Location Intelligence: Why is it Useful?

Posted by kirsty  Blog, Business Intelligence

What is location intelligence?

Wikipedia:

Location Intelligence is the capacity to organize and understand complex phenomena through the use of geographic relationships inherent in all information. By combining geographic- and location-related data with other business data, organizations can gain critical insights, make better decisions and optimize important processes and applications. Location Intelligence offers organizations opportunities to streamline their business processes and customer relationships to improve performance and results.

LI enables business analysts to apply geographic contexts to business data.

It’s not surprising that organizations want to combine geographic and location data with traditional business data – employees, customers, facilities, inventory, vendors and suppliers, and other assets all have a location component. By combining geographic data with traditional business data, users are provided with the insights and context to make better business decisions.
What about online businesses? Well, Location Intelligence is still important for them too. Knowing where your customers come from allows you to tailor effective marketing campaigns. Knowing their location might also help you choose which medium or media channel to use to get your message out.

Context: how is Location Intelligence being used today?

• In Retail, location services like Foursquare provide the geospatial information that a customer is at or near a retailer’s store. Combining this with customer data such as preferences and purchase history allows retailers to make timely and relevant offers to consumers that can result in additional sales.
• Location is very important in the insurance industry, where customers and natural disasters are both tied to a location. When a natural disaster occurs, insurance companies have the ability to instantly understand their claims exposure by visually plotting their customer data and the affected area on a map. This also allows them to more accurately estimate the resources they will need to process claims in an affected area.
• Site selection, the decision about where to locate a new store or facility, is probably the most common application of Location Intelligence today. When location data is combined with available real estate data, demographic data, data on current customers, and information on prospective customers, the resulting Location Intelligence can help identify a site location with maximum revenue potential.
A recent research report – Location Intelligence: What can be Expected as BI embraces Location and Cloud – released in March this year by Saugatuck Technology defines the benefit of LI in the following way: “Integration of Location (GIS) and standard BI platforms brings LI to greater usefulness by making it available as an option to anyone who is familiar with the more readily-available BI solutions, and without the need to master new concepts or a new user interface. Spatial relationships also greatly enhance many of the details commonly reported by BI systems, providing an added level of analysis that is useful in viewing and assessing trends (and existing data types).”

Usefulness by business function

Here are some examples of how LI can be useful in different departments of a business: Planning and construction
• Site selection
• Geographic impacts and factors for current and future developments
Operational and supply chain processes
• Optimizing transit routes (e.g. the fastest transportation routes and enhancing on-the-move communications by mapping cell phone towers)
• Enabling effective forecasting (matching store locations with the size of surrounding populations can be used as a guide to determine potential profitability)
• Optimizing warehousing processes and stock flows based on the consumption rates of particular products by locality
Sales and Marketing
• Customer clustering
• Revenues / sales per country, state, region
• Postal addresses of target customers
• Marketplace gaps, opportunities, threats and level of penetration (by adding a time element, it is also possible to track and predict growth)
The bottom line is that LI can be used across a breadth of industries – retail, telecommunications, financial services, government, logistics….