Will your company fail without GIS?

June 24, 2015

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Large corporations have been using GIS software analysis for years now, and the impact is clear: the information they gain is helping save time, money and resources. The fast food giant Wendy’s, for example, has a team of analysts that scrutinize GIS collected data to determine what the annual profits of a new location are likely to be. Thanks to this GIS investment, company executives estimate that they’ve saved over $750,000 over the past two years on marketing research costs.

Now we’re seeing more focused uses of GIS software analysis that go beyond the traditional gathering and analyzing of consumer data. Corporations are increasingly using GIS software's analytic tools to predict and assess risk in the face of potential disaster. Doing so has given these organizations a competitive advantage, by enabling them to visualize risk factors and plan in advance.

This competitive advantage is profound enough to alter the risk management strategies of successful companies. For others, their lack of GIS implementation has left them at the back of the pack and struggling to remain relevant. The trend isn’t found in just one or two niche industries; it is happening across the board. So it begs the question: is your business using GIS to prepare for the future or is it falling behind?

Taking control of investment and safety

Certain transportation-based businesses fully understand the powerful implications of using GIS beyond traditional route mapping, to help them plan for their futures. Companies such as DHL Express have expanded their use of GIS to include predicting road conditions and the likelihood of dangers to drivers and their shipments. Using these advanced applications, company managers are able to determine the risk of sending out shipments during weather events, further estimate how much investment may be lost with a delayed arrival and plan alternatives ahead of time.

Data, processed and sequenced the night before, provides drivers with an efficient data set each morning, cutting the amount of time they must organize before getting on the road by 50 percent or 30 minutes per tour per day. This is a huge advantage to the business that has led to higher package turnover rates and better margins.

Optimizing to improve customer service

For many companies, predictive GIS hasn’t just increased their bottom line, it has improved their customer service and garnered additional positive reviews. Amica Mutual Insurance Company, for example, uses GIS technology to predict and prepare for heavy claim cycles by tracking extreme weather conditions and other disasters. When disasters strike, they can identify individual customers in the affected area and contact them proactively, providing a level of customer service that gives them an edge over competitors.

Bank of America has used GIS to stay up to date with customer activity, tracking every transaction by time, date, location and channel. With this information they have successfully acquired new locations, closed less productive ones and shifted the locations of ATMs to be more useful to customers, allowing them to save over $800 million, while retaining the majority of their customers at an increased level of customer satisfaction.

Answering the ‘what if’ questions

Increasing customer satisfaction just scratches the surface of the uses of GIS in banking; they’re also using the technology to assess the risk of loans and investments using predictive tools built into the software. They can answer questions such as ‘what is the likelihood of a loan in this community not defaulting?’ or ‘do investments in this location have the ability to become profitable?’ Providing reliable answers to these questions is key to lowering investment risks and improving a bank’s reputation as a successful and trustworthy lender.

Aside from banks, manufacturing companies can also use GIS to answer tough business questions. For example, companies with production links to the future market prices of crude oil can predict and plan for increases and decreases in those prices. In this case, predictive analysis tools are used to determine the likelihood of oil prices jumping if certain factors are met. The analysis conducted could answer ‘if’ questions related to the supply line: What will happen to my prices if war breaks out here? If a ship carrying oil sinks there?

Risk assessment companies, such as Willis, use the predictive tools offered by GIS to determine how high the dangers are for investments, stocks, buildings, machinery and supply chains in precarious situations. With the software, the company can easily, and visually, explain where both the strengths and weaknesses are for their clients, and what those client companies can do to manage their risks.

Saving government money

A variety of governmental bodies use GIS to plan for natural and environmental disasters, but lesser known uses of GIS are also helping to improve lives in other ways, and to save money that can then be applied to other programs.

The USDA has adopted GIS as a means to assess significant financial risks associated with droughts and fraud. The department has developed a GIS tool that allows them to set up crop insurance rates and more easily detect fraudulent claims associated with losses. Between 2001 and 2012 the USDA has saved over $975 million in unjustified claims and an estimated $2.5 billion in avoided costs.

Meanwhile, university research programs such as the University of Southern California’s Public Health Department also have been addressing financial risk through GIS tools. In this case, they are concerned with the economic impact of national and global health issues. Their research has linked the extensive use of pesticides in the Central Valley to heightened cancer incidences downwind. The impact of these risks is severe: not only are health-related expenses amplified, but a huge economic drain results from employees leaving the workforce with debilitating illnesses and drawing from governmental safety nets such as disability funds. Now, GIS is being used to search for alternatives to reduce these health and economic risks.

Small decisions, big impacts

Business success often hinges on small decisions and subsequent actions. These examples show that across every industry, implementing GIS into a business management strategy is a decision that saves time and money, and frequently improves health and safety. The development of more sophisticated predictive risk assessment technology is expected and is becoming accessible to companies of all levels. If your business has not begun using the software, it is time to start. It could be the difference between competing effectively and floundering. 


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