maps. In India only a few companies have opted for GIS. This is partly because the software packages are still relatively undeveloped in India. Apart from this, integration of data with existing systems, cost of data maintenance, difficulties in quantifying payback period of business geographics, etc. are other problems.

Another problem is the lack of awareness in academic institutions about the potential use of GIS on business applications. Presently, there is not much integration between and GIS is academic institutions. The Information Technology Departments of these institutes should integrate GIS in their curriculum.

In Australia, according to a research conducted by a consultancy group, less than 1% of Australia’s corporate sector is currently using the GIS technology basically due to high cost of GIS technology. Moreover, the people with right kind of skills is also very costly. Another reason for failure is of GIS in Australia is that it is not being taught as part of any university business course in Australia.

The Business Schools
It is not surprising that top business schools such as Wharton, Havard and Clemson are using business geographics in classrooms, computer labs and research centres. But even though business geographics – the fastest growing applications of GIS technology is taught in some programmes, its overall penetrations into business schools is low, even in ore developed countries of the west.

In congruence with the trends worldwide, the GIS has still to make its pressure felt in Indian business schools. Some initiatives have been taken at the economics, business management institutions such as Indira Gandhi Institute of Development Research (IGIDR), Mumbai, Indian Institute of Economic Growth, Delhi, IIM Ahmedabad and Bangalore and Indian Institute of Rural Management (IIRM), an and for using this technology. However, these initiatives have largely remained confined to using GIS for formulating macro economic policies for sustainable development of a region. These initiatives have not yet transformed themselves in developing GIS based micro-level plans. Some schools such an Amity Business School. Noida, Department of Business Economics, University of Delhi South Campus, New Delhi and Faculty of management Studies have tried to expose the students to this new exciting technology through invited lectures from the industry, project work, etc.

The Probable Scenario
As GIS becomes established in a variety of marketing contexts, the pace of development is largely determined by three considerations

  • Ability to structure and manipulate multiplying sources into useful information.
  • Development of computer software to handle different classes of geographic problems.
  • Prospects for disseminating developments in spatial data handling

Pretty maps may not be the answer to everyone’s nightmare, but it is GIS that consolidates the facts into a more interpretable form. The user has the option of looking at reams of paper output or perhaps, just one map.