Über die Autorin bzw. den Autor

James B. Pick is Professor of Business at the University of Redlands, California, where he served as Chair of the Department of Management and Business and the School of Business School Faculty Assembly. He holds a BA from Northwestern University and PhD from University of California, Irvine. He has published?ten books, including Mexico Megacity, Exploring the Urban Community: A GIS Approach, and Geographic Information Systems in Business, and over 100 peer-reviewed journal articles, book chapters, and papers. He has received numerous grants and awards, including a Fulbright Senior Scholar Award for Mexico, and faculty awards for outstanding research and teaching.

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Exploit the advantages of Geographic Information Systems in your business

Once the domain of cartographers and other specialists, Geographic Information Systems (GIS) are increasingly being employed by the business community. Location-based services, supply chain management, management of field-distributed equipment, geographical marketing and promotion, and the spatial web are some of the current business applications that make use of GIS principles.

Written specifically for the businessperson, Geo-Business: GIS in the Digital Organization is the first book to provide comprehensive coverage of GIS applications in the business and organizational environment. Going beyond a strictly geographical focus, this book sets GIS in the context of business information systems and other business sub-disciplines such as logistics, marketing, finance, and strategic management. It presents from an organizational?perspective the advantages of spatially enabling existing enterprise systems and illustrates how GIS is applied in the real world through rigorous case study analyses of twenty companies, including Baystate Health, Chico's, Kaiser Permanente, Lamar Advertising Company, Rand McNally, Southern Company, Sears Roebuck, and Sperry Van Ness.

In this book, you'll find out:

• What GIS is and how it can be integrated into your organization's existing information infrastructure

• How GIS is currently making businesses better, and how you can apply the same techniques to your industry or organization

• The expanding roles of GIS and spatial technologies in the web and mobile environments

• The ethical, legal, and security issues of spatial technologies

• How to conduct a cost / benefit and ROI analyses for GIS

Grounded in the real world of business and IT, Geo-Business will show you how spatially enabling your IT systems can give you a unique advantage to beat your competitors in the market, win and retain customers, grow your business, make better decisions, develop new products and services, and optimize your workflow.

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Geo-Business

John Wiley & Sons

Chapter One

BUSINESS IN THE DIGITAL ECONOMY

Spatial technologies and GIS are impacting the productivity of business and economies. As information technologies have become more pervasive, interactive, mobile, internet-based, and diffused throughout the enterprise, likewise spatial technologies have done so. Information technologies became prevalent for mainframes in the late 1950s and early 1960s, while GIS only appeared commercially in the late 1960s and became widespread in government in the late 1970s. This lag means that information technologies became well established in organizations about fifteen years earlier than GIS. In the business world, the lag is greater because GIS was first adopted by governments, remained largely a public-sector feature for two decades, and only became widespread in businesses in the 1990s.

The reasons that GIS has not caught on until recently in the business sector include its high cost and lack of perceived benefits. Spatial datasets are larger than corresponding non-spatial ones. Often spatial data analysis requires more processing power than similar non-spatial analysis. Thus, computing capacity parameters took longer to provide enough speed and power to adequately support spatial analysis and its applications. Second, business people have had less overall knowledge of spatial principles and applications than their government counterparts. Until recently, exposure to spatial software in industry was limited and fairly expensive. Training is sometimes difficult for the average business person to obtain. Software training is provided by GIS software vendor firms and many community colleges. An example is the GIS Education at City College of San Franciso (CCSF, 2007). Universities have not until recently emphasized the business side of spatial technologies. GIS is a prevalent tool in schools of planning and public administration, but is only beginning to take hold in business schools (Pick, 2004). Generally, universities have not understood what is needed to educate and train the geospatial workforce (Marble, 2006). Third, business top management leadership in the 1990s infrequently recognized the importance of spatial dimensions. Today more business leaders do recognize it. As seen in cases in the book, some top leaders in companies that heavily utilize GIS/Spatial technologies do recognize its significance strategically, while others do not.

The Rise in the Internet Platform for GIS

Another set of trends that has stimulated spatial and GIS applications is the rise of the internet, web, and e-commerce applications. The following recap of the development of the internet, underscores how recently web-based GIS has been possible and how it serves as a driver for GIS.

Although the application of the internet started in 1969 at the U.S. Department of Defense Advanced Research Projects Agency (DARPA), the main protocol of TCP/IP was not developed until 1974 and only came into research and academic use at leading centers in the late 1970s. TCP/IP (transmission control protocol/internet protocol) is the protocol that controls internet communications between computers. The management of the internet shifted from Department of Defense (DOD) to the National Science Foundation in 1987 and to international commercial organizations in 1995. At that point, the backbone internet traffic was taken over by commercial telecommunications carriers worldwide such as MCI Inc., AT&T, Sprint, and Nippon Telephone Company. As seen in Table 1.1, the number of internet hosts worldwide increased steadily from the mid 1980s to 2005 (The Internet Society, 2006). An internet host is any computer system connected to the internet from a full- or part-time, direct or dial-up connection (more specifically, a host is any computer with an IP address). Since internet hosts only exceeded 100 million in 2000, this table underscores why widespread GIS and spatial applications on the internet are recent.

