Defining Location Intelligence

Demand for Location Intelligence (LI) has grown rapidly throughout 2010 and this will continue in 2011. The ability to map, visualize and understand data form a geographical standpoint will become an increasingly important part of any Business Intelligence (BI) solution. Why? Because, according to IDC, more than 80 percent of the data collected by organizations has a spatial element and vendors are finally starting to offer integrated mapping with their BI platforms.

So what is Location Intelligence?

LI enables business analysts to apply geographic contexts to business data – LI combines location-based data with traditional metrics captured within a BI system. It helps answer a business problem by providing context to business data.

Take this scenario: Overall sales of ‘Brand X’ motor vehicles are down. There’s panic and pandemonium in the Some Car Company boardroom. Coffee is spilt, fists are clenched, and hasty proclamations are made. All the finger pointing, angst and premature job searching is too much to bear. Suddenly, Johnny Smith whips out his iPad 2. Using a cutting-edge BI product – let’s pick one at random, say, Yellowfin – Johnny is able to create a multilayered map, overlaying sales income by sales territory, and customer details by address. ‘A ha!’ The central northern region has no sales. Why?!

“Oh that’s right!” Exclaims Joe Blogs. “Under new legislation, only low emissions vehicles can be sold there now!”

A new marketing campaign targeting the central northern sales region with the new low emissions ‘Brand Z’ range of vehicles is launched. Johnny and Joe have saved the day. The sound of congratulatory backslapping echoes down the hallway.

The ability to overlay demographic or statistical data onto a map provides an additional level of analysis, both aiding, and adding to your interpretation of the data. By combining geographic data with traditional/standard business data, users are provided with the insights and context to make better decisions.

Location Intelligence: Gathering momentum since 2008

The prominence of LI has been mounting for a few years now. The emergence of this specific component of reporting and analytics was pinpointed by a Ventana Research report – Location Intelligence: Geographic Context Spurs Innovation – back in 2008.

When the report was released, Ventana stated that: “Location Intelligence will be one of the key technologies to enable business innovation and will be essential for achieving new levels of growth through improvement to business processes.”

Ventana Research’s CEO and Executive Vice President of Research, Mark Smith, noted that “The use of geography and location related information and technology is a contributor of business innovation and breakthrough performance.”

He stated that the research “found viral use of consumer mapping technology like Google in business but organizations are challenged in utilizing it to deal with the volumes and frequency of data that needs to be integrated.”

The report indicated that lack of awareness was the most substantial barrier to the adoption of LI in 36 percent of organizations. The potential market for this technology remains huge, with the report indicating that more than three-fourths (78%) of participants expressed willingness to utilize mapping viewers for business purposes. This was also coupled with the fact that less than one-third (31%) said they are confident or very confident that consumer mapping technology can satisfy business requirements.

What’s the difference between Location Intelligence and GIS?

Now, at this point, some of you might be wondering if LI is any different to Geographical Information Systems (GIS). Is LI just a fancy marketing term to re-guise an existing concept? The difference is this: GIS starts with geography. LI starts with a business query. Additionally, because GIS are purchased to address a geographic question, its usefulness is often siloed or departmentalized, unable to be used and applied to different business problems and metrics throughout an organization. LI can be.

Examples: Who can use Location Intelligence?

Ok great. LI has the ability to help solve a multiplicity of business dilemmas. So who else can use LI?

Well, as IDC flagged with their estimation that around 80 percent of organizational data has a location element, almost everyone can.

Some prominent examples include:

  • The mining industry: Being able to track, plot and understand the location of infrastructure and resources (or potential resources) is critical for corporations in the mining sector to properly assess the profitability of any given exploration or venture.
  • Insurance companies: Assessing risk enables insurance companies to structure a reliable, fair and profitable business model. Understanding the location of customers in relation to other location-based data, such as rates of car theft or frequency of severe weather systems by city, region or state, enables insurers to identify high or low risk cases and price them accordingly.
  • Airports and airlines: Mapping the location of aircraft is critical for obvious reasons. Further, combing the location of aircraft with other operational data can expose and answer critical questions. For example, what’s the maintenance record of the aircraft closest to a particular airport? Based on that record, is it reasonably safe to turn the aircraft around for back-to-back flights without a closer inspection and safety check?
  • Retail outlets: Tracking stock levels enable retail operators to coordinate warehouse deliveries to ensure individual shop fronts are always well stocked. Looking at sales of particular items by region or store also allows for more effective and efficient stock delivery. Additionally, new mobile applications, such as Foursquare, can actually detect when registered customers are near a store. Combing this data with customer transaction history, a text message can be sent to that customer when they are in the vicinity, alerting them to products and special offers that match their purchase history.
  • Transport and logistics companies: Monitoring the location of deliveries boosts the number of timely deliveries and allows for efficient dispatch and supply-chain management via accurate estimated time of arrival calculations.
  • Universities: Mapping a range of metrics helps universities offer better teaching and learning environments, facilities, and attract prospective students. Universities consume and produce a huge amount of data. Adding geographical components to student data can allow Higher Education institutions to develop more effective marketing campaigns by visualizing student intake by postal address; and more effective research grants can be made by assessing the number of incoming grants by geography. Additionally, facilities can be placed in the best positions on campus by tracking student traffic flow.

Despite the evidence and almost endless possibilities, many business leaders still seem unaware of the benefits of integrated mapping technologies. We aim to change that. Stay tuned for our next entry on LI, as we uncover some of its significant benefits.

Yellowfin: Making Location Intelligence easy.

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