Business Strategy is a medium term path to realise the long-term vision and mission of a company by setting objectives. Vision and mission statements such as American Express’ "to be the world's most respected service brand" or IKEA’s "... is to create a better life for the many people" are generic and all-encompassing in nature. Business Strategy is the manner in which these are achieved, e.g. optimal raw materials sourcing and product yields, selection of appropriate manufacturing technology and plant configuration, manufacturing and supply chain locations, customer segmentation, sales and distribution channels, competitive strategy etc.
Strategies governhow, what and where companies produce, where and to whom they sell and distribute their produce. Hence, answer to “Where is …?” has significant bearing on the Business Strategy and location plays an important role in the company’s profit and success. Right Location Strategy to select optimal locations of company’s presence is therefore vital to every company.
Until a decade ago, such decisions were taken based on analysis of demographic survey, census, sales or distribution statistics report or tabulated data. But without simple, effective ways to visualize, analyse and integrate such tabular data, it ended up being just that - data.
With GIS becoming more accessible to and usable by decision makers beyond a few GIS professionals, a whole new dimension of “spatial intelligence” opened for decision making.
Both the data and analyses have moved in to spatial domain. Mapping the data allows easy viewing, understanding, interpreting and questioning data in ways that are not possible with tabular data.
This has had significant, visual impact on many strategic decisions and within last 5-6 years, Location Strategy has become an integral part of Business Strategy. GIS, spatial data and GIS applications have become strategic tools for modern corporate. Some of the important aspects of 'location' that GIS helps define are:
• Property size & shape e.g. plot, shop, corridor
• Location – attracting footfall, outside CRZ/forest boundary,
• Transport –road/rail network, port connectivity
• Demographics – proximity to customers with purchasing power/labour market
• Infrastructure availability – water, power
• Proximity to suppliers & distributors
Finding property of required size is an obvious application. However, only a few companies have employed raster and terrain analyses for cross country pipelines, transmission lines or new rail/road alignment. Experience in India has shown that such analysis can yield as much as 5-8 percent CAPEX savings besides reduced time for RoW permissions.
GIS use for store location, franchise selection and target marketing based on geo-demographics has become common with retail and food business. GIS analysis of prospective locations for retail outlets gives startling insights. For example, in Mumbai, a property on the main thoroughfare was rejected due to 'barrier' effect reducing footfalls from the other side of the road. Nature of merchandise sold is heavily influenced by demographic analysis.
Large chemical industries can be suitably located near sources of water and EHV switchyards. Proximity to road & rail network or ports for bulk materials like fertilizers, cement or automobiles can be easily accessed and visualized using GIS. Locating new factories outside CRZ/forest zone avoids future compliance issues. Intuitive spatial analyses output on map allows quick and objective decision making.
In some businesses like telecommunications and utilities, GIS has become the main operating platform for several functions as it brings about operational and productivity improvements. However, this is possible only if end-to-end work flow using spatial information and analysis are deployed involving maximum number of employees to move the business process along.
Several power distribution companies in India have implemented GIS to run their routine operations including new connections, operations & maintenance etc. on the GIS platform. Some of Indian telecom companies like Reliance Communications and Reliance Jio routinely utilise GIS for feasibility checking, network expansion as well for operations and maintenance. Airtel, another Indian telecom company uses GIS to transparently communicate their network availability to customers and prospective customers. Many telecom and cable companies like Reliance, AT&T, Verizon use GIS for their network design, engineering, construction management to operations & management. Reliance have tightly integrated their GIS and OSS to significantly reduce network build and commissioning time.
Mining and exploration companies like Rio Tinto, Peabody Energy use GIS to track their properties, leases, cut-and-fill analyses and production activities. Several Oil production companies including Shell use GIS in their day-to-day exploration activities.
Entire business of Uber, Ola, AirBnB, Oyo runs on GIS tools like vehicle routing, proximity analysis and dispatching. Firms as diverse as Coca Cola to Reliance use GIS based treat management systems. In banking GIS is used for improving bank branch and ATM coverage while in insurance, use of GIS helps in better understanding of risks as well as helping the insured in case of natural disasters.
With the advent of sensors and IoT, attribute data collection with location capture is literally exploding. By virtue of its spatial analytical capability and open source Big Data connectors, GIS is fast becoming a strategic, analytic DSS platform for the businesses of future.