Conference Review: ESRI GeoInfo Business Summit 2004

By Joe Francica

ESRI's first Business GeoInfo Summit in Chicago, convened on June 28th and 29th, accurately captured a "snapshot" the status of where business stands with respect to the adoption of spatial information in business: Good user stories, enthusiasm about further deployment, peering toward more enterprise system integration, but few CIOs actually showed up to hear the good news.I am at a loss for why this was the case and yet, I don't fault ESRI for their efforts.This is simply the situation that exists and yet it belies other well-documented evidence.

In his opening address, Jack Dangermond, president of ESRI, quoted CIO Magazine as saying that "70% of all CIOs have identified GIS as a strategic IT component." Compelling evidence of the bottom line benefits of GIS were presented by Steve Jones, National Routing Manager, for Sears' Product Repair Services who recognized a $33 Million annual savings for a system whose initial implementation was only $2 Million.Most CIOs would simply wish for such a return on most IT investments.

Whether by request or by simple recognition that you need to talk about it, nearly all presentations included a discussion of return on investment (ROI).Not all of them were able to document ROI, but it was nonetheless a focus of their statements.And it was quite clear, whether statistically documented or intuitively understood, spatial information applications needed to contribute to the business performance of the division it served.

One of the more compelling product features Mr.Dangermond presented was the application of ESRI's Business Analyst product with ModelBuilder, an extension available for ArcView as well.ModelBuilder is a graphical interface for building workflows from analytical components.For example, you can string together data and components that perform data input, geocoding, statistics, and other parameters to arrive at a spatially significant result. The advantage of using this extension is the ability to perform repetitive tasks in the same sequence to test and refine model development.Having a product feature available such as this allows the novice user to move more quickly into advanced applications thereby compressing the learning curve.

Keynote Addresses
Besides Mr.Jones, Dr.Susan Wachter, Professor of Real Estate at the Wharton School of the University of Pennsylvania, gave one of the other keynote presentations that helped to frame the discussion about spatial information applications.She identified three areas where location technology was helping to deliver value to businesses and where educating business professionals was key.

  1. Identification of new Business Opportunities
  2. "Geosynchronizing" the Supply Chain
  3. Risk, Place-based Asset Management
In order, each area represents a strategic, tactical, and actuarial practice for every corporation.Those taking advantage of each, will be rewarded with a competitive advantage.It was, however, her identification of the "Geosynchronization of the Supply Chain" that was most fascinating, because the ripple effects felt by various operational groups from spatial intelligence, in logistics and merchandizing for example, could have enormous ROI implications. Savings of mere pennies, as identified by Mr.Jones from each vehicle, add up quickly when thousands of assets are more efficiently utilized.

Putting an exclamation point on the focus on models and ROI, was a presentation by Dr.David Huff, Professor of Management at the University of Texas, Austin.

I'll digress for just a moment to mention that Dr.Huff has been one of the most influential educators of our times, and has perhaps has as much influence on the success of businesses, especially retail, than the television.For there have been few malls, convenience stores, strip shopping centers, or gas stations that have not been located without some consideration of the principals espoused by his theory of spatial interaction models. Banks, retailers, real estate managers, and economic developers employ the "Huff Model" for site selection strategies and have since he first published his work in 1960.

Dr.Huff stated, "The future lies in our ability to become more analytical." He went on to say that in the context of retailing, "you need a model that reflects the choice behavior." Referring to the propensity to shop in a specific store, he stated that there are many spatial and non-spatial parameters affecting choice and the both need to be considered in the selection of a specific site.

Business Intelligence
Michael Gonzales, principal of HandsOn-BI, gave perhaps the most stimulating presentation of the conference.In identifying the promise of Business Intelligence in the context of location technology, he said that it should deliver "actionable insight and knowledge through analytical applications." It would be hard to put these in other words; the meaning is clear.BI should assist the executive at every step in the decision process with immediate information about operations.Mr.Gonzales pointed to three components of a successful business intelligence deployment.

  1. Seamless integration with other enterprise systems
  2. Simplified data delivery
  3. Zero latency analytics - "getting the right information at the time you need it most."
Mr.Gonzales also stated "Pouring spatial data into the relational database is a huge boon to business intelligence." Referring to what Oracle has done, he said that Oracle has done it right and stands to benefit immensely because they are placing more and more tools into the database.For example, he mentioned that Oracle is eating into the extract, transform, and load (ETL) application software market."ETL is evaporating fast because it is going into the database," and "Oracle 9.2 is a very solid ETL." He mentioned the development work of Microsoft and IBM in the database market and indicated that, in conjunction with Oracle, will provide many of the tools now being offered by companies such as Hyperion, Microstrategy, and Cognos.

If you are interested in his other perspectives on GIS and BI, I recommend the following article:

The conference had the right focus on stressing applications, ROI, models, and business intelligence.I would have liked to see more presentations on projects that integrated BI with GIS, but perhaps that is indicative of the adoption phase in which we find ourselves currently.

Published Thursday, July 8th, 2004

Written by Joe Francica

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