Data collected for this study comes from a survey Ventana Research conducted
over the Web during September and October 2007. We solicited survey
participation via e-mail blasts and Web site invitations. Both Ventana
Research and the program's media sponsors (Directions Magazine, GPS
World and Intelligent Enterprise) originated the e-mail
blasts. We designed the survey used for this research to be answered by
executives and managers with a broad range of roles and titles. While
we did not prevent anyone from taking the survey, the findings detailed
below are based only on responses from the targeted organizations as
determined in our qualification process.
Of 1,255 participants who clicked through to the study, Ventana Research deemed 332 to be qualified to have their answers counted in this research. In this report, the term "participants" refers to this qualified group, and the charts in this section characterize various aspects of their demographics and qualifications. (Qualification entailed screening out responses from questionnaires that were not materially complete, that were submitted by inappropriate respondents, or where we suspected the submission was bogus.)
The participants represented a broad range of industries, which we have summarized into four general categories. Companies that provide services (40%) accounted for the largest share of participants, followed by government, education and nonprofits (27%), manufacturing (14%), and finance, insurance and real estate (9%). An additional 9% of participants specified an undefined "other."
Location intelligence (LI) will be one of the key enabling technologies for business innovation in the coming years. LI applies information about location or geography to inform actions or responses to opportunities. By combining geographic and location-related data with other critical business data, it can help companies gain critical insights, make better decisions and optimize important processes and applications. LI has broader, more strategic applicability than its predecessor, the geographic information system (GIS), which is software that enables business analysts to apply geographic contexts to business data.
Location intelligence offers organizations opportunities to streamline their business processes and customer relationships to improve business performance and ultimately their results. A significant number of organizations are already doing this; we found 28% of organizations participating in our benchmark research to be operating at the highest (Innovative) of our four levels of maturity in using location intelligence. However, we found that an equal number are at the lowest (Tactical) level of maturity and have yet to realize the value of applying LI technology to their processes.
This research found strong interest in LI; more than three-fifths (61%) of participants said LI is very important in helping to improve business processes and performance, and even more (65%) said it is very important for improving interactions with their customers and suppliers.
The recent advent of consumer map viewers from Google, Microsoft and others has raised awareness of LI. More than half (57%) of research participants are using Google, which is a higher percentage than use long-time GIS provider ESRI (47%) or its peers. However, while these simple, free technologies can provide the basic functions of LI, they are not ready to integrate into the enterprise for full business use. The research illuminated many aspects of functionality, accessibility, integration and deployment approaches that adopters must address to realize a full range of business benefits from LI. And there is room for providers to establish influence; the research participants named no single vendor as the primary thought leader in the market.
The basic capability of LI - mapping and identifying locations and sites - is undeniably useful and certain to continue spreading; only about 40% of organizations use it today. Beyond that, the integration of location into business applications will enable many organizations to use LI to innovate. Our research analysis forecasts that LI in applications will proliferate in call centers, e-commerce activities, field service and sales organizations and will be used for a variety of functions. Applying LI to refine demographic and market analysis, to understand the distribution and use of assets, and to support mobile professionals top the list, our research finds.
Adding a location component is simple in concept, but for it to meet business needs requires resources and technology. Integration of data, for instance, is a demanding task: 61% of organizations need to bring together data from at least five sources, and nearly one-fifth (19%) need to combine data from 20 sources or more. Furthermore, these data sources are not only the conventional ones of enterprise resource planning (ERP), customer relationship management (CRM) and data warehousing. Participants told us that more individual sources are the most important; spreadsheets (50%), flat files (37%) and reports (35%) all were cited more often than the traditional sources. This reflects the reality of business today that much key business data is stored outside of such enterprise sources.
The variety of data sources will require providers and users to accommodate interfaces to various technologies. These will include not just LI software vendors such as ESRI and Pitney Bowes MapInfo but business intelligence (BI) and relational databases and new applications such as Google's Keyhole Markup Language (KML). Participants also articulated a need to support mobile devices and e-mail applications. These integration challenges may lead enterprises to turn to newer technologies including location-based services (LBSs), Web services and service-oriented architecture (SOA).
A related technological challenge will be to update this array of information frequently; nearly one-third (29%) of organizations need updates more often than once an hour.
