A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business
An international study on location decision making practices

This report was prepared by BusinessWeek Research Services

(a division of the BusinessWeek marketing department) and
MapInfo Corporation, based on research developed and conducted
by BusinessWeek Research Services. The research, and publication
of this report, were sponsored by MapInfo Corporation.

RESEARCH CONDUCTED BY BUSINESSWEEK RESEARCH SERVICES AND SPONSORED BY MAPINFO

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Title: Title Intelligence:

Location
The New Geography of Business

TA B L E O F C O N T E N T S

EXECUTIVE SUMMARY

T H E G R O W I N G I M P O R TA N C E O F L O C AT I O N

AN UNDISCOVERED GOLD MINE

T H E P O W E R O F L O C AT I O N I N T E L L I G E N C E

T H E VA L U E O F L O C AT I O N I N T E L L I G E N C E

P R O F I T I N G F R O M L O C AT I O N I N T E L L I G E N C E

ACQUIRING TECHNOLOGY

S U R V E Y D E S I G N & I M P L E M E N TAT I O N

RESPONDENT PROFILE

T E C H N O L O G Y A C Q U I S I T I O N PAT T E R N S

THE TECHNOLOGY GAP

PERCEPTION VERSUS ACTION

10

PROBING THE TECHNOLOGY GAP

10

CLOSING THE TECHNOLOGY GAP

11

B E N E F I T T I N G F R O M L O C AT I O N I N T E L L I G E N C E

12

TECHNOLOGY MINDSHARE

12

TECHNOLOGY INVESTMENTS

12

P R O B I N G T H E L O C AT I O N I N T E L L I G E N C E G A P

13

R E A L I Z I N G T H E B E N E F I T S O F L O C AT I O N I N T E L L I G E N C E

14

T H E G R O W I N G B E N E F I T S O F L O C AT I O N I N T E L L I G E N C E

14

Title: Title

EXECUTIVE SUMMARY
More than 80% of all data maintained
by organizations around the world has a
location component.
Just like the CRM-style analytical solutions
of a decade ago, location intelligence
offers value to an organization by using
sophisticated technology and analysis to
help executives and enterprise-level users
alike make critical business decisions.
Using economics, demographics, physical
geography and other data pertaining to
location, location intelligence helps detect
patterns, risks, and opportunities often
difficult to see in a basic spreadsheet analysis.
For financial, insurance, communications,
and retail operations, location intelligence
provides very specific benefits, which translate
to increased revenues, reduced costs, and
improved efficiency for any organization.
Yet many high-level executives still have not
embraced this technology.
In an effort to understand these opportunities,
BusinessWeek, the worlds leading business
magazine, and MapInfo, the leader in location
intelligence solutions, conducted a survey of
more than 1700 C-level executives employed
by organizations with 500+ employees and
grossing $50 million or more.

Findings show that while more than half

of these individuals, all involved in making
technology decisions for their organizations,
cite technology as critical to their organizations,
fewer than 20 percent currently purchase
cutting-edge technology.
Even more interesting is that 64 percent
believe location intelligence can improve
business processes/decision-making and
21 percent are planning to investigate it
further in the next year. Thirteen percent
of respondents stated they were already
using it or currently evaluating it.
In conclusion, the benefits of location
intelligence are becoming better understood
and seriously investigated or utilized by
decision makers in a range of vertical
markets. The white paper explores the
benefits of location intelligence, offers
real world results, and shares key findings
from the BusinessWeek Research Services
survey on the technology gap that business
leaders must overcome to compete
more effectively.

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Title: Title Intelligence:

Location
The New Geography of Business

The Growing Importance of Location

Robert Kiyosaki, author of the bestselling book Rich Dad,
Poor Dad, recalls a lesson that he learned years ago from
Ray Kroc, founder of the McDonalds restaurant chain.
Following a lecture, Kroc asked a group of MBA students
what business he was in. Everyone laughed, thinking the
hamburger king was just joking, so Kroc asked again,
What business am I in? This time, one of the students
gave the expected reply: The hamburger business, of
course, the student said. Kroc promptly told him that he
was wrong. Ladies and gentlemen, he declared, Im not
in the hamburger business. My business is real estate.
Kroc went on to explain to the skeptical students that,
while his companys business plan stated the obvious
that his primary day-to-day activity was, in fact, the selling
of hamburger franchisesKrocs main interest was the
physical location of each franchise. As Kiyosaki writes,
Ray Kroc knew that the real estate and its location was the
most significant factor in the success of each franchise.
Basically, the person who bought the franchise was also
buying the land under the franchise for Ray Krocs organization. Today, notes Kiyosaki, McDonalds is the worlds
largest single owner of real estate, a portfolio that includes
some of the most valuable traffic intersections in the world.
An Undiscovered Gold Mine
Ray Krocs legacy as one of Americas most successful
entrepreneurs is due to more than his sage business
acumen. It also stems from his ability to uncover rich,
hidden insights like this onelucrative insights that
might have remained invisible to the untrained mind.
Other visionary business leaders, in fields as wide-ranging
as financial services, telecommunications, and health care,
have been blessed with similar perceptiveness, and their
companies have benefited enormously for it. Yet these
experiences should cause the rest of us to wonder: what
equally valuable insights are we missing in the day-to-day
operations of our own organizations?
As it happens, most businesses are immersed in a world
of readily accessible data that could significantly improve
their companies efficiency, effectiveness, and profitability.
Unfortunately, only a minority of firms currently takes
advantage of this rich mine of dataor, apparently, are
even aware that it exists.

