Putting Irish Business on The Map
Author:
Peter Keenan
A variety of IT tools have become indispensable in modern business including spreadsheets, databases and the Internet. Novel IT tools continue to emerge and one interesting development is that of Geographic Information Systems (GIS), which store and represent data dealing with location. GIS software has long been used in engineering sectors and in Irish organisations like Coillte, but has not yet reached its full potential in general business.
Mapping Applications
Business-people are accustomed to using graphics to convey information in reports and presentations, reflecting the adage that a picture is worth a thousand words. Bar charts and histograms have serious limitations when applied to location data. For example, a bar chart of sales per county arranged in alphabetic order would show Carlow, Cavan, Clare and Cork together. Such a chart would not allow a manager to easily identify geographic sales patterns where, for example, sales were higher in the eastern or western parts of the country. Mapping software can overcome this limitation and provide a clear representation of sales in each region. While traditionally mapping software was only available in specialist packages, in recent years it has been included in common spreadsheet programs such as Excel (if you install the mapping software option). Excel allows the easy creation of simple maps showing counties in Britain and the Republic, although for some reason the six counties are not shown. The simplest use of this tool is to generate bar or pie charts positioned on a map (see figure 1). To produce the map, the user creates a table of data in the spreadsheet showing county names and the values which are to be plotted. Another option is to create a choropleth (or thematic) map which uses colour to represent different data values (see figure 2). Simple maps such as these can effectively convey business information and are of particular interest for strategic and marketing applications.
Moving Beyond Maps
While the display of information in a map format can be useful, GIS can be applied in a more proactive manner to assist in strategic and operational planning. Spatial analysis techniques can be used to assess the potential sales which a particular region might generate or they can be used to minimise costs, for example by planning an efficient distribution network.
Success in business can be measured in absolute or relative terms. The potential of a business may be assessed by measures such as the size of the market in which the organisation competes. In many situations the size of this market is largely determined by the physical positioning of the organisation’s facilities (for example shops, warehouses, service bases), as each facility serves a limited geographic area. One example would be a retail business with shops in various parts of the country. How can the performance of these shops be assessed? One measure would be the volume of sales generated relative to the population in the outlet’s catchment area. However, a simplistic approach to defining this area could produce misleading performance metrics. The populations of towns are readily available, so perhaps the sales could be assessed based on the population in the town the shop is located. In reality, the catchment area of the outlet could include a rural area far beyond the town concerned. Therefore the performance of shop in Roscommon might be based on the population of the county rather than just the town itself. However, this approach too has its limitations. Major towns are not always situated in the centre of counties, so many Roscommon people shop in towns like Athlone, which are not in County Roscommon. If the organisation has shops in both Drogheda and Dundalk, then a simplistic approach might assume that each had about half of the population of Louth as their customer base. This would not be an accuarate representation of the situation, as the Drogheda store would have many customers from Meath and Fingal, while the Dundalk store would cater to people living in Monaghan, Armagh and Down as well as Louth. A GIS analysis would allow realistic analysis of the potential market for these locations. This would include travel time analysis which would take account of travel time on different types of road, recognising that people might well be willing to travel further on motorways.
Location analysis identifies the best location for facilities to service a distributed population. This form of analysis is of importance in Ireland where the population is growing quickly in many areas, and where new roads offer the possibility of reorganising existing distribution patterns. Many organisations are now adopting an all-Ireland distribution strategy and GIS can help in optimally relocating facilities to achieve this.
Implementation Issues
The use of GIS requires the use of appropriate software, and the availability of appropriate data. In general, comparatively little data is needed for the creation of simple maps (presentation applications) while analysis applications typically require more comprehensive data. Spatial data is available in digital format from a variety of suppliers including The Ordnance Survey and a number of private sector data providers. An Post’s Geodirectory provides location data for 1.5 million buildings in Ireland, accurate to within 1 metre. Location data can be linked to an organisation’s customers using address-matching techniques. This is not entirely straightforward in Ireland, as addresses lack postcodes and are less consistent than in some other countries. Address matching is likely to be more successful if a well structured database of customer addresses exists within the organisation. An alternative ‘do-it-yourself’ approach to collecting location data for customers is to use a Global Positioning System (GPS), perhaps by placing a GPS in a delivery vehicle and recording location data as deliveries are made. Depending on the precise nature of the application, further information may be required. For example, transport applications require accurate representation of road networks, including one way streets and complex motorway intersections. Similar issues arise where GIS is used to represent utility networks such as gas or electricity networks, where links in the network may have differing capacity constraints. When customer locations have been identified (geocoded), the data can used in order to offered a customised service based on their location. Prospective customers can be directed to the nearest branch of the organisation or allocated to their nearest delivery route. Organisations usually need to compete on both price and service. GIS techniques allow both these objectives be achieved by facilitating both cost-effective and efficient distribution. An awareness of the potential of GIS techniques is vital for all but the smallest companies to effectively compete in the 21st century.