Participants' repeated emphasis on the customer provides evidence that organizations see location intelligence as an important business tool. More than one-third (36%) said that customer information is their most important focus for their organization, and after general location-related data, they cited customer data as the most important category of data. A majority (61%) said increasing customer service is very important, and nearly half (49%) said the same about responding to customer requests faster; these were the most and third-most important benefits of LI. Similarly, increasing the speed of response to customers (24%) was most often the first choice when participants were asked about drivers of the business case for LI.
Despite strong evidence that many business people understand the value of location intelligence, our participants also indicated that not everyone in their organization shares this understanding. Establishing an effective business case for adopting LI is likely to require educational efforts and compelling benefits directly related to the business. Lack of awareness about LI is the most substantial barrier to adoption in 36% of organizations, followed by lack of resources (16%) and no budget (15%). Articulating benefits such as responding faster to customers (noted above) and improving the accuracy of information and the quality of business analysis - cited as the most important factors in the business case - can be persuasive. As for finding information about LI, participants most often get it through word of mouth and secondly from trade shows and the Web sites of trade publications; personal comments and referrals to these and other sources can do some of the work of education.
These barriers are related to simple ignorance, not negative perceptions. Once the information gap is filled, the reception may be smoother. More than three-fourths (78%) of participants expressed willingness to utilize mapping viewers for business purposes, and nearly as many (73%) said they would consider open source LI as a technology option. Here again, suiting the technologies for business purposes is a concern. Less than one-third (31%) said they are confident or very confident that consumer mapping technology can satisfy business requirements.
Location intelligence is poised to become a powerful component of the information on which corporations base decisions. Applied wisely, it even can provide a competitive advantage. Ventana Research believes that those looking to innovate will want to add LI to their information technology assets.
What To Do Next
Using location intelligence technology to provide capabilities to management and to operational decision makers can help organizations improve their performance. We address the following recommendations to business and IT executives, managers and users engaged in evaluating or implementing location intelligence software. They are derived from the results of this research and from our knowledge of the location intelligence software market.
Assess your maturity and identify ways to improve
We found a fairly even distribution of location intelligence maturity levels among the companies in our research sample. Maturity ranges from organizations that have done sophisticated deployments and are at the Innovative (highest) level (28%) to those that have been relying on consumer LI technologies such as Google, do not recognize the importance of integrating LI with processes and so are at the Tactical (lowest) level (28%). Those at the intermediate levels, Advanced (20%) and Strategic (24%), are looking to apply more sophisticated software and capabilities across the organization. Determine where you can apply improvements in terms of your people, processes, information and technology to gain benefits from location intelligence software.
Focus on benefits to make the business case
Before an organization can realize the benefits of a location intelligence software investment, proponents must make a compelling business case for adoption. While our research shows general familiarity with LI, it also reveals areas where the need and benefits are not well understood. The most often cited barrier to establishing a business case for LI was lack of awareness (36%), followed by two other barriers that may result from it: lack of resources (16%) and no budget (15%). To correct this, proponents of adoption should educate others by emphasizing drivers for the business case, particularly increasing the speed of response to customers and increasing the accuracy of information.
Make customers' experience and satisfaction a focus for LI
Research participants' emphasis on the customer was evident. For example, when asked to prioritize areas in which to apply LI, they most often named customer-related measures as very important. Asked about the most important benefits of LI, a majority (61%) said improving customer service is very important; responding to customer requests faster (49%) was third-most important. We believe this emphasis is shared by many other organizations. To prepare for location intelligence to help you in addressing customers' needs, you should examine the many ways in which your organization encounters customers. Marketing, field service, sales and contact centers all will find location useful to their missions.
Support access to appropriate data sources
To gain full value from location intelligence software, it must be integrated it with a variety of data sources. Software implementation projects typically require data from enterprise applications, data warehouses and other major systems. The sources of location intelligence, however, extend beyond enterprise software to information that individual business users develop or acquire. Half of participants said that the most important information source is spreadsheets, followed by similar local repositories: flat files (37%) and data stored in reports (35%). And there are likely to be many of them: 61% of participating organizations have more than five sources for data, and 19% have more than 20 sources. Your organizations should explore ways to streamline the use of local business data and integrate LI with it smoothly.
