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Location intelligence puts BI in its place

"Location intelligence" software users say that the new technology takes business intelligence up a notch by using location-specific data to provide new insights into business.

The best way to learn about a new place is to go there, but perhaps the second best way is location intelligence.

The tools and practices that make up location intelligence could be called the geographical version of business intelligence (BI). Location intelligence uses data about a location to help users make informed business decisions. Like BI, location intelligence software is designed to turn data into insight for a host of business purposes. These tools draw on a variety of data sources, such as geographic information systems (GIS), aerial maps, demographic information and, in some cases, an organization's own databases.

Location intelligence instantly brings together the kind of information that people used to have to collect and analyze by hand, according to retail veteran Anthony Padulo, senior vice president of franchise development for Papa Ginos Inc., a Dedham, Mass.-based chain of pizza and sandwich restaurants.

"We used to physically go out and do market analysis like this ourselves. I would drive the market, plot all of the direct and indirect competitors, and get census information," Padulo explained. Then he would compile all of that information and other relevant location data into a detailed market report. The entire process used to take two to six people a minimum of two weeks "on the ground" in each target area, he said.

Now, using location intelligence software from Woburn, Mass.-based GeoVue Inc., the same task takes one person about a day and a half to complete -- in the comfort of the corporate office, Padulo said. A company representative still visits each market, but the process is faster and more effective, he added.

The Papa Ginos pizza chain plans to double the number of its stores in the next five years, Padulo said, and the newly implemented software will make a big difference. Papa Ginos will use the GeoVue tool to assess the demographics of new markets and select new store locations. It's a highly sophisticated tool for a market that has been historically slow to adopt new technology, explained Jim Stone, founder of GeoVue. Stone spends a lot of time educating companies about how to use location intelligence to solve classic retail business problems.

"The simplest way to think of location intelligence is a combination of software, content and services," he said, adding that the software includes mapping, analysis and visualization technology, and the content could be data from many different sources.

BI platform vendors are also starting to offer location intelligence functions. BI vendor SAS, based in Cary, N.C., has partnered with Environmental Systems Research Institute Inc. (ESRI), a GIS and mapping software vendor based in Redlands, Calif.

BI platform integration will help location intelligence gain traction, according to Steve Trammell, corporate alliance representative for ESRI. The company has been providing services to government and environmental customers for more than 35 years, but the advent of BI has put the potential value of location intelligence into perspective for businesses.

"The difference between now and 15 years ago is that this kind of thing would have been done by an analyst working on a standalone system. Now, with BI, we can get more operational location information to more people faster, without disrupting the IT environment," Trammell explained.

Now, with a few mouse clicks in the SAS BI interface, users can put data on a map to gain new insight. For example, with the SAS and ESRI tool, a manager can instantly see sales data on a map, complete with color-coded icons to denote locations that are over or under target, Trammell explained.

Also driving the location intelligence market is the availability of more quality data sources than ever before and new databases of rich demographic information and other location-specific details, Trammell said. The rise of Web services is also a boon to location intelligence adoption, he said. Keeping source databases up to date used to be expensive and time consuming, but a company can now simply link its location intelligence tool to an online database and always have the latest information. The biggest challenge today, Trammell added, is education, not technology.

"One of the big hurdles is convincing the decision makers about the value of [location intelligence] technology. We start talking about maps and people start thinking of a static document," Trammell said. "We have to show them an interactive map -- a map you click on which brings up information like customer locations, sales volume, or even something as mundane as the weather."

Next Steps

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