Consider Chevron, the oil and gas giant. It hires boats from private operators to move goods among its oil platforms in the Gulf of Mexico. The boats have GPS tracking capability, but Chevron hadn't fully used that data until this past year, when it began collecting location information, feeding it into analytics software, and giving a Chevron team in a control room the authority to direct those boats. The result is "tens of millions" of dollars saved, says CIO Louis Ehrlich, thanks to more efficient routing that cuts the number of hours and miles the boats travel.
This past year, for example, Ford's IT team worked with a group of college students to develop in-car applications, using its new Fiesta compact as the development platform. Location data played a key part in several of the prototypes, including one that would let people share their locations with other vehicles traveling in a caravan somewhere. While that particular app may seem to be lightweight compared with saving tens of millions of dollars, the point is that IT organizations can influence whether companies embed location data in their products.
Search, too, promises to get more location-driven. Yelp, a booming site on which anyone can review a local business, lets users search for specific goods and services using a ZIP code--"sushi 10023"--or, from a mobile device, using their actual location. Given the growth of sites such as Yelp, and knowing that Google did $1 billion in search ads over mobile devices last quarter, it's no surprise that Marissa Mayer, the Google VP formerly in charge of search, just took over Google's nascent location and local services business.
One huge point of change here is mobile phones with built-in GPS. At the start of 2009, just over half of phones shipped with GPS; by the end of next year, 80% will, predicts market researcher iSuppli. That makes it practical for companies to get location data from their employees without investing in proprietary devices like UPS or FedEx drivers use, and it lets customers bring location data to their Web interactions. Only recently, though, have application developers started to tie services to this location information, giving consumers a reason to share their location.
Location data is helping improve operations, whether in government, retail, farming, or manufacturing. But as with many enabling technologies, IT is just one part of the two-part epoxy. IT must provide appropriate infrastructure and guidance to business units. It must provide an understanding of the various sources of location-based data and the core technologies, including geospatial information systems (GIS) and location-based Web services. Marketing, product development, operations, or some other business unit is the other part of that mix.
Where The Data Comes From
To get a sense of what's possible, it's worthwhile to review where location-based data comes from: both government and telecom providers. Phone switches have address location information for wired phone devices that shows up when you dial 911. Geolocation of IP addresses, which used to be somewhat difficult, has become easier now that private geolocation data providers have worked with ISPs to collect this information.
More recently, given the increase in wireless phone subscribers, the FCC has mandated enhanced 911 functionality for wireless carriers, which seeks to provide more accurate location information both to the carrier (so that it can route the 911 call to the nearest call center) and for the 911 call center (so that it can tell the emergency responder where to go). By 2012, carriers will be required to provide even more precise latitude and longitude. Techniques using tower triangulation have been developed to locate phones that don't have GPS units installed. It's not as accurate as GPS, but it's often good enough.
Location information, which comes through as X, Y, and Z coordinates, is useless if you don't have accurate context information about that set of coordinates. That's where geospatial information systems come in. Most geospatial data originates with local metropolitan or county planning boards, and it's used for purposes ranging from tax collection to sanitation routes to dispatching vehicles for accurate 911 response.
But GIS, unlike the domain name service that powers the Internet or telephone system, isn't universally federated--that is, not all GIS systems can talk to one another or even refer inquiries or lookups to the authoritative source of information. So third parties have popped up to act as clearinghouses of geospatial data.
The most ubiquitous of these is Google, through Google Maps. But it's by no means the only source of comprehensive data or tools. The point is, when you start locating your customers with any type of coordinate system, you need geospatial data if you want to do anything with the point of reference.
Finally, just as the $99 GPS-enabled phone represents the commoditization of location tracking, GIS software, data, and services have been held to the fire of commoditization as well. Companies can enter the market with nothing more than elbow grease and open source software, or relatively inexpensively with commercial or cloud-based offerings.
For example, Gaia GPS is a location-based app for outdoor enthusiasts, which takes advantage of several free data sources including OpenStreetMap and MyTopo. Similarily, an IT organization could get value out of this data. With a small investment in integration and some custom development, a door-to-door retailer, for instance, can leverage this data to build a mobile GPS-enabled app to track success rates in different neighborhoods.
The Enterprise App Connection
While it may be good for a few laughs around the office to know that Gigi checked in at Jack's Celtic Tavern right after work, that's not the kind of business benefit companies are looking for. A location-based app is only interesting in the way that it connects to customers or systems.
There are three main types of location-based services: conventional geospatial services related to fixed locations, on-premises systems, and mobile device location services.