Understand what your business users really need
The research found that organizations use various types of location intelligence technology, from simple map viewers on the Internet to sophisticated tools such as those from ESRI and MapInfo. Organizations should determine early the purposes for which their users need LI. Most needs go beyond basic mapping; a number of items, among them demographic and market analysis (13%), asset management (12%) and consumer device enablement (12%), particularly of mobile systems, all received more votes as the top priority than did mapping. When it came to specific business undertakings, five each were deemed very important by more than 40% of the research participants; four of them - analyzing customer and demographic information, analyzing location patterns, understanding location-related patterns in operational data and identifying location relationships - can be used by anyone in the organization, from management to front-line operational workers, to interpret and evaluate business performance.
Make sure you fully understand what your users need from LI so you can determine what type of application and sources of data are required. Do not assume that one dedicated application will meet all needs; perhaps several simple capabilities integrated with current or new applications may serve better.
Support deployments where they make sense
How you approach the deployment of location intelligence will vary based on the details of your organization and its level of maturity. Our research found that nearly half (48%) of organizations that have not yet deployed LI plan to do so in the next year, in one of three ways: centrally or enterprise-wide (38%), to specific lines of business (33%) or departmentally (17%). The one you choose will depend on who your users are and how many there are. By group, participants said that marketing, sales and field service will account for 45% of planned growth. For the roles of users, topping the list were business analysts (20%), front-line workers (19%) and mobile workers (17%). That distribution is likely to change, though; our analysis indicates that mobile workers (23%), line-of-business owners (21%) and executives (20%) will lead the growth in deployments in 2008. We recommend that organizations fully analyze the users' roles and requirements to determine the right type of deployment.
Realize that consumer map viewers are not sufficient for business use
The research found common use in business of consumer map viewers that are freely available on the Internet and have already brought location mapping to millions of households. Participants named Google as the most often used location intelligence software, so it is no surprise that 78% would consider using it for business purposes. Yet many showed caution about its applicability for business. Just providing a view of a map and displaying information are only the start of what location intelligence can offer to business. To help your organization improve processes and performance, look into technologies that meet specific needs.
Plan to support growing demand for location intelligence
In our research, 61% of participants said LI is very important in helping improve business processes and performance, and 65% called it very important for improving interactions with their customers and suppliers. LI was represented in eight other types of applications, including call center systems and e-commerce, in at least 18% of organizations. And in every category of enterprise application we asked about, participants told us their use would almost double. Business intelligence, currently the application third-most widely integrated with LI, will have the highest growth percentage in 2008 (27%); at that point it will be deployed in three-fifths of organizations. Organizations will need to prioritize where to provide location intelligence in key business activities and processes and in many cases which new technologies to integrate.
Of 1,255 participants who clicked through to the study, Ventana Research deemed 332 to be qualified to have their answers counted in this research. In this report, the term "participants" refers to this qualified group, and the charts in this section characterize various aspects of their demographics and qualifications. (Qualification entailed screening out responses from questionnaires that were not materially complete, that were submitted by inappropriate respondents, or where we suspected the submission was bogus.)
The participants represented a broad range of industries, which we have summarized into four general categories. Companies that provide services (40%) accounted for the largest share of participants, followed by government, education and nonprofits (27%), manufacturing (14%), and finance, insurance and real estate (9%). An additional 9% of participants specified an undefined "other."
Location intelligence (LI) will be one of the key enabling technologies for business innovation in the coming years. LI applies information about location or geography to inform actions or responses to opportunities. By combining geographic and location-related data with other critical business data, it can help companies gain critical insights, make better decisions and optimize important processes and applications. LI has broader, more strategic applicability than its predecessor, the geographic information system (GIS), which is software that enables business analysts to apply geographic contexts to business data.
Location intelligence offers organizations opportunities to streamline their business processes and customer relationships to improve business performance and ultimately their results. A significant number of organizations are already doing this; we found 28% of organizations participating in our benchmark research to be operating at the highest (Innovative) of our four levels of maturity in using location intelligence. However, we found that an equal number are at the lowest (Tactical) level of maturity and have yet to realize the value of applying LI technology to their processes.
This research found strong interest in LI; more than three-fifths (61%) of participants said LI is very important in helping to improve business processes and performance, and even more (65%) said it is very important for improving interactions with their customers and suppliers.
The recent advent of consumer map viewers from Google, Microsoft and others has raised awareness of LI. More than half (57%) of research participants are using Google, which is a higher percentage than use long-time GIS provider ESRI (47%) or its peers. However, while these simple, free technologies can provide the basic functions of LI, they are not ready to integrate into the enterprise for full business use. The research illuminated many aspects of functionality, accessibility, integration and deployment approaches that adopters must address to realize a full range of business benefits from LI. And there is room for providers to establish influence; the research participants named no single vendor as the primary thought leader in the market.
