The term location intelligence is a growing part of today's business intelligence and analytics lexicon, but what kinds of BI applications does location technology make possible? Thanks to Google and other online information sources, nearly everyone is familiar with a multitude of consumer uses for location data -- for example, getting directions and finding restaurants, hotels, hospitals, government buildings and just about anything else you might need to find in a particular geographic area.
But can a business use location intelligence software to help increase sales or decrease costs, ultimately boosting its bottom line? Absolutely. There's a wide variety of location-based applications in play as part of BI and analytics programs in nearly every industry. Here is a sample of some of the most commonly found ones:
Customer analysis. Understanding the customer is critical for any organization, and location intelligence can play a big role by enriching customer data with demographic or lifestyle data based on where people live or by adding spatial data metrics -- drive times to stores, for example -- for use in sales forecasting models. Location data can also aid in customer profiling, segmentation and prospecting efforts, and in trade area and competitive analysis applications.
Retail site selection and expansion planning. Location intelligence tools can help retailers find the best location for a new store or suitable sites for an entire chain of stores. Potential store sites can be quickly evaluated and prioritized without the need for visits, based on local demographic and economic data and geographic factors such as transportation access, the location of competitors and site sustainability. Companies looking to add stores to fill geographic gaps can also use location analytics to measure the potential for "cannibalism" of customers who already shop at existing outlets.
Advertising and marketing promotions. Efforts to reach potential customers with targeted communications at the right place and time have long benefited from insight provided by location technology. And the possible uses are expanding in today's mobile-oriented world. Customers are no longer associated with only a mailing address or ZIP code and a home telephone number but also with their location-enabled smartphones and tablets. Effective marketing messages must be tailored based on where customers are at a particular time. Location intelligence applications can trigger ads and promotional offers based on proximity to a store or other spatial information.
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Sales territory design and optimization. Location-based intelligence can greatly improve sales force productivity by helping companies design balanced sales territories to optimize coverage and customer service levels. Data on customer density, travel times between different sites, the locations of customers with high buying potential and other factors can be brought together and analyzed to ensure that territories are set up to reach customers both effectively and efficiently.
Supply-chain management. In the global economy, far-flung suppliers could be at risk of events such as natural disasters, political upheavals and even terrorist attacks that might disrupt their production and deliveries. Companies dependent on those deliveries can use location intelligence systems to help design supply-chain networks and then to identify risks, develop mitigation plans and recover from disruptions when they do occur. Location-based applications can also help improve distribution planning and execution by supporting processes such as optimized multi-modal transportation routing and geofencing, which creates virtual boundaries and provides alerts when vehicles or goods cross them.
Field service planning and tracking. Large organizations such as utilities, telecom carriers and oil and gas companies have extensive holdings of physical assets and employ thousands of technicians to install and repair equipment in the field. Location intelligence tools have long provided the means to map assets and customer locations and help plan maintenance and service activities -- for example, through optimized vehicle routing. Now tablets and smartphones add the ability to track vehicles and workers in real time. The geofencing capabilities in location intelligence software deployed on mobile devices can alert dispatchers when technicians approach, arrive at or leave a work site; how long they stay there; and whether they deviate from a specified route. Done effectively, that can result in lower operating costs and increased customer satisfaction.
It's said that 80% of the data in an organization has a location component. And with more and more workers carrying location-aware mobile devices, the number and variety of location intelligence use cases is exploding. In addition, vendors of databases, business applications and BI tools have begun to build support for storing, analyzing and visualizing spatial data into their products. As business users become familiar with those capabilities, even more uses for location data surely will follow. If you aren't already, you should think about adding location technology to your BI and analytics landscape. Your competition likely is.
ABOUT THE AUTHOR
Steve Benner is founder of The Location Intelligence Institute, which provides information resources on the use of geospatial technology to improve business processes and decision making. Benner also manages business intelligence alliances at Esri, a vendor of geographic information system software. Email him at [email protected].
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