And yet that data not only surrounds most modern

organizations, but invites their leaders to dig as deeply as
they might wish. That data, in short, is an undiscovered
gold mine, and it can be collected, analyzed, and deployed
much more easily than one might expect.
The Power of Location Intelligence
This undiscovered gold mine of data includes the
demographics, economics, physical geography, and
other characteristics that pertain to location the spatial
environment in which a given organizations operates,
interacts with its customers, and transacts business.
Like the proverbial tree falling in an empty forest,
this data exists independent of anybodys taking note of it.
The data becomes valuable to an organization, however,
only when it is collected and analyzed, and when the
conclusions resulting from its analysis are used to inform
the organizations decision-making. For instance, absolute
data like a citys population can serve as a rough gauge of
a markets potential, but only relative dataa matching of
store locations to local demographics, or the comparison
of a companys own wireless network to those of its
competitorscan yield true location intelligence.
Of course, almost all organizations give at least passing
attention to the characteristics of location, whether in
evaluating traffic patterns in choosing a franchise location,
determining optimal travel routes to and from an airport,
or calculating market wages in deciding where to site an
industrial plant. There is certainly benefit even in these
isolated, often unstructured observations. But assessing
the impact of location in this waycall it location
inference is a little like stargazing without a telescope.
While certain patterns and points of light may be visible to
the naked, stargazing eye, the intricate relationships among
stars, the evolution of star systems over time, and even
hidden celestial features like distant planets and neutron
stars become apparent only when one systematically
searches the sky with advanced, finely tuned optics.
Although less familiar than giant telescopes and RT arrays,
the software and analytical tools necessary for systematically
probing location-based data closer to home are just as well
developed, and offer willing companies a far richer and
more informed perspective on their physical operating
environment than is possible with more casual analyses.

Title:
Title
At least
80% of all data maintained has a
location component

These tools allow companies not only to observe and collect

data describing even the hidden, business-relevant features
of their location, but also to probe and deploy this data in
a way that greatly enhances understanding of the impact
of location and, ultimately, enables organizations to
dramatically reduce costs, increase revenues, and boost
profits. Such tools thus help to translate the notational
location inference into a much more powerful form of
location-based knowledge called location intelligence.
The Value of Location Intelligence
Conceptually, location intelligence bears many similarities
to the customer intelligence concept that grew to
prominence during the 1990s and that underlies such
well-known technology solutions as customer relationship
management software, more commonly known as CRM.
The core premise of customer intelligence and CRM
software in particular was that, if a company knew more
about a particular customers demographics, preferences,
and buying habits over time, it could tailor marketing
offers and customer interactions in a way that would
increase the customers propensity to buy and, in general,
boost the customers overall lifetime value. So accepted
has the concept of customer intelligence become in the
years since then that virtually every business now employs
itsome intuitively, others within the context of a formal
CRM solution.
As noted, location intelligence has also been part of
business operations for decades, at least in a rudimentary
form. For instance, long before the advent of computers,
delivery firms planned pick-ups and drop-offs so as to
minimize travel time and fuel use. Retailers and service
franchise owners like dry cleaners and car repair shops
typically have taken a number of factors into account
before deciding where to locate their businesses.
And, of course, real estate agents have long known that
home values are determined primarily by three factors:
location, location, location.
As obvious as these examples are, they represent only
a fraction of the actionable intelligence inherent in a
companys location, and a small portion of the value
that can be obtained today from sophisticated location
intelligence tools. Location and its business-relevant
implications, in fact, infuse nearly all business operations:
every organization with a physical presence exists
somewhere, and the same is true of nearly all of that
organizations customers and suppliers.