The basic capability of LI - mapping and identifying locations and sites - is undeniably useful and certain to continue spreading; only about 40% of organizations use it today. Beyond that, the integration of location into business applications will enable many organizations to use LI to innovate. Our research analysis forecasts that LI in applications will proliferate in call centers, e-commerce activities, field service and sales organizations and will be used for a variety of functions. Applying LI to refine demographic and market analysis, to understand the distribution and use of assets, and to support mobile professionals top the list, our research finds.
Adding a location component is simple in concept, but for it to meet business needs requires resources and technology. Integration of data, for instance, is a demanding task: 61% of organizations need to bring together data from at least five sources, and nearly one-fifth (19%) need to combine data from 20 sources or more. Furthermore, these data sources are not only the conventional ones of enterprise resource planning (ERP), customer relationship management (CRM) and data warehousing. Participants told us that more individual sources are the most important; spreadsheets (50%), flat files (37%) and reports (35%) all were cited more often than the traditional sources. This reflects the reality of business today that much key business data is stored outside of such enterprise sources.
The variety of data sources will require providers and users to accommodate interfaces to various technologies. These will include not just LI software vendors such as ESRI and Pitney Bowes MapInfo but business intelligence (BI) and relational databases and new applications such as Google's Keyhole Markup Language (KML). Participants also articulated a need to support mobile devices and e-mail applications. These integration challenges may lead enterprises to turn to newer technologies including location-based services (LBSs), Web services and service-oriented architecture (SOA).
A related technological challenge will be to update this array of information frequently; nearly one-third (29%) of organizations need updates more often than once an hour.
Participants' repeated emphasis on the customer provides evidence that organizations see location intelligence as an important business tool. More than one-third (36%) said that customer information is their most important focus for their organization, and after general location-related data, they cited customer data as the most important category of data. A majority (61%) said increasing customer service is very important, and nearly half (49%) said the same about responding to customer requests faster; these were the most and third-most important benefits of LI. Similarly, increasing the speed of response to customers (24%) was most often the first choice when participants were asked about drivers of the business case for LI.
Despite strong evidence that many business people understand the value of location intelligence, our participants also indicated that not everyone in their organization shares this understanding. Establishing an effective business case for adopting LI is likely to require educational efforts and compelling benefits directly related to the business. Lack of awareness about LI is the most substantial barrier to adoption in 36% of organizations, followed by lack of resources (16%) and no budget (15%). Articulating benefits such as responding faster to customers (noted above) and improving the accuracy of information and the quality of business analysis - cited as the most important factors in the business case - can be persuasive. As for finding information about LI, participants most often get it through word of mouth and secondly from trade shows and the Web sites of trade publications; personal comments and referrals to these and other sources can do some of the work of education.
These barriers are related to simple ignorance, not negative perceptions. Once the information gap is filled, the reception may be smoother. More than three-fourths (78%) of participants expressed willingness to utilize mapping viewers for business purposes, and nearly as many (73%) said they would consider open source LI as a technology option. Here again, suiting the technologies for business purposes is a concern. Less than one-third (31%) said they are confident or very confident that consumer mapping technology can satisfy business requirements.
Location intelligence is poised to become a powerful component of the information on which corporations base decisions. Applied wisely, it even can provide a competitive advantage. Ventana Research believes that those looking to innovate will want to add LI to their information technology assets.
What To Do Next
Using location intelligence technology to provide capabilities to management and to operational decision makers can help organizations improve their performance. We address the following recommendations to business and IT executives, managers and users engaged in evaluating or implementing location intelligence software. They are derived from the results of this research and from our knowledge of the location intelligence software market.
Assess your maturity and identify ways to improve
We found a fairly even distribution of location intelligence maturity levels among the companies in our research sample. Maturity ranges from organizations that have done sophisticated deployments and are at the Innovative (highest) level (28%) to those that have been relying on consumer LI technologies such as Google, do not recognize the importance of integrating LI with processes and so are at the Tactical (lowest) level (28%). Those at the intermediate levels, Advanced (20%) and Strategic (24%), are looking to apply more sophisticated software and capabilities across the organization. Determine where you can apply improvements in terms of your people, processes, information and technology to gain benefits from location intelligence software.