The World Wide Web (WWW) was originated in 1989 at the European Laboratory for Particle Physics by Tim Berners-Lee. It allowed a user to jump around the internet by links attached to text and imagery. The first browser, Mosaic, was invented in 1993 at the National Center for Supercomputing Applications at University of Illinois. This browser and others that followed such as Microsoft Explorer (1995) led to standard and user-friendly interfaces that made the web navigation much easier.

Businesses had been able to use the internet to conduct some business transactions in the 1980s through Electronic Data Interchange (EDI), but the control of the interchanges was not user-friendly, so it was mostly specialists in IT departments who developed, operated, and utilized EDI. With the advent of the WWW, a new form of business exchange became available, electronic commerce. Electronic commerce is the conduct of commercial transactions on a widespread basis through internet-based exchanges, mostly WWW-based. It grew in the early to mid 1990s and today is estimated to underlie about 5 percent of the U.S. economy, a proportion that is growing. E-commerce can be business-to-consumer (B2C) or business-to-business (B2B). Business-to-consumer e-commerce consists of business transactions and exchanges between a customer and the business; for instance, if a consumer on the web purchases a laptop computer from Dell, or books from Amazon. Business-to-business involves transactions and exchanges between two or more businesses. An example is a B2B website for chemical companies to sell and purchase chemical products with other chemical firms. Often B2B applications provide the basis for market transactions.

The expansion of e-commerce in the United States has been rapid and continues. For instance, e-commerce as a percentage of U.S. retail sales grew steadily from 0.91 percent in 2000 to 2.37 percent for year 2005 (U.S. Census, 2006). E-commerce trends relate to GIS applications, since spatial interfaces are beginning to be involved. This can be through B2C user interfaces with spatial features, marketing of e-commerce, and delivery of goods. For instance, many Google Earth mash-ups, i.e. third party products based on Google code, allow customers to search for business products and services, and conduct online business transactions. The Sperry Van Ness case at the end of the chapter supports spatial features on the web so brokers and their customers can more quickly research, market, and close commercial real estate sales transactions.

Since spatial systems tend to lag information systems (IS) somewhat, web-based spatial applications have only appeared heavily since 2000. Today the shift in spatial applications is steadily towards the web and internet (Sonnen et al., 2004; Sonnen, 2006; Daratech, 2004). Users find the internet platform appealing, easy, and flexible between devices. However, the web protocols and the designs, servers, and software to support these spatial applications are still in development. For instance, the leading spatial web protocols such as GML (Geography Markup Language),WFS (Web Feature Services), and WMS (Web Map Service) are available through a leading standards body, the Open Geospatial Consortium (OGC), but are not yet fully accepted industry standards.

E-commerce applications with spatial components became evident in the Dot.Com boom of the late 1990s with the advent of real estate, transport routing, and other web-based services with map features. The e-commerce with spatial features is growing and particularly relates to B2C in such sectors as real estate, retail, tourism, transportation, and distribution. These spatial advances became evident in 2005 to larger audiences of hundreds of millions of internet users through the milestone advent of Google Earth, Google Map, Microsoft Virtual Earth, and Yahoo Map, and smaller "mash-up" applications. For example, a person ordering a pizza online compares pizza parlors based on their location and the web links describing them, and then ordering online at Pizza Hut (see Figure 1.1).

The breakthroughs in 2005 also swept through the GIS industry and influenced GIS software companies to undertake new strategies of web-based applications that are broadening and changing spatial applications for varied businesses, large and small, across many vertical sectors.

This trend towards the spatial-web is a recurring theme in this book, in the chapters that explain different aspects of GIS in business, and also in many case studies. The Sperry Van Ness case demonstrates how a medium-sized firm can make wise choices of internet platforms and software, not try to do too much, and be highly successful today in the spatial-web space.

Also in the 1990s, large-scale, enterprise-wide software applications became more prevalent (Gray, 2006). These include Enterprise Resources Planning systems (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM). The difference from the functional systems available earlier is that these systems apply widely across all locations and many if not all divisions of a business. ERP supports integrated transaction processing systems across wide functional areas including accounting, finance, marketing, sales, production, human resources, and inventory. CRM systems support managing the long-term relationships with the company's customers, from initiation, through building and development and growing breadth of relationships, to transfer, termination, or upgrading of relationships (Gray, 2006). Supply Chain Management (SCM) monitors, manages, and projects companywide flow of raw materials, components, and finished products throughout the manufacturing, distribution, and delivery processes (Gray, 2006). It not only tracks physical items, but also the associated flows of information. If the materials, components, and products moving through the supply chain are geo-referenced at many points in the process, then the supply chain can be better understood, tightened up, optimized, and made more predictable than without geo-referencing.