Indeed, according to some surveys, at least 80% of all

data maintained by organizations around the world has
a location component.
But is location really all that relevant? Consider:
IN RETAIL, where a store is located tends to affect sales
performance more than any other factor. Great managers,
great marketing programs, and even great products often
have far less effect on sales than does a premium location.
As a result, sophisticated location intelligence tools can
help retail owners to:

Determine optimal store locations

Simultaneously maximize market share and per-store
performance
Quantify and avoid cannibalization among stores
Generate detailed site-specific forecasts for operations
and strategic planning
Precisely match media and marketing messages to
targeted households
Determine how well a concept translates from one
market to another
Identify under-performing stores and determine which
to close and which to renovate
IN FINANCIAL SERVICES, diversification and commoditization

have forced down margins to the point that financial

services firms, in order to remain profitable, must optimize
every transaction and every customer touch point.
Location intelligence benefits these financial services
providers by helping them to:
Maximize individual branch performance
Evaluate expansion opportunities by determining the
optimal number, placement, and priority of new branches
Optimally allocate branch and sales staff
Isolate personnel performance problems from intrinsic
market problems
Better understand customer needs and behaviors
Matching financial product mix to both customer
segment demographics (e.g., increased mortgage demand
in growing suburbs, retirement planning for Sunbelt
areas) and life events (e.g., saving money for college)

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business

B T ( B R I T I S H T E L E C O M ) W I L L R E A L I Z E A C O S T S AV I N G S O F 2 3 M I L L I O N ( $ 4 1 M I L L I O N )

over five years as a result of implementing a location intelligence solution for its 17,000 field service engineers.
The solution enables engineers to respond to network outages more quickly than they previously could,
thereby reducing system downtime and minimizing customer service and engineering costs.

Identify under-performing branches and determine

whether to retain, relocate, or close them
IN INSURANCE, underwriters that do not take full account

of the locations covered by their policies do not fully

understand the risks that they are assumingand often
suffer financially as a result. Hence, location intelligence
tools can assist insurers by:
Accurately assessing marketing potential, better focusing
marketing, sales, and distribution management,
and maximizing producer effectiveness
Improving underwriting decisions by providing more
accurate exposure analyses
Increasing competitiveness through more refined and
accurate pricing.
Increasing organizational efficiency and profitability
through deployment of low touch or no touch
automated underwriting systems, augmented rules
engine technology, and enhanced service-oriented
architectures supported by web services applications
Managing risk on a portfolio basis and complying with
regulatory reporting requirements
Streamlining claims handling processes and providing
added-value customer service offerings
IN COMMUNICATIONS, many wireless companies have

learned a very expensive lesson that even minor variances

in location can greatly affect service quality, customer
retention, and profitability. In addition to avoiding or
minimizing problems like these, communications
companies can benefit from location intelligence tools by:
Analyzing market demand, network coverage, and
competitor data in order to optimize network design,
build-out, and maintenance

Providing superior customer service, including identification of emerging trouble spots, calculation of downtimes,
and real-time deployment of network engineers
Understanding customer demand and competitive threats
so as to enable creation of market-driven offerings and
competitive pricing schemes
Generating highly qualified sales leads based on service
availability and various customer groups likelihood
of subscribing
As an example, assume a communications company needs
to determine the market potential for its service offerings.
Using a location intelligence solution, the company might
define its trade area and then compare infrastructure and
tax boundaries, overlaying them as base layers.
To this information they might add demographics and
customer segmentation data and conduct a spatial analysis
in order to compare preferences in specific areas with
service offerings available in those areas. This unique
analysis, when combined with the companys consolidated
data and the right location-based functionality, would allow
the firm to deploy services over an intranet or combine
them into existing operational systems, thereby enabling
the company to make profit-enhancing decisions in a
more cost-effective and efficient way.
IN THE PUBLIC SECTOR, government agencies are
increasingly pressured to perform even while budgets
for most functions are stretched more thinly than
ever before. Location intelligence can assist these
organizations by enabling:

Attracting, retaining, and supporting local businesses

in order to create jobs and strengthen the local tax base
Planning and development of large-scale public works
projects

Ultimately, location ties all of the

other datapoints in an organizations
operation together
7

Evaluating the need for and effectiveness of federal aid

resources in human services, economic development,
agriculture, and other fields.
Enhancing disaster forecasting and emergency
preparedness and recovery operations
Improving predictive capabilities for national and
homeland security functions
EVEN ON THE GEOGRAPHY-LESS INTERNET, many e-tailors
have discoveredcontrary to original expectationsthat
some of their best customers live in less wealthy small
towns and rural areas, where physical store offerings are
more limited. Additional insights that location intelligence
solutions can offer include:

The optimal matching of product mixes across

geographical locations and customer groups
Optimization and timing of free shipping and other
incentive offers
The effect of time-of-day and time-of-week on purchase
patterns in different geographies and across various
demographics
The optimal timing and pricing of Internet advertising,
such as search engine keyword buys and banner
advertisements
No business would go to market without trying to gain a
rich understanding of its customers. The same is true with
regard to evaluations of production, distribution, and other
logistical matters, each of which can have significant effects
on profitability. But historically, the analysis of location
data has been siloed within administrative departments
or other nonrevenue sectors of a company, or else have
been given only notional, gut instinct, location-inference
consideration. But no longer. A growing contingent of
organizations are learning that, not only does location
matter, but that fully appreciating the impact and
opportunities associated with location can generate
significant, bottom-line returns.
And the best news is: implementation of these beneficial
solutions is easier and much more affordable than one
might expect.

