Emerging Trend of GIS Integration in Key Business Processes


Naresh Raheja
Naresh Raheja
General Manager
RMSI Private Ltd.
A-7, Sector 16, NOIDA (U.P.)
PIN- 201301, INDIA
Naresh.Raheja@rmsi.com

Abstract
GIS provides an opportunity to companies to enhance their processes by making them more efficient. Companies in recent times have started using GIS as a part of their business processes and GIS is increasingly becoming a key component of their overall system architecture. Conceptualizing, designing and implementing GIS-enabled business processes is a new and exciting challenge.
Examples of industries using GIS in their business processes include real estate, insurance, retail, and energy. Real estate companies are increasingly using GIS to improve their decision-making capabilities on important aspects such as site selection and property valuation processes. Insurance companies use GIS as a critical tool in the underwriting workflow systems. The retail industry has started using GIS in their customer management processes and likewise the energy industry is using GIS in their energy related research processes. All these industries need to make location-based decisions in their day-to-day work, and integrating and implementing GIS in their process workflow is a key part of their strategy to improve the effectiveness and the ROI of their systems and processes.

Based on live projects, this paper demonstrates the innovative use of GIS in the key business processes of companies from different industries.

Introduction
The industries using Geographic Information Systems (GIS) data or applications can be broadly categorized into the following categories:
  • GIS industry (Providers of GIS products or services)
  • Industries / sectors that have traditionally used GIS very extensively (example, insurance / risk management companies, companies / agencies dealing with natural resources or environmental aspects / utility companies etc.)
  • Industries, which have been evaluating or have started using GIS in a limited way (example, mortgage and real estate industry, Market research companies or market research departments of various companies, etc.)
The fundamental drivers of using GIS can be significantly different across these categories. In the first category, GIS data or applications are core to the business of the companies, and the survival and growth of the company depend largely depends upon GIS. In the second category, the use of GIS for decision making is established, and often these companies / agencies have significant repository of the GIS data and applications used in the past, this keeps driving the agenda for increased and more meaningful use of GIS. The usage of GIS by companies in the final category poses the maximum challenge, as they are not familiar with the significant potential benefits offered by GIS. In some cases, the business justification for the usage of GIS, particularly in the initial stage, may not be high, and sometimes the initial investment required for this purpose further weakens the business case.

However, there have been many cases of the innovative use of GIS by various companies in this category, which is a very encouraging trend. Many companies have already started using GIS as a part of their business processes. GIS is increasingly becoming part of their overall system architecture, and is being used to refine business processes.

Role of GIS in the ROI Improvement Strategy
GIS provides an opportunity to enhance processes that can benefit from spatial intelligence. These processes become more efficient and enable extracting maximum possible ROI from the company's investment. The process of conceptualizing, designing and implementing GIS-enabled business processes presents a new and exciting challenge. Some examples of the industries using GIS in their business processes, often in an innovative way, include mortgage loan / real estate, insurance, retail, and energy. Real estate companies have been using GIS for improving their decision-making on site selection and property valuation processes. Insurance companies use GIS as a critical tool in the underwriting workflow systems. Retail industry has increasingly started using GIS in their customer management processes. Energy industry has been using GIS in their energy related research processes. All these industries need to make location-based decisions in their day-to-day work, and implementing GIS in their process workflow is key to their strategy to improve their effectiveness and ROI of their systems.

The following factors have facilitated the growth of GIS within these industries:
  • Evaluation of business processes as a part of a full or partial BPR (business process re-engineering)
  • Realization that some of the key processes could benefit significantly through the use of GIS data and applications
  • Improvements in availability of suitable data and technologies for GIS-enablement of the key processes
In all the above cases, the need for integrating GIS in key business processes is driven by one or more business reasons:
  • Higher efficiency and cycle time reduction / cost reduction
  • Improved accuracy of decision making
  • Consistency in decision-making
  • Improved visual appeal and user-friendliness / higher degree of customer satisfaction
The Approach for “GIS-enablement” in Key Business Processes
While analyzing or reengineering business processes, it is realized that many of these processes are centered on the use of geographical data. “GIS-enablement” facilitates efficiency improvement in most of the cases and can also lead to business transformation. This is particularly true if companies have not been using GIS. Market research and appraisal industries are two such examples.

The conventional approach is to analyze the selected business processes and identify the processes where re-engineering can derive the best advantages of GIS. This approach is useful when significant benefits are expected from the usage of GIS or when reengineering is likely to increase the ROI of that process.

While this approach is useful, it is important to learn from analogies based on the successful / failed experiments carried out in other industries to evaluate the potential benefit expected from the usage of GIS in some of the key processes. This approach can be suitable in the cases where it is not possible to justify significant increase in ROI in the early stage of the GIS-enablement of the processes.

