Strategy for GIS: The three essential steps to creating enterprise value
Building an effective GIS strategy involves identifying meaningful opportunities, determining their value and setting priorities. Here’s how.
“You can have anything you want – you just can’t have everything you want.”
Strategic planning can be tough. Despite all the different tools and guidance available, devising a strategy that is both visionary and practical can seem intimidating. For most, the work required and the fear of failure outweighs the potential benefits. It's no wonder that when it comes to building a GIS strategy (or a location strategy), a lot of managers avoid the exercise all together.
For some, the problem relates to uncovering meaningful opportunities to use GIS inside their business. For others, it’s about showing clearly where and how these opportunities are delivering business value. Still others struggle with prioritizing opportunities and figuring out where to start.
The reality is that an effective GIS strategy addresses each of these requirements and you have to do a bit of work on all of them. The good news is getting there is easier than it sounds. With a bit of focus and some flexible tools, we can draw a straight line between opportunities, business value and priorities. Let’s look at three steps for incorporating GIS and location into your business and how to get to the heart of what matters.
Step 1: Uncovering opportunities
Simply identifying the ways in which GIS can be used is often one of the more challenging steps in building a strategy. With so many options available in the world of geospatial technology, it can be overwhelming to narrow down the potential solutions. At the same time, understanding the numerous functions that a business performs and then recognizing authentic business needs at an enterprise level can be a Herculean task.
Oftentimes it’s about finding the right “altitude” to conduct strategic planning. If we work at the business strategy level, we can be stuck defining GIS solutions that are too abstract to be practical. If we drill down to the business process level, we risk identifying solutions for areas of business that are constantly changing or don’t address challenges that cut across the organization.
What we need is a structured way of matching up the core capabilities of an enterprise GIS platform with the core capabilities of the business. Fortunately, there’s an effective way to do this. The process involves mapping the core GIS patterns of use to an organization’s business capability model.
The core GIS patterns of use are presented in Exhibit 1. They represent the common geospatial functions that recur across organizations and are supported by most GIS platforms. Consider these patterns the essential “capabilities” of modern GIS and are enabled by a vast ecosystem of geospatial technologies. The patterns of use can be described as follows:
Location Enablement – Discover, use, make and share maps at work – anywhere, anytime
Constituent Engagement – Facilitate and manage communication with stakeholders
Decision Support – Inform executives and management with maps and location intelligence
Field Mobility – Get authoritative information into and out of the field
Analytics – Describe, predict and improve business performance
Location Data Management – Collect and organize location data about assets and resources
Exhibit 1 – The GIS patterns of use
Business capabilities represent the key abilities of an organization; they are an articulation of what an organization must achieve to fulfill its mission as opposed to how it achieves it. In practice, capabilities are comprised of people, process, technology and governance. Because business capabilities are connected to business outcomes, they can be measured for performance. This is key for mapping GIS solutions to the organizational need.
Exhibit 2 illustrates a business capability model for a property and casualty insurance company developed by Enterprise Architects. These companies are in the business of insuring property owners against liabilities and risks related to ownership of property. We’ll use this capability model as an example.
The model breaks down the capabilities of the business into three core areas: Core Value Creating, Operational and Shared. Each capability can be broken down into further sub-capabilities.
For the sake of example, let’s pick up any one capability, such as customer service. Specifically, we’ll look at one particularly important facet of customer service for the insurance industry: Claims Management.
Exhibit 2 – A business capability map for a property and casualty insurance company
In general, claims management involves the management of the intake, investigation, negotiation and settlement of insurance claims. From the beginning of the claim to the final payout, insurance companies spend considerable effort in managing and improving how the claim is handled to ensure a high level of customer service.
Identifying where and how GIS can be used to support this function is a process of mapping the GIS patterns of use to the claims management business capabilities. Exhibit 3 provides an example of this mapping.
Exhibit 3 – Mapping the GIS patterns of use to the claims management capability
Look at all these opportunities! And, these are only some of the possibilities. Let’s look at each capability area in turn.