Profiting from Location Intelligence

Ultimately, location ties all of the other datapoints in an
organizations operations together. To use a very simplistic
example, knowing a customers age, family status, and
buying history can inform, say, a sporting goods retailers
marketing efforts. But knowing further that the customer
lives in Colorado Springs instead of, say, Miami or Dallas
suggests that the customer might be a good candidate for
buying ski gear or high-performance parkaseven if the
customer in question has never purchased such items
from the company in the past.
Similarly, basic mapping data can tell an insurance
provider where its policies are located in relation to
a flood zone or other high-risk areas. But only with a
richer set of location-specific data could the provider
automatically and accurately determine a policy applicants
exact distance from a coastline or waterway, the overall
risk exposure, and the optimal deductibleresulting in
improved underwriting, customer service, and claims
management practices.
These and many comparable examples confirm that
location intelligence is just what it appears to be:
invaluable organizational intelligence, drawn from both
the organizations and customers locations that can
enhance the understanding of the organizations operating
environment, and so be used to increase revenues, reduce
costs, and improve profits. It is the same kind of value
that CRM-style analytical solutions began bringing to
customer-facing organizations a decade before.
And like those customer intelligence solutions, which
depended heavily on advanced information technologies
for their analytical and data-management power, so too
are location intelligence solutions now being powered,
not by gut instinct and consensus guessing, but by
advanced analytical and data-processing tools that can
detect patterns, risks, and opportunities that otherwise
would be invisible to human eyeball analysis.
It was in an effort to understand these opportunities
and, more specifically, to gauge the role that technology
can play in delivering powerful, business-relevant location
intelligence to todays visionary organizationsthat
BusinessWeek, the worlds leading business magazine,
and MapInfo, the leader in location intelligence solutions,
undertook the current survey.

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business

M A S T E R C A R D , W H I C H H A D L O N G O P E R AT E D S E P A R AT E D ATA B A S E S Y S T E M S T O

support its phone- and web-based locator services for the companys more than 900,000 ATMs around
the world, was spending some $400,000 each year in order to maintain the dual legacy systems.
By implementing a unified location intelligence solution, MasterCard was able not only to eliminate
these costs, but also to provide superior service to its tens of millions of customers. Overall, the new
ATM locator generated a return on investment estimated at some 1,152% within the first six months.

Acquiring Technology
As the above section makes clear, location-based decisions
are becoming increasingly important for a wide variety
of both commercial and public sector organizations.
The section also suggests that technology-based solutions
may be a valuable means of supplying executive decisionmakers with the operational intelligence needed to make
prudent choices in this regard.
Determining how to best take advantage of this
opportunity, however, requires more than just these
general observations. MapInfo therefore joined with
BusinessWeek during the summer of 2005 to design a
sophisticated methodology and questionnaire that would
allow the two companies to compile the benchmark
research necessary to support the widespread deployment
and usage of modern location intelligence tools.
Survey Design & Implementation
Respondents for the survey were obtained from the
BusinessWeek Market Advisory Board database,
an online survey panel consisting of more than 14,000
BusinessWeek magazine subscribers and BusinessWeek
Online registrants. The panelists for the survey were
specially selected to reflect MapInfos primary target
audience. Hence, only panelists who met the following
criteria were asked to participate in the survey:

In addition, researchers over-sampled a number of highly

location-sensitive industries, including retail services,
banking, telecommunications, and the public sector.
A total of 1,700 of these carefully selected BusinessWeek
panelists were invited, via email, to participate in the
online survey in mid summer 2005. A total of 447 surveys
had been completed and submitted, representing a
response rate of 26% and resulting in a margin of error
of +/- 4.6 percentage points. BusinessWeek Research
Services contracted with InsightExpress, an independent
third-party research firm located in Stamford, Conn.,
to manage the data collection and analysis process.
Respondent Profile
The population of respondents to the BusinessWeek
Research Services/MapInfo survey closely matched the
desired profile. About one-fifth of the respondents were
C-level executives, and the remainders were executive vice
presidents, vice presidents, general managers, or public
officials. Some two-fifths of respondents came from very
large organizations having 10,000 or more employees, and
the remainders were equally split among firms with 1,000
to 9,999 employees and those with 500 to 999 employees.

TOP DECISION MAKERS FROM LARGE

C O M PA N I E S S U R V E Y E D

Employed by midsize or large organizations (500+

employees), with gross annual sales of $50 million
or more.
Executives who hold C-level, vice president, general
manager, or government or public official positions.

