Transforming Location Intelligence into Profit

Over the next few weeks, this blog series will provide an overview of some of the basic uses of location intelligence (LI) at an enterprise level, its capacity to optimize business processes, and its hierarchy of benefits that impact positively on profitability and competitiveness.

Here’s what readers can expect to learn:

location intelligence as an emerging dimension of business intelligence
market factors and business conditions that are driving its uptake
a hierarchy of benefits available to the enterprise
some factors to consider when selecting a location intelligence solution provider

Location Intelligence: Definition and Context

Some progressive organizations are starting to recognize the value of location as an organizing principle. They see how it is embedded in corporate information, and can be applied to current business problems. Through the use of location intelligence technology, these organizations are finding ways to leverage a latent asset.

As a result, telecommunications companies are improving the serviceability of products across their customer base to increase profitability, insurance companies are better understanding risk and pricing to contain costs, utilities are more accurately meeting compliance requirements, and civil authorities are improving threat detection and emergency management capabilities. These are just some of the applications at an enterprise level.

The strategic use of location intelligence is being propelled by several key business drivers, including the need to increase revenue while simultaneously contain or reduce costs. These strategic imperatives form two sides of the profitability equation, which location intelligence is well-suited to solve.

Location intelligence describes the capacity of an entity or organization to use the principles of location to organize, reason, plan and problem solve. It is not defined by the mere presence of location-enabled technology, but moreover by the degree information is enriched by the perspective of location and the successful integration of this information into a process of decision making.

Specifically, location intelligence is the capability to organize and understand complex phenomena through the use of geographic relationships inherent in all information. Applied in a business context, the outcomes are meaningful, actionable and can provide a sustainable competitive advantage. Building location intelligence successfully requires business specific domain knowledge, formal frameworks, and a relentless focus on desired business outcomes. It’s about transforming business processes and creating opportunities.

Dimensions of Location Intelligence

Location intelligence applications are generally industry specific. However, within that framework, uses can be sub-sorted into three sub-categories:

Enterprise decision support: enterprise applications, often vertically focused, that illuminate optimal business strategy. For example, a telecom company consolidating newly acquired customers can identify common customers and determine how to offer services to achieve the greatest value. An insurance company can link geography dependent risk elements such as proximity to a flood zone or density of coverage in specific neighborhoods to better contain costs, and mitigate or more accurately price for risk.

Customer service: applications that facilitate customer service and self-service to improve the overall customer experience.For example, a government agency can more efficiently measure service levels or plan for the distribution of services that are in many cases dependent on variables that change over space, such as household income or number of children. Governments may also be able to better protect constituents by applying location intelligence to existing workflows so as to enhance fraud detection or threat detection capabilities.

Consumer applications: enterprise applications that build loyalty among customers and influence purchasing behaviors. For example, retailers can execute store-specific promotions with more accuracy, and profile and target their markets, resulting in the identification of higher value customers. Or retailers may use location intelligence to augment loyalty program services via internet channels, as in neighbourhood smart store offerings.

Table 1.0 – Use scenarios for location intelligence by industry

Uses of Location Intelligence

Communications & Media

Insurance and Finance

Government Services

Marketing