Claims intake is the ability to manage the notification, assignment and actions relating to an incoming insurance claims. GIS is ideally suited to support this area and just about runs the gamut in terms of the patterns of use.
Opportunities include: maps of claims locations categorized by the event type, allowing the business to manage and expedite claims as an overall event situation; predictive parsing of social media posts to anticipate insurance events and location of impact; forecasting of anticipated claims by event and location; and prediction of losses based on known loss exposure for a given area.
Claims investigation is the ability to investigate and determine the conditions and context associated with a claim. This is typically analytical and human-intensive work. GIS as a platform for location-based analysis and mobility presents numerous opportunities.
Opportunities include: descriptive damage impact assessment maps to show extent and degree of damage; automated submission of claims information to adjusters in the field to expedite the investigation process; predictive models of fraudulent claims based on location patterns; and using unmanned aerial vehicles or UAVs (i.e. drones) to quickly and accurately capture aerial photos and video of damage to building rooftops.
Claims negotiation is the ability to negotiate an outcome that satisfies insurance terms and the interests of the policyholder and policy provider. The negotiation process can be a long, drawn out affair, and GIS can play a role in monitoring and resolving issues related to claims negotiations.
Opportunities include: outstanding claims dashboards used by managers to monitor where claims are hung up in the negotiation process and where there are observable trends based on location or event type.
Claims settlement is the ability to settle, pay and close a claim to the satisfaction of the policyholder. Settlement is the end of the line for a claim and the end of the customer service experience when it comes to the claim. GIS helps to support consistent handling of claims settlements.
Opportunities include: claims settlement maps to discover settlement details by area and event to ensure consistent handling of similar events; and prescriptive models that can guide an agent through a claim and suggest a settlement for a known event based on defined criteria.
As mentioned, these are just a few of the opportunities available to this business. The benefit of capability mapping is that it can be applied to any business area and to any organization regardless of industry. The key is identifying the business capabilities of relevance to your GIS strategy and diligently mapping them to the patterns of use.
Step 2: Linking to business value
At this point, we’ve unearthed a handful of interesting opportunities where GIS could be used to support key business areas. But it begs the question: how do we assign specific business value to these GIS solutions? And, how do we demonstrate the value to stakeholders?
Enter the enterprise value map. An enterprise value map is a powerful tool for understanding how value is created within a business (the value drivers). It also identifies specific actions an organization can take to create value (the value levers). The generic version of the map assumes that value to shareholders is created through a combination of strong revenue growth, a healthy operating margin, efficient use of corporate assets and the ability of the management team to sustain the value. The challenge is to identify activities or solutions that drive value by pulling on the value levers.
The benefit of the enterprise value map is that it pinpoints the kind of value our actions and solutions create. This helps with prioritization (see next section). For example, a director might say, “based on our organization’s strategy, we favour actions that grow revenue over those that improve asset efficiency”. The enterprise value map makes this clear and explicit.
Exhibit 4 presents an abbreviated version of the enterprise value map with a selection of value levers included. Let’s apply this to our insurance company example.
Exhibit 4 - The enterprise value map (abbreviated)
Returning to our GIS opportunities, the UAV rooftop inspection solution stands out as particularly interesting. There is a lot of intuitive value in a solution like this, but once we add in the enterprise value map and start to link up all the ways the solution drives value, we can see that it might have even more potential than first thought.
Exhibit 5 shows where and how the UAV solution creates value. A remote inspection solution like this would enable the business to process claims faster with greater consistency. This drives improvements in customer satisfaction and quality and reliability of services—levers associated with revenue growth.
The UAV solution could also significantly reduce the labour hours required to conduct an investigation. This would improve staff capacity planning and utilization and increase use of lower cost channels—levers that improve operating margins.
Finally, using UAVs keeps investigators off rooftops. This could dramatically improve safety and risk associated with this type of work. This would improve the perception of the business in the eyes of external stakeholders as a sustainable enterprise and build on its strengths—levers associated with shareholder expectations.