JOB TITLE
38%

NUMBER OF EMPLOYEES
41%

37%
30%

30%

500
TO
999

1,000
TO
9,999

20%

5%

Individuals who are involved in making technology

decisions for their organization.
CXO

EVP/
VP

GM

GOV/
PUBLIC
OFFICIAL

1,000+

Location-based decisions are becoming

increasingly important for both commercial
and public sector organizations
9

Because of the intentional over-sampling of certain

location-sensitive industries, respondents from these
industries were present in the survey at considerably
greater levels than their actual population in the economy.
Specifically, one-quarter of respondents came from the
retail services industry and another one-quarter from the
telecommunications industry. Other heavily represented
sectors included banking, travel and hospitality,
transportation, and government. More than three-fourths
of respondents were from the United States, with the
remainder roughly evenly split between the United
Kingdom and Australia.
As intended, the majority of respondents played a major
role in operational and technology decision-making
within their organizations. Almost half determined or
managed business improvement and efficiency processes,
and similar proportions were responsible for operational
management, improving customer service, increasing
sales revenue and developing new business, and
developing sales and marketing initiatives. With regard
to their technology duties, more than two-thirds of
respondents were responsible for researching and/or
evaluating technology solutions, and roughly half with
implementing such solutions or changing business
processes as a result of such implementations.
Technology Acquisition Patterns
The survey began by looking at the most basic question:
how did respondents view their organizations perspective,
or sentiment, toward information technology (IT)
investments, and how did they acquire these solutions.
The responses were typical of what one who is familiar
with corporate IT operations might expect.
Specifically, fewer than one-fifth of respondents said
that their organization purchased predominantly
cutting-edge technology applications. Qualitative
research, not conducted as part of this survey, suggests
an explanation for this behavior: many organizations
believe that cutting-edge technology is not yet fully stable,
and so poses more risks than benefits for the organization.
For that reason, these organizations often prefer more
mature, if somewhat less powerful, technology, and
the survey appears to bear out this hypothesis. Nearly
half of respondents said that their organizations buy
moderately good and sophisticated applications, but
that they are sure there are better ones on the market.
A minority said that they either bought only average
applications or developed solutions in-house.

TOP DECISION MAKERS FROM LARGE

C O M PA N I E S S U R V E Y E D

We predominantly buy cutting edge applications

18%

We buy moderately good and sophisticated applications,

but Im sure there are better ones on the market
48%

We buy average applications that are comparable to

industry standards
18%

We buy outdated applications that are below industry

standards to save money
3%

We tend to develop our own in-house solutions

11%

We rarely invest in technology

2%

Predictably, these technology acquisition patterns

vary significantly according to both industry sector and
views on the importance of technology, although the
differences are not necessarily in the direction that one
might expect. For instance, fully 27% of companies in
the service-oriented travel, transportation, and hospitality
sector reported that they always bought cutting-edge
technology, while just 15% of firms in the data-intensive
banking and related sectors indicated that they did so.
Despite the heavily technology-dependent nature of
their firms, only 17% of telecommunications industry,
executives said that their organizations usually purchased
cutting-edge technology.
Significantly, however, regardless of industry, firms
that viewed technology solutions as critical to their
organizations operations and financial success were
almost three times as likely to buy cutting-edge
technology as were firms that viewed these solutions
as merely useful.

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business

10

TA P C O , A M A J O R I N S U R A N C E U N D E R W R I T E R I N H U R R I C A N E - P R O N E N O R T H C A R O L I N A ,

for years had employed manual methods to calculate distance-to-the-coast, a key variable for determining
risk exposure. After deploying a location intelligence solution, the company was able to fully automate
the process, not only significantly reducing staff time, but also improving the quality and reliability
of its risk measures.

A couple of important insights emerge from this

initial analysis. First, large organizations tend to be
cautious when investing in technology of any type,
preferring mature or well- established solutions over
more cutting-edge technologies, even if the latter
offers greater operational or other business benefits.
However, once firms come to realize that more robust
technology solutions are critical to their business
operations, revenues, and profitability, they become
considerably more likely to invest in advanced,
cutting-edge technology.

The Technology Gap

As noted, these findings suggest that most large
organizationseven in some technology-intensive
sectors like telecommunicationshold moderate views
with regard to technology as an enabler of organizational
decision-making. However, the BusinessWeek Research
Services survey reveals that the relationship between
technology intent and acquisition patterns is actually
much more complex
Perception Versus Action
One significant finding stands out clearly from the
survey: the majority of respondent organizations believe
that technology-enabled solutions are vital to the quality
of their business decision-making. This point cannot
be overstated. Their spending patterns and caution
notwithstanding, the majority of companies in the
survey are strong believers in the power and benefits
of technology.
Specifically:
Fully 13% of respondents said that technology was
critical to their organizations, and another 39%
claimed that it was very usefula total of 51%.

