Ashish Kothari

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Applications in the Governmental Sector

GIS applications are increasingly being deployed within the Department of Defense agencies as critical decision-support tools that increase the level of situational awareness by providing visual representation of geo-coded data. GIS applications integrate spatial with other defense related data, enabling the analyst or commander to consider geography and terrain in all decisions. GIS applications in defense include but are not limited to defense mapping, terrain visualization, intelligence preparation of the battleground, especially, routing and logistics analysis, mission planning and threat analysis. As the figure below demonstrates, by interlacing road layout data, data on residential and commercial buildings, positions of hostiles, commanders can use GIS to optimize the route on a series of parameters from time, safety, etc. Military logistics also benefit from next-generation GIS approaches—for example, as supply officers apply GIS to track supplies and equipment and pinpoint them once they arrive. Travel is mapped over a given route, with the initial position indicated; as goods move, they are monitored, with reports made and positions indicated and entered in the GIS throughout transit.

An Application of GIS for Route Planning

Another governmental example is offered by the Montana Department of Environment Quality, which uses a GIS-based watershed data management system to tackle its water resource management issues. This system helps the department integrate extensive and diverse data into one system, covering demographic, land use/land cover, infrastructure, and environmental and natural resource information. It supports customized queries for analyzing conditions and trends at various scales, identifying relationships within a specified geographic area, and evaluating actual and potential impacts from existing or planned actions.

A GIS-based watershed data management system

Distilling the GIS Marketplace

A study by Daratech concluded that GIS software sales drove approximately $7.7 billion in total user spending for software, services and hardware in 2001. The components of this $7.7 billion spend were as follows:

To better understand the role and import of f these, it is useful to examine the composition of each in detail:

• GIS Core Business - Consists of the combined sales of a core group of 42 GIS companies including their worldwide hardware, software, services and data revenues. GIS Core business revenues were valued at $1.6 billion in 2001.

• Hardware Drag- Consists of sales of all hardware (such as computers, digitizers, plotters etc) sold to GIS end users by hardware manufacturers and resellers. It also includes sales of related system software that users must purchase to operate their GIS systems.

• Reseller Business - Consists of retail sales of GIS hardware, software, and services by both retail remarketers and value-added resellers.

• Service Drag– Consists of sales of all services (such as systems consulting, systems integration, packaged data, data collection and conversion) delivered to GIS end-users by service providers that are not members of the core business group, and of in-house service expenditures by end-users. This includes implementation services accounting for $3.5 - $4 billion; expenditure of purchased data, which accounts for approximately $500 million; expenditure on database development for approximately $200 million; and in house implementation services costs (includes customization, maintenance of old, internal add-ons, internal training for new users) accounting for about $500 million.

Companies Offering GIS Solutions to the Marketplace

ESRI, Intergraph and GE Network Solutions are the top three companies in the GIS marketplace. In addition to these market leaders, Autodesk, Leica and Mapinfo are rapidly gaining market share, thus posing a threat to incumbents.

ESRI

Recognized as the pioneer of the industry, ESRI is the market leader with over one-third of all GIS software revenue. It has over one million seats of its technology installed worldwide in a wide range of industry markets including: federal, state and local governments; earth resources; electric, water and gas utilities; oil and gas exploration and production; education; and marketing and sales. The company is headed by Jack Dangermond, considered by many to be the father of GIS.

Intergraph

Intergraph, the second-largest GIS software provider, is one of the industry's longest-established providers. It has a number of vertical business units that provide significant GIS and related solutions and services. One of these, called Mapping and GIS Solutions, provides geospatial solutions to government, commercial and international markets. Another Intergraph business unit, Utilities and Communications, provides information systems for managing geospatial resources that deliver goods and services to consumers.

GE Network Solutions

The third-largest industry participant based on software revenues, GE Network Solutions creates, markets and delivers network design and management software products to the utility, communication and public systems sectors globally. The company's success in GIS is founded on its well-regarded Smallworld solutions for spatial resource planning. By helping organizations understand where and how their facilities and customers are located, the company provides enterprise-wide support for its customers' essential business processes.