Focus on benefits to make the business case
Before an organization can realize the benefits of a location intelligence software investment, proponents must make a compelling business case for adoption. While our research shows general familiarity with LI, it also reveals areas where the need and benefits are not well understood. The most often cited barrier to establishing a business case for LI was lack of awareness (36%), followed by two other barriers that may result from it: lack of resources (16%) and no budget (15%). To correct this, proponents of adoption should educate others by emphasizing drivers for the business case, particularly increasing the speed of response to customers and increasing the accuracy of information.
Make customers' experience and satisfaction a focus for LI
Research participants' emphasis on the customer was evident. For example, when asked to prioritize areas in which to apply LI, they most often named customer-related measures as very important. Asked about the most important benefits of LI, a majority (61%) said improving customer service is very important; responding to customer requests faster (49%) was third-most important. We believe this emphasis is shared by many other organizations. To prepare for location intelligence to help you in addressing customers' needs, you should examine the many ways in which your organization encounters customers. Marketing, field service, sales and contact centers all will find location useful to their missions.
Support access to appropriate data sources
To gain full value from location intelligence software, it must be integrated it with a variety of data sources. Software implementation projects typically require data from enterprise applications, data warehouses and other major systems. The sources of location intelligence, however, extend beyond enterprise software to information that individual business users develop or acquire. Half of participants said that the most important information source is spreadsheets, followed by similar local repositories: flat files (37%) and data stored in reports (35%). And there are likely to be many of them: 61% of participating organizations have more than five sources for data, and 19% have more than 20 sources. Your organizations should explore ways to streamline the use of local business data and integrate LI with it smoothly.
Understand what your business users really need
The research found that organizations use various types of location intelligence technology, from simple map viewers on the Internet to sophisticated tools such as those from ESRI and MapInfo. Organizations should determine early the purposes for which their users need LI. Most needs go beyond basic mapping; a number of items, among them demographic and market analysis (13%), asset management (12%) and consumer device enablement (12%), particularly of mobile systems, all received more votes as the top priority than did mapping. When it came to specific business undertakings, five each were deemed very important by more than 40% of the research participants; four of them - analyzing customer and demographic information, analyzing location patterns, understanding location-related patterns in operational data and identifying location relationships - can be used by anyone in the organization, from management to front-line operational workers, to interpret and evaluate business performance.
Make sure you fully understand what your users need from LI so you can determine what type of application and sources of data are required. Do not assume that one dedicated application will meet all needs; perhaps several simple capabilities integrated with current or new applications may serve better.
Support deployments where they make sense
How you approach the deployment of location intelligence will vary based on the details of your organization and its level of maturity. Our research found that nearly half (48%) of organizations that have not yet deployed LI plan to do so in the next year, in one of three ways: centrally or enterprise-wide (38%), to specific lines of business (33%) or departmentally (17%). The one you choose will depend on who your users are and how many there are. By group, participants said that marketing, sales and field service will account for 45% of planned growth. For the roles of users, topping the list were business analysts (20%), front-line workers (19%) and mobile workers (17%). That distribution is likely to change, though; our analysis indicates that mobile workers (23%), line-of-business owners (21%) and executives (20%) will lead the growth in deployments in 2008. We recommend that organizations fully analyze the users' roles and requirements to determine the right type of deployment.
Realize that consumer map viewers are not sufficient for business use
The research found common use in business of consumer map viewers that are freely available on the Internet and have already brought location mapping to millions of households. Participants named Google as the most often used location intelligence software, so it is no surprise that 78% would consider using it for business purposes. Yet many showed caution about its applicability for business. Just providing a view of a map and displaying information are only the start of what location intelligence can offer to business. To help your organization improve processes and performance, look into technologies that meet specific needs.
Plan to support growing demand for location intelligence
In our research, 61% of participants said LI is very important in helping improve business processes and performance, and 65% called it very important for improving interactions with their customers and suppliers. LI was represented in eight other types of applications, including call center systems and e-commerce, in at least 18% of organizations. And in every category of enterprise application we asked about, participants told us their use would almost double. Business intelligence, currently the application third-most widely integrated with LI, will have the highest growth percentage in 2008 (27%); at that point it will be deployed in three-fifths of organizations. Organizations will need to prioritize where to provide location intelligence in key business activities and processes and in many cases which new technologies to integrate.
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