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Innovating with Location Intelligence

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Under extreme pressure to be more efficient and productive, companies must overcome business constraints that hamper their potential for success. These constraints include regulatory compliance, cost reduction, M&A restrictions, business process outsourcing or off-shoring and others that consume time and resources that otherwise could be directed toward performance improvement. This onslaught of new and ongoing initiatives puts pressure on your information systems as well. If these systems are just keeping pace, not adapting to meet your real needs for growth, why make new investments in them?

Too often, companies allocate more resources to retrofitting information systems designed in the 1990s. Conventional approaches to Business Intelligence systems provide an example of this. Most of these aging systems focus on basic access to and delivery of information - the original premise of BI laid out in the late 1980s. While standard BI has helped organizations meet the basic requirements of running the business, it has done little to help them innovate and gain business advantage through breakthrough performance.

Frankly, it is true that investments in BI and related technology are at all-time high levels, yet many businesses cannot point to tangible benefits from those expenditures. Most organizations simply settle for faster and cheaper access to and delivery of information. But mere efficiency improvements in BI do not address the real issue: how people apply information to improve their business processes and outcomes.

It is high time to seek new approaches that enable you to prioritize and focus resources in a timely manner and maximize the value of information. In particular, three aspects of Business Intelligence often are not effectively addressed from either business or technology perspectives. The first is the timeliness of the information, the second is the context of the information and the third is its usefulness for taking action.

Luckily there are ways to overcome these three shortfalls and drive innovation in BI. Historically, BI and decision support systems focus on utilizing information based on the intersection of time and something tangible such as products, customers, employees or stores. This approach provides only a single, limited view into the information. Now, the concept of Location Intelligence offers an opportunity to make BI timely, contextually meaningful and actionable.

The most critical dimension for information and BI is location, which is the foundation for context. Location is relevant to almost everything and helps prepare you to answer key business questions such as where we are selling products most effectively and where our customers, inventory and stores are located.

Providing the basic context of location is only the first step to understanding your business, competitors and markets. More critical is to understand how to use location-related information to take actions and decisions. For example, you could expand the question of where your retail stores are to compare them to your competitors' locations. Going deeper, you could assess locations of stores where you are losing market share and customers and those stores' demographics. All of this intelligence could be used to determine what new locations could generate new customers and revenue.

Unfortunately, many of these questions today are not easily answered. Organizations that try to answer them usually deploy teams of operations research and business analysts to collect and analyze the data and provide tabular reports or presentations. However, it would be more valuable to present the information a geographic or map-like format as is found on the Internet through Google or MapQuest. In short, the answers to these questions should be available on demand in forms appropriate to the needs of the business users.

This idea may seem obvious, but it is seldom implemented in actual business environments. Most IT investments, including BI and Geographical Information Systems (GIS), have not succeeded in yielding real-world decision support infrastructure. In reality, the information systems that we have adopted are either too simple, like reporting, or too complex, like statistical programming with SAS or complex GISs with ESRI.

Through applying the context of location to information, you can address where decisions that can be very beneficial to your company. To do this requires investment, but that investment could lead to true innovation and substantial performance improvements in your organization.

Consumer-centric information portals like Google, Microsoft's MSN and Yahoo are elevating the importance of location through their offer of a geographic presentation of information. But these approaches are not suited to real business uses such as showing you where to find new business potential. New solution providers including GeoVue, MapInfo and MetaCarta are developing platforms and applications to accommodate these needs. Unfortunately, most larger BI technology providers, such as Business Objects, Cognos and Hyperion, have been slow to address these needs in any significant fashion though they are starting to look for new technology partnerships. Rather than rely solely on mainstream BI providers, you will have to look for new ways to innovate in your business with IT.

You are not likely to find new methods to accelerate growth and compete better by buying the same technology as everyone else or just hiring more business analysts. Instead, new applications that can provide meaningful context through approaches like location will help you to capture and apply valuable information in a timely manner. The goal of helping your business managers to identify new opportunities to compete and win should guide the way you look at IT investments.

Continuing to follow the conventional wisdom of adopting information systems focused on providing the same information cheaper and faster will neither improve performance nor produce much Business Intelligence. Focusing on embedding location into BI will require you to reassess your existing business and IT strategy. By layering a new Location Intelligence blueprint on top of your existing BI investments, you might be able to innovate, meet your performance targets and beat your competition.

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