By contrast, just 39% said that technology was merely

useful to their organizations, and another 5% said
that it was not usefula total of 44%.
These responses speak to the surveyed organizations
intent. Their actual behavior, however, is markedly
different. Despite the fact that 51% of organizations say
that technology-enabled solutions are either critical or
very useful, only half this proportion (26%) reported
that they actually used sophisticated software applications
and analytical reporting tools to assist in making business decisions. Another 40% indicated that they use
some reporting tools, but noted that these tools lacked
real analysis engines, while 30% depended mainly
on consensus and committee when making important
decisions and 4% said that they made important
decisions based on gut feel.
Hence, there exists a very profound technology gap
between stated intent and perception on the one
hand and actual technology acquisition and usage
behavior on the other. Specifically, about half of the
organizations that said that technology was extremely
important to their business decision-making did not
actually follow through on this belief and invest in
sophisticated technology.
It is worth noting, however, that this technology
gap does not exist in reverse: those organizations that
do invest in cutting-edge decision-making technology
are almost always among those that also place high
importance on such technology.
In other words, technology purchasers are highly likely
to be strong technology believers. Overall, more
than four-fifths of respondents whose companies use
sophisticated tools to make business decisions said that
technology was either critical or very useful to their
organizations, compared to fewer than one-tenth of
companies that use only some tools and or that primarily
depend upon consensus-based decision-making.

51% of organizations say that

technology-enabled solutions are
either critical or very useful
11

And some of respondents indicated that finding the

budget to fund implementation, training end-users
on how to employ the new application, and having
confidence in the applications living up to colleagues
expectations were serious challenges.

PERCEPTION VS. REALITY

(Perception) How important are technology-enabled

solutions when making important business decisions
Critical

13%

Very useful

38%

Useful

39%

Not at all useful

5%

We dont have or use any analytic

reporting tools

3%

We dont have or use any

technology-enabled solutions

2%

(Reality) How important business decisions are made

We use sophisticated software applications
& analytic reporting tools

26%

We use some reporting tools but they lack

real analysis engines

40%

We depend mainly on consensus &

committee when making important decisions

30%

We make important decisions based on gut feel

4%

Probing the Technology Gap

Why does this technology gap exist? Why do so many
sophisticated and well-managed organizations say that
advanced technology is critical to their decision-making
and operational processes, and yet these same institutions
fail to invest in the technologies most suited to these
tasks? The BusinessWeek/MapInfo survey sheds
considerable light on these questions.
As it turns out, most organizations experience a variety
of both practical and perceptual challenges in
implementing more advanced technologies. For instance:
Respondents in nearly four-fifths of the surveyed
organizations replied that integrating the application
with multiple databases and platforms was either
very or extremely challenging.
Some three-fourths of respondents said that adapting
existing business processes to utilize the new
capability and getting corporate culture to see the
benefits of the new application or solutions were
significant challenges.

It is noteworthy that there were only small differences

in the perception of these challenges among respondents
from organizations that viewed technology-enabled
solutions as critical versus those that regarded such
solutions as merely useful. The same was true
in comparing the responses of individuals from
organizations that actually used cutting-edge applications
to those of executives from organizations that employed
only moderately good applications and those that used
only average technologies: the perceptions of the various
challenges did not vary markedly among these groups.
These results suggest that most organizations perceive
significant challenges in implementing advanced
technologies, but that those organizations that are
truly committed to such technologies and those that
have actually implemented them nevertheless manage
both to see the benefits of such technology and to
actually deploy it, in spite of considerable operational
and attitudinal challenges that they face within
their organizations.
Closing the Technology Gap
Organizations that are considering whether or not to
implement advanced technology solutions as a means
of enhancing their business decision-making appear to
accept the fact that many of the challenges that they
face in doing so originate from internal practices and
operational structures. Still, these firms also strongly
believe that their technology vendors could help them
to overcome these challenges in a number of ways.
Most notably, a resounding 94% of respondents said that
it was either extremely or very important to have a vendor
that understands the needs of my business. Equally
high percentages declared that it was either extremely
or very important for vendors to:
Deliver easy-to-implement and easy-to-use technology
solutions;
Have a proven track record in supplying reliable and
scalable solutions; and
Provide technology solutions that help their organizations
to save money.

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business

12

EAGLE-TRIBUNE PUBLISHING, A PULITZER PRIZE-WINNING NEWSPAPER SERVING

more than 100,000 households north of Boston, had suspected that its readership base was changing
dramatically, but only after adopting a location intelligence solution was the publisher able to confirm this
suspicionand to lay the foundation for acquiring new and potentially lucrative long-term customers.

Other important factors were the ability to customize

solutions and a commitment to being proactive in
serving clients. On the other hand, factors such as being
standards-based, offering a complete range of technology
solutions, and being a market leader were viewed as
less important in helping respondent organizations to
surmount technology implementation challenges.
The bottom line: larger organizations of all kinds tend to
perceive serious challenges in implementing advanced
technology. Many such organizationsnamely, those
that have actually put these solutions in placeappear
to possess the internal knowledge, resources, and
determination to overcome these challenges. But other
companies, equally inclined to favor advanced technology
solutions, are evidently less able to master these challenges
on their own. But the survey indicates that these
organizations may be able to overcome the technologys
inherent challenges, and thereby move into the ranks
of advanced technology purchasers and users, with the
provision of appropriate assistance, advice, and education
by their solution providers.