Case studies on GIS-enablement of key business processes in two industries will be taken up in the subsequent sections.

Case Study 1: “Best-fit” GIS Integration into Mortgage Loan Processing / Property and Real Estate Industry Workflows

A typical residential property mortgage loan processing workflow comprise the following steps:
  • Identification of prospects and approaching these prospects
  • Loan application
  • Preliminary approval and providing good faith estimates for the loan processing related costs
  • Loan processing / underwriting involves mainly three steps:

    • - Title Search: Check the records for the ownership to the property and whether there are any other claims against that property;
    - Appraisal: Estimate the property valuation based on different factors using a combination of automated / manual processes;
    - Flood / Other Natural Hazards Assessment: Check whether the property is located in a natural hazard risk zone and whether catastrophic insurance is required. This step often involves a credit history check
  • Final loan review and closing of the loan
  • Loan servicing (often done by another department / company)
Some parts of this workflow overlap with the workflows of the real estate (appraisal / property evaluation) and insurance industry (catastrophic risk assessment and insurance).

RMSI has worked with one of the worlds leading mortgage loan servicing firm for reengineering and automating a major portion of their flood risk assessment processes. It involved a combination of GIS data creation, GIS application development / enhancement, and implementation of a business process for effective decision making in difficult cases. Integrating GIS in their key processes involved expertise in business process analysis, GIS data and applications. “GIS-enabled” processes are now well integrated into the overall mortgage servicing workflow.

Business benefits for the client included cost reduction, increased efficiency, and leveraging of GIS technology and skilled GIS resources to implement innovative GIS-enabled processes in the overall workflow.

Location is a key factor for property mortgage loan / real estate / insurance industries and an effective usage of GIS applications is often a part of the overall business process analysis and reengineering to optimize and streamline the workflows.

Case Study 2: Leveraging GIS-enabled Processes into the Market Research Analytics

Market research companies or market research departments of various companies carry out market research through surveys and statistical analysis. There can be many different purposes for this market research. For example, it could be needed for customer trend analysis leading to an internal strategy for new customer acquisition by companies in the retail industry, or the results could be “productized” for selling to various industries (for example, there are many firms specializing in market research for construction, energy, or publishing industry).

In many cases, location is crucial for this research. For example, the energy industry market research needs to assess the “sources” and “sinks” of the energy, besides the other, related attributes (demand, supply, pricing etc.). A retail company’s market research department needs to analyze the location of various retail outlets as well as the locations of the customers served by these outlets. In all these cases, the processes involving tracking the spatial as well as temporal information can be facilitated by the usage of GIS applications. The market research workflows can be different, depending upon the objectives and scope of the research process. However; in general, it involves the following steps:
  • Problem identification / hypotheses development
  • Description of objectives and preliminary methodology
  • Development of questionnaires / templates for data
  • Collection of associated data for research from various sources (field data collection, literature surveys, secondary data and information collection, including location information and maps, as applicable). It also involves spatial data creation for some cases
  • Finalization of the GIS-based methodology
  • Processing of the data
  • Data analysis: spatial and temporal
  • Recommendations / productization of the research


    • Often the following spatial elements are involved in the process:
  • Location of the business outlets, sources / sinks of the material / information
  • Location of the existing and prospective customers (data needs to be created and updated on regular basis)
  • Other related ‘layers’ of information – demographics, housing / other projects density, hazardous zones etc.
The overall workflow in the market research industry / departments comprises many processes. Location plays a very important role in some key processes that includes designing of methodology and data analysis etc.

RMSI has worked with a leading company dealing in research and analytics for the energy industry, as well as a company in the retail business for optimization of their existing GIS-enabled processes and implementation of the reengineering applications. This process was iterative as the key learning’s from each step were used in improving the next planned step. Also, these processes had to be well integrated into their overall workflow. Some of the changes in the processes started as ‘experiments’, this integration was not very good. However, a well thought business process reengineering strategy in phases had to be considered while integrating these aspects.

Business benefits for the client included a better visualization of the location related aspects of existing customers and prospects, and spatial / temporal analysis of the trends leading to improvement in customer acquisition and retention, and a more realistic and successful marketing and sales strategy.

Conclusion
There has been an emerging trend in GIS for becoming part of the overall system architecture of new companies. In these cases, the usage of GIS data and applications has been providing an opportunity to enhance some of their key processes that can benefit from spatial intelligence. Integration of GIS-enablement makes processes more efficient and enables extracting of maximum possible ROI from company's investments. The process of conceptualizing, designing and implementing GIS-enabled business processes is increasingly becoming a part of the overall business process reengineering in many industries, particularly in the property mortgage loan and analytical market research industries.