The benefit of this approach is in the process. Initially, a solution like the UAV solution might be thought of as a time-saving opportunity. But, as we go through the exercise of mapping the solution to the levers, we see that there are many other benefits. And it’s these additional benefits that could elevate the status of the UAV opportunity from a tactical opportunity to one that supports the organization’s most important strategic objectives.
Another interesting feature of an enterprise value map is its ability to demonstrate where a solution fails to create any significant value. In the case of the UAV solution, not much is being improved in terms of asset efficiency. If this is a strategic priority for the business, it can be the catalyst for further exploration into solutions that impact this area. In this way, the enterprise value map is very much an iterative tool. Not only does it show the link between a solution and the value created, but when it is applied in reverse, it can aid in identifying gaps in value creation, thereby indicating areas where opportunity discovery should be focused.
Exhibit 5 - Mapping a GIS solution to the enterprise value map
Although the enterprise value map can be applied to any industry, it is particularly suited to the private sector or industries that are essentially “coin operated”. For public-sector organizations, where value is more about social outcomes and public value, a value map that incorporates societal themes would provide a broader and better picture. (More on that in a future article.)
Step 3: Setting priorities
So far, we’ve uncovered a bunch of great GIS opportunities and showed where and how they create business value. It’s an impressive list! But most organizations have limited resources and can’t take all of these on. Not to mention, we haven’t determined if the return on investment makes these opportunities viable. We need a way to set some priorities.
Key to setting priorities is evaluating the cost and risk of an opportunity against its value. The process involves determining the risk and value factors most important to the organization and developing a method of scoring each opportunity across the range of factors. These factors can be operational, tactical or strategic in nature. Opportunities that provide a positive balance of cost vs. risk vs. value are good investments and should be prioritized for implementation.
For cost, we want to assess the total financial cost of implementation and ongoing operational costs. This includes software, hardware and human resourcing (project and operational). The ongoing costs must not be ignored. Too often, we see organizations do a good job of summing up the initial implementation costs but a poor job of considering the cost of sustainment.
On the risk side, we need to look at a composite of factors – these include capacity and complexity. For capacity, we want to evaluate the organization’s ability when it comes to delivery and support of the solution. If this ability is low, it may indicate the need for an initiative related to capability building. For complexity, we need to assess the technical complexity involved with implementation of the solution as well as the organizational complexity involved with integrating the solution into the business. Other factors can be included in the risk analysis too, but these form the baseline.
On the value side, we previously showed where and how value is created using the enterprise value map but not its relative importance. To do that, we need to identify the composite of value factors. Typical factors include: strategic alignment, financial benefit and competitive advantage. When combined, these factors demonstrate the relative value of an investment from an operational, tactical and strategic perspective.
Returning to our insurance company example, Exhibit 6 shows what the results of a cost-risk-value prioritization might look like. The solutions are generally all over the map, but based on some judgement calls, we can group them into three loose clusters.
The high value-low risk opportunities could be called the “Quick Wins” cluster. The UAV rooftop inspection solution falls into this category as the range of value it delivers, relative strategic importance, moderate cost and moderate risk make it a worthwhile investment. The high value-high risk and low value-low risk groups can be called the “Plan” cluster. These are opportunities that need further exploration or capacity building to implement. The final cluster is the “Defer” cluster. These are the low value-high risk opportunities. These solutions should be re-evaluated or potentially avoided all together.
Exhibit 6 - GIS solution prioritization matrix
The main point of prioritization is to have a structured and justifiable way of deciding which of the laundry list of opportunities you should tackle. Once prioritized, the implementation roadmap is quite straightforward.
Strategy, by definition, involves a degree of uncertainty. Focusing on discovering meaningful opportunities, linking to value and setting priorities can help to ease doubts and strengthen your GIS strategy. With a little bit of work, you’ll get a better strategy that you can communicate up and down your organization.