Benefitting From Location Intelligence

The preceding section documented that a large
proportion of respondent organizations see value in
advanced technology solutions even if they are cautious
in pursuing implementation and even if only a minority
have actually done so. An unstated assumption in that
analysis was the supposition that these organizations
are actually aware of the various technologies that are
available to assist in meeting their needs. Given the
extensive commitment to technology as expressed
in the survey, one would expect there to be, in fact,
a considerable depth of familiarity with enterprise-level
business applicationsand, indeed, there is.

Technology Mindshare
Among respondents, a large majority said that they
were familiar with a variety of high-profile business
applications. Leading the list was customer relationship
management (CRM) software, with which more than
four-fifths of respondents were familiar. Approximately
two-thirds of interviewees were also familiar with
enterprise resource planning (ERP) software, supply
chain management (SCM) software, and business
intelligence (BI) software. Other applications were even
less well-known. Most notably, only about one-third
of respondents were familiar with location intelligence
software, with fewer than one in ten saying that they
were very familiar with this class of software.
Organizations that viewed technology-enabled business
solutions as very critical were only slightly more likely
than those regarding such solutions as merely useful
to be familiar with location intelligence software.
But there were marked differences across industries,
with almost half of respondents from the retail sector
claiming familiarity, along with more than one-third of
responding travel sector and government executives. But
fewer than one fourth of respondents from the telecommunications, banking, financial services, and energy and
utilities sectors said that they were familiar with location
intelligence software.
Technology Investments
These awareness patterns were generally reflectedand,
in some cases, even accentuatedwhen survey panelists
were asked whether their organizations had actually
installed the applications in question.
More than half of respondents said that their organizations
were currently using CRM software, with large minorities
also using ERP and SCM software. About one-third had
installed business intelligence solutions. By contrast, a
mere 6% had installed location intelligence software.

Awareness (of location intelligence)

is beginning to solidify, and is poised
for significant growth
13

A P P L I C AT I O N S I N S TA L L E D

Customer Relationship Management (CRM)

52%

Enterprise Resource Planning (ERP)

41%

Supply Chain Management

37%

Business Intelligence
30%

Business Performance Management (BPM)

27%

Customer Analytics
21%

Geographic Information System (GIS)

20%

Corporate Performance Management (CPM)

20%

Enterprise Performance Management (EPM)

19%

OLAP analysis (i.e. online analytical processing)

18%

Location Intelligenc
6%

Among respondents whose organizations were not yet

using the applications in question, the high-profile
solutions also garnered significant interest. For instance,
more than half of respondents were either currently
evaluating CRM software or were planning to do so within
the next year. Just under half of interviewees expressed the
same viewpoint on ERP, SCM, and business intelligence
solutions. Again in contrast, only 7% of interviewees said
that they were currently evaluating location intelligence
software, and another 21% were planning to consider
it within the next year. One likely reason for these
differences in evaluation tendencies: fully one-fifth of
respondents considered CRM software to be the most
critical software tool in their analytical arsenal, with about
one-tenth feeling the same way about ERP and business
intelligence software. However, only 1% felt that way about
location intelligence solutions.

Not surprisingly, the most well-known technology brand

names were also regarded as the most relevant technology
partners. Microsoft led the list, with three-fourths of
respondents saying that the Redmond, Wash., company
was one of their top two most relevant technology partners.
IBM and Oracle were similarly ranked by more than half
of the respondents. Other vendors like SAP, Peoplesoft,
and Siebel ranked in the middle ranges of relevance,
while business intelligence vendors like Business Objects,
Cognos, and SAS were considered to be among the most
relevant partners by fewer than one-fourth of respondents.
Probing the Location Intelligence Gap
These findings indicate that, like the previously mentioned
technology gap, there also exists a significant location
intelligence gap among respondent organizations.
Specifically, surveyed companies express a strong interest
in acquiring the benefits that location intelligence
software provides. For instance:
Fully three-quarters of respondents said that it was either
extremely or very important that their organizations
have the ability to improve business performance.
More than two-thirds of interviewees said that it was
important for their organizations to have the ability to
evaluate market potential and opportunities, to optimize
resources, and to spot geographic trends.
Nearly three-fifths of respondents said that it was
important for their organizations to have the ability
to select sites and close underperforming sites.
Despite this significant interest in the benefits of location
intelligence software, actual implementation and
investigation of this class of software has lagged behind.
A key reason for this location intelligence gap appears
to be that technology-inclined organizations are just now
becoming aware of location intelligence solutions in
general and of individual location intelligence software
offerings in particular. But the survey also indicated that
this awareness is beginning to solidify, and is poised for
significant growth in the years ahead. Specifically:
More than two-thirds of respondents correctly identified
demographic analysis as a key feature of location
intelligence software, and just under two-thirds
accurately described location intelligence solutions
as aiding in site selection and planning.