Conventional geospatial analysis is proven to solve significant business problems and increase innovation. Farmers, for example, use GPS data on their fields to control application of pesticides, nitrogen, and fertilizer. In areas like California where water's scarce, GPS-coded center-pivoting sprinkler systems can stop spraying when they pass over a path through a field, for example.
BECU, formerly Boeing Employee Credit Union, used location data to figure out where to place 10 new branches in Washington based on actual drive times and traffic patterns, rather than the old pins-on-a-map approach to analyzing rival locations, says BECU market researcher Calvin Bierley.
For fixed location-based services, companies hire third-party geolocation data providers to map fixed IP addresses--home and office PCs, as opposed to smartphones--to a particular spot. There's not a lot of buzz around this area, but that could change as people expect more Web sites to offer location-aware information. Mapping fixed IP addresses to locations can let Web sites offer different ads and promotions to people in different metropolitan service areas, says Marie Alexander, CEO of Quova, a fixed IP service provider that counts Continental Airlines among its customers.
Geolocation can also help fulfill licensing and regulatory requirements and even prevent fraud, says Alexander. If a business sees the same credit card being used in a two-hour period from locations thousands of miles apart, that analysis that can flag a likely fraud, prompting steps such as blocking a transaction. Typically, this type of system uses a third-party location data service that lets in-house systems do lookups and rate the risk level of a transaction.
There also are on-premises systems that use either RFID or Wi-Fi triangulation to track assets within an enterprise. For example, some hospitals use premises location services to track wheelchairs, says Chris Kozup, Cisco's senior manager for mobility. When a patient moves around the hospital for procedures, or new patients move in and other patients out, "time is money, and more importantly, there is a health value of not letting people with a health condition sit around and wait any longer than they have to," Kozup says.
However, it's the truly mobile applications that have kicked Internet location services into high gear. These are the services that receive ubiquitous IP connectivity and triangulation services from 3G, EV-DO, GPS, and, eventually, LTE wireless broadband.
The most obvious high-value application is fleet-tracking technology, which used to be expensive and complicated to do. Companies had to install a GPS device inside a vehicle, interface it with a serial or USB connection to the driver's laptop with the company's software on it, and then use a radio or cellular modem to interface the software to enterprise systems in its data center.
One city we spoke with is piloting inexpensive GPS smartphones on trash trucks to identify where large appliance or brush pickups are needed. Instead of burning gas patrolling neighborhoods for a pickup, drivers who see that a pickup is needed can use a smartphone app from Mobile311 that lets them hit a button that logs a work order with the GPS information. Or if a worker sees a damaged street pole, he can take a photo and attach it to the location-based work order. The city estimates a savings of more than $100,000 annually in gas savings.
Where We Go From Here
Location-based services are only going to grow in importance. Keep track of who the providers are and to what extent open source tools might make sense for you.
If you're giving employees GPS-enabled mobile devices, picking the right platform to play with matters. If you have a significant installed base of BlackBerrys, so be it--go ahead and tinker. But don't ignore Android phones or the iPhone, which have clear market momentum. In-house IT developers at many companies may be more comfortable with a Microsoft framework, but Windows Phone 7 clearly is a riskier platform today than Android or iPhone.
Don't forget to scrutinize company policy, either. Vanguard Group, the mutual fund company, used to have a general IT security policy that, if employees didn't have a specific business need for GPS on their company-issued smartphones, the capability was turned off. Road warriors complained, and Vanguard began allowing broad GPS use this summer.
From an operational standpoint, apart from having to learn lots of APIs to integrate location data and having to get familiar with geospatial technology, the barriers to entry aren't terribly high for IT teams. The geospatial infrastructure is out there, it has been commoditized, and IT departments have a plethora of options for creating and deploying apps. The chief roadblocks seem to be more behavioral and policy-based.
Companies do have to tread carefully with privacy and security. Use your experience with other targeted marketing to know whether customers will be upset if you suddenly offer promotions based on their location. Consider whether that needs to be an opt-in option. Naysayers will say privacy and security concerns will limit adoption--The New York Times ran an article on "cybercasing," where criminals use location-based information to "case the joint." But that didn't keep Foursquare from landing $20 million in fresh venture capital this summer.
So don't let security and privacy stop this discussion cold. People are willing to give up location information in return for convenience and service, even if it's a work-in-progress to know just how much they'll give up. Sure, the thrill of being Foursquare "mayor" of a local bar based on voluminous check-ins seems sure to fade. But don't mistake that fad with the potential of location data to your business.
Jonathan Feldman serves as IT director for a city in North Carolina. Write to us at [email protected].