Geo-referencing refers to adding X-Y (longitude-latitude) fields to an existing data record. Although less prevalent, this might be in 3-D, i.e. X-Y-Z (longitude-latitude-elevation). 3-D geo-referencing can be used for terrain elevation modeling and other applications. Roughly 80 percent of business data has the potential to be geo-referenced, i.e. have a spatial location attached to it (Bossler, 2002).

Because of its greater prevalence of web-based architecture, GIS is becoming more strategic in its applications, often extending across the enterprise. It is no longer restrained to traditional, 1990s departments that maintained compartmentalized datasets not accessible to the outside. Rather, following a long-term IT trend, spatial systems are beginning to be incorporated as a key part of enterprise-wide business applications such as ERP, CRM, and Supply Chain. The process of its movement into these domains has been inconsistent, bumpy, and sometimes resisted by management and users. Another constraint has been how to seamlessly bridge between the large enterprise business applications, which were originally developed without spatial modules, and the complex GIS software packages. However, vendors of both types of software, such as SAP and ESRI Inc., see the opportunity and are working on smoother and more efficient connecting interfaces. In medium and large firms, the enterprise applications were often implemented by IT specialist groups that were not grounded in spatial principles and often isolated from usually small GIS departments, creating other obstacles that have slowed the pace of development. Of the book's twenty research case studies, few yet have implemented GIS integrated with enterprise applications, and none fully.

Spatial Data

When spatial and GIS applications take place in business, whether traditional client-server systems or enterprise-web-based ones, they are based on business data. High quality spatial data (boundaries and attributes) are critical because they support any spatial application and serve as the foundation for analysis, modeling, and decision-making. Spatial data consists of two parts:

the digital map boundaries, which constitute the map layer or map coverage

data associated with the map layer, which are commonly alphanumeric but can also be video images, audio, and other forms. The non-spatial associated data are referred to as attribute data, and are considered more in Chapter 2.

The role of the two types of data can be seen in the simplified Generic Design of a GIS, shown in Figure 1.2. The digital boundary data on the bottom right are input from the internet, global positioning systems (GPS), satellites, and internal sources, and provide the digital boundaries for each map layer. The attribute data on the bottom left are input from other internal and external sources, and provide the non-spatial attributes associated with spatial features. For example, the diagram's middle boundary layer shows three roads. The non-spatial features of each road (width, materials, date of construction, date of most recent maintenance) are stored in an attribute table associated with the map layer (shown on the left). The model of GIS is explained in detail in Chapter 2, while spatial data are emphasized in Chapter 8. The Model also has analysis and modeling functions, which depend on the boundary and attribute data. This includes functions for statistics, simulation, forecasting, and spatial analysis. Finally the outputs at the top are the processing results of the GIS-maps, graphical displays, tables, and other information that is provided to the user for decision-making.

Important aspects of spatial data are its cost, ownership, security, privacy, data quality, and currency/updating. The need to assure all this makes data acquisition often costly and time-consuming for the following reasons:

A well-known estimate is that 80 percent of the development costs of a GIS project are data expense (Bossler, 2002). The reasons are that spatial data are often voluminous, come from varied data sources, may have quality issues, and they may not be compatible with each other or with the GIS software. The latter issue stems from the GIS industry's need to update and replace standards, as a consequence of business and technical change, a topic addressed in Chapter 5.

Data quality is also a problem. Not only are there the usual problems with the attribute data, but in addition serious challenges exist with the accuracy of digital boundary files (Meeks and Dasgupta, 2005). Some of the digital boundary data were originally collected before GPS (Global Positionig Systems) and satellites provided precise locations. A prominent example of this are the base boundary files (TIGER) of the U.S. Census, which have been updated to GPS-accuracy for the 2010 Census. Even with GPS and satellites, errors can occur in the processing and management of the data, as well as in correctly identifying and labeling location. If the user needs exact locations, such as for pipelines or utility lines, then there is a need to do thorough checking for data accuracy. If necessary, accuracy assessments with GPS against physical features in the field may be necessary at extra time and expense to ensure the data quality. Accuracy is also needed to assure the precise connectivity of pipelines with each other.

The data cleaning, checking, and modifications can exceed ordinary data quality assurances because both the attribute and spatial data need to be individually checked and often modified, but also they need to be compatible with each other and with the GIS software.

A large proportion of business-generated data are proprietary. This means that they are either not released by a firm or only to trusted or partner firms and often at cost. The firm has legal ownership of the data, so in the event of disputes over ownership or data theft, threats or even lawsuits can occur.

Coordinate systems in boundary layers may be mismatched. Modern software tools can help in achieving matching, but good technical understanding is often needed.

(Continues...)

Excerpted from Geo-Businessby James B. Pick Copyright © 2007 by John Wiley & Sons, Inc.. Excerpted by permission.
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