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

A BUSINESS WEEK RESEARCH SERVICES WHITEPAPER

Location Intelligence:
The New Geography of Business

14

I H O P , T H E 1 , 2 0 0 - U N I T R E S TA U R A N T C H A I N , W A S A C C U S T O M E D T O M A K I N G L O C AT I O N

decisions based on limited and often fragmented information while failing to capture a variety of highly
influential real world data. With the implementation of a sophisticated location intelligence solution,
however, the restaurant chain was able, for the first time, to efficiently analyze data from more than
60,000 customers at 100 locations, providing a much richer view of the effect of restaurants locations
on revenues and profitability.

More than half of respondents correctly noted that location intelligence software could aid in market potential
analysis, customer analysis, and sales forecasting.
Significant minorities viewed insightful decisionmaking as one of location intelligence softwares
prime capabilities.
Thus, just as implementation assistance and support
promise to help overcome the technology gap, increased
understanding of location intelligence technology and its
capabilities and benefits is likely to significantly reduce the
location intelligence gap. Most surveyed organizations
already desire the benefits that location intelligence
solutions provide: they do not need to be persuaded that
these capabilities are useful to their organizations. Thus,
as they become more aware both of location intelligence
technology itself and its ability to deliver on these benefits,
substantial proportions of these organizations are likely to
both investigate and adopt location intelligence locations
as a key component of their technology portfolio.
In this sense, location intelligence software is in much
the same position that CRM, SCM, and business
intelligence software occupied at a similar point in their
development and implementation lifecycles. These other
solutions once were much less well-known than they are
today, and so were considerably less widely adopted than
is now the case. Their growing popularity and familiarity
within large organizations over the past decade has led to
sharply increased implementation rates. The same
dynamic is likely to take place with location intelligence
software: as commercial and government organizations
become more familiar with the significant operational
and other benefits offered by enhanced location
intelligence, adoption of this class of technology is
likely to grow substantially in the coming years.

Realizing the Benefits of Location Intelligence

This potential, in fact, is already being realized. As
the benefits of analyzing and deploying location-based
information have become more well-known, a growing
number of organizations have begun to take advantage
of these capabilities. Indeed, if one looks at the software
installations of Global 2000 corporations, nearly all
possess some form of geographic analysis software.
And within industries in which location is a particularly
critical factor, like retail, telecommunications, and
government agencies, hundreds if not thousands
of employees make frequent use of these powerful
systems. And as they do, they and their organizations
are beginning to realize some very impressive benefits.
The Growing Benefits of Location Intelligence
As these examples dramatically illustrate, the benefits
of location intelligence are real, and they are awaiting
application by decision-makers in a wide variety of
corporate and government organizations. These benefits,
in short, are an undiscovered gold minea gold mine
of immensely valuable, business-relevant data ready for
exploitation and use. Already, as BusinessWeek/MapInfo
survey demonstrates, an understanding of the capabilities
and value of location intelligence is penetrating the
upper ranks of the worlds leading organizations. But
there is much more to come. In the near-term, location
intelligence solutions are poised to become a must-have
technology in a growing number of visionary organizations that are committed to increased growth, efficiency,
and profitability.

Most surveyed organizations already

desire the benefits that location
intelligence solutions provide
15

CONDUCTED BY BUSINESS WEEK RESEARCH SERVICES SPONSORED BY MAPINFO COPYRIGHT 2006 BUSINESSWEEK RESEARCH SERVICES. ALL RIGHTS RESERVED. PROPRIETARY & CONFIDENTIAL.

Corporate Headquarters

MapInfo Canada

Europe/United Kingdom Office

Asia Pacific/Australia Office

One Global View

Troy, NY 12180-8399

26 Wellington Street East

Suite 500
Toronto, Ontario
M5E 1S2

Minton Place
Victoria Street
Windsor, Berkshire SL4 1EG

Level 4
170 Pacific Highway
Greenwich, Sydney
NSW 2065

main: 518.285.6000
1.800.327.8627
fax: 518.285.6060
[email protected]
www.mapinfo.com

main: 416.594.5200
fax: 416.594.5201
[email protected]
www.mapinfo.ca

main: 44.1753.848200
fax: 44.1753.621140
[email protected]
www.mapinfo.co.uk

main: 61.2.9437.6255
fax: 61.2.9439.1773
[email protected]
www.mapinfo.com.au

2006 MapInfo Corporation. All rights reserved.

MapInfo and the MapInfo Meridian symbol are trademarks of MapInfo Corporation and/or its affiliates.
All content is 2006 by BusinessWeek Research Services, BusinessWeek Research Services is solely responsible for all content in this report.
All other product and service names mentioned herein are trademarks of their respective owners.

91931-606