Autodesk

Over the past few years, Autodesk, also a major participant, has built an impressive presence in the GIS industry. It offers a broad, powerful family of products that span customer organizations from field offices to back offices with enterprise, desktop, Internet and mobile applications. With end-to-end single-vendor solutions for mapping, GIS, civil engineering and infrastructure management, Autodesk differentiates itself by providing systems for bringing GIS and CAD professionals together, integrating their data, collaborating on projects, and distributing their digital data.

Leica Geosystems

Leica Geosystems, a major player, is best known for its systems that provide high-accuracy 3D spatial data capture, visualization and modeling. The company's strategy for customers engaged in surveying, engineering, construction, GIS, mapping, industry, defense and other areas is to offer total solutions that provide quality, efficiency and safety.

Mapinfo

MapInfo's success is built on developing, marketing and supporting location-based solutions for the customer relationship management (CRM) market. Intriguingly, MapInfo does not position itself as a GIS solutions provider, but instead as offering solutions that help enterprises gain business advantage by becoming more effective in acquiring, retaining and maximizing the value of their customer relationships.

GIS Marketplace Growth Forecasts

For the 2001 - 2005 period, the outlook for growth remains positive, with forecasts in the 11% range for the world GIS market. Presented below are market growth rate estimates projected by research houses and consulting companies and conclusions concerning trends.

Overall, the statistics suggest that:

• The world-wide GIS market will grow at CAGR of 10.8% (Chesapeake)
• The North American GIS market will grow at CAGR of 13.3% (Chesapeake)
• The North American GIS services segment will grow at CAGR of 17.8% (Chesapeake)
• GIS Data collection and conversion services are estimated to grow at CAGR of 17.8% (Accenture)
• GIS Software/application development will grow at CAGR of 20-25%. (Accenture)

The Business Case for Implementing GIS for Your Business

Investments in GIS systems are complicated. The initial costs are very high, and the tangible benefits can take years to materialize. Business managers should take a rigorous financial approach to identifying and quantifying the benefits and costs associated with such an investment. That is, in order to make the case, consideration of all applicable benefits and costs should be undertaken.

Quantifying benefits

While many of the benefits are abstract in nature, managers should try to place a value on these benefits to the best of their abilities. The process should focus on the following:

• Identify potential GIS opportunities. This involves identifying value-added opportunities among the many decisions executives must make at a company. Opportunities can arise not only from utilizing data in a productivity-enhancing fashion, but also from identifying what can be done cheaper, faster and better.

• Identify value drivers the business can impact and quantify them. This seeks to understand the individual value drivers the business can impact to realize each opportunity. A revenue value driver, for example, helps increase revenue by improving such things as store location algorithms, which may be achieved by improving mapping skills and the ability to visually inspect customer traffic and competitor store data. A cost driver—which helps reduce costs--might entail reduction in fuel and time costs as a result of devising better delivery routes for a pizza delivery company. Each of the value drivers should be quantified to the best of the analyst’s ability.

Quantifying costs

Unlike benefits, quantifying costs is much straighter forward. A significant component of the total cost of a GIS project is the start-up costs related to software, hardware, integration and customization. The dominant approach in cost analysis is to divide costs into two categories, implementation and maintenance. Maintenance costs are the ongoing costs incurred by the organization and include regular maintenance of the application, license fees, and salaries of the staff supporting the GIS application. Implementation fees are the one-time fees the organization bears to get the system up and running and is comprised of the following components:

Hardware -

• New servers and desktop machines needed to support the application

Software -

• GIS, operating system, integration software license fees
• Transitional costs (i.e. parallel running of old and new systems),

Data Components -

• Data modeling, data flows analysis and redesign
• Data purchase (e.g., Address Point, Census)
• Data capture, data conversion, data re-survey and validation.

Systems Integration Components and Consultancy Fees -

• hardware integration with pre-existing computing infrastructure
• software integration and interface development between GIS systems and other IT systems.

Evaluation, selection, acquisition and installation of software,

Systems customization,

Contracts Negotiation

Training, human resources planning, skills development and re-skilling,

Project management, Business process re-engineering,

Now More Than Ever

GIS applications have opened a new frontier in technological efficiency and effectiveness by providing the ability to overlay spatial information over existing business data. Combinations are limited only by the kinds of questions you need to answer and the kind of spatial data you have available to answer them. This powerful ability to integrate different kinds of information about a place can lead to better-informed decisions and worlds of opportunities.