The role of location in digital transformation

August 31, 2017 Matthew Lewin

Location is the great unifier of the digital age. To win at digital transformation, put location at the center of your digital strategy.

If you were to conduct a simple word association using the term “digital transformation”, you could be relatively sure of the answers you’d receive.

Mobile. Cloud. Big Data. Difficult. Exciting. Scary. We’re behind. We’re getting there. What’s digital transformation?

All valid responses. Collectively, these terms represent the primary technologies, emotions and general awareness associated with digital transformation. And to clarify the last response, digital transformation is the use of digital technology to fundamentally change how an organization runs, how it reaches customers and the products and services it provides.

A word that would not come up, however, is location. Or location technology. Or geospatial technology. Indeed, most of the terms used to describe the technologies and concepts that enable location intelligence would not be mentioned. And why is that, especially considering the numerous examples of organizations that have transformed their business largely on the basis of better location intelligence? This includes: cities, state and federal government agencies, utility companies, banks, retail outfits and so on.

The problem has a few causes. First, there is a general lack of clarity around what exactly constitutes “location technology”.  If it’s not well defined, it’s easy to overlook. Second, the significance of location in an organization’s digital transformation doesn’t always resonate. An organization that moves half of all internal processes onto mobile devices tends to focus on the value of mobile. Never mind if most of the processes involve digital maps and spatial analysis.   Finally, for organizations pursuing a digital strategy location often doesn’t fall very high on the strategic radar. In essence, organizations simply fail to ask the question: what role will location play in our digital transformation?

In this article, we review the location technology landscape, discuss the part it plays in digital transformation and look at practical location strategies to support an organizations digital transformation strategy. We also examine an innovative power utility organization that is using location technology to digitally transform its operations. Our analysis indicates that location is a powerful enabler of digital transformation and that having a focused digital location strategy is essential.

The location technology landscape

Before we can dive into digital transformation and the role of location, we need a way to structure the large and complex world of location technology. For some, location technology simply means maps and mapping software. For others, it extends to GPS, remote sensing and surveying. Still, others include smart devices and location-enabled apps in their definition of location technology.

In fact, they are all correct. Location technology includes any systems that create, consume or process information that is innately spatial or geospatial. It means that any technology that deals with data inherently defined by its “location” is essentially a location technology.

How then do we organize such a broad range of technologies? Are there common themes? The short answer is yes. Since location is information, it seems natural to group location technologies according to the information-related functions they provide. In our experience, these functions fall into one of six core categories: collection & acquisition, validation & management, discovery & access, mapping & visualization, analysis & interpretation, and sharing & collaboration.

Exhibit 1 summarizes the modern location technology landscape.

Exhibit 1 – The Location Technology Landscape

At the heart of the location technology landscape are the technologies that define the digital age. These include mobile, cloud, social, real-time, big data and identity. We call these the Digital Foundation. Together, these technologies form the basis of our digital world designed to be ubiquitous, connected, instant and personalized. It’s on this foundation that much of the innovation in location technologies has been built. The world of location technology is essentially defined by technologies that piggyback on, or integrate with, the foundational digital technologies and create a rich landscape where the concept of location or place is the common denominator.

Collection & Acquisition. Before location data can be used, it needs to be acquired. Given the variety and breadth of location-based information, the methods and tools for sourcing this information are extensive. This includes traditional geospatial data acquisition technologies such as GPS, aerial and satellite-based imagery and remote sensing systems, as well as total stations for land surveying. It also includes emerging solutions such as UAV (i.e. drone) based data collection systems, automated vehicle location (AVL) solutions and in-situ sensors placed on physical infrastructure and landforms and connected to the Internet of Things (IoT). Mobile data collection apps, geotags embedded in social media and real-time location-based services are another prime source of location data.

The benefit of these advances is that information that, at one time, could only be inferred from a summarized map can now be measured directly – in some cases right at the source. This has significant advantages in terms of data accuracy and confidence in data quality.

Validation & Management. Ensuring the integrity of data is essential if it’s to be of any use. For location data, this is particularly challenging considering the large number of spatial relationships and topological rules that must be maintained. These rules define how spatial features should logically interact. It’s unlikely, for example, that a bus stop would be located in the middle of the street. Supporting the validation, management and storage of location data are many traditional, non-spatial data management technologies and uniquely location-centric technologies. This includes: geodatabase technologies that support imagery and vector-based location data management; large-scale data lake and data warehouse technologies supporting massive location-based datasets (including structured, unstructured and hierarchical datasets), and a range of spatial Extract, Transform, Load (ETL) solutions for automated quality assurance of both spatial and non-spatial rule sets.

Mapping & Visualization.  Seeing is believing when it comes to location and the world of mapping and spatial visualization technology is massive. It includes traditional 2D and 3D map production software which have dominated this space for years. But it also includes less obvious technologies, such as operational dashboards and heads up displays, high resolution plotters and 3D printers capable of constructing highly-realistic terrain and built-earth models (often through integration with business information modelling (BIM) technology), and virtual reality/augmented reality systems that immerse users in a realistic space. The combination of traditional mapping software and emerging location visualization technologies means that users have a more immersive and more engaging sense of “where”.

Analysis & Interpretation. The true value of location data is the intelligence that is extracted through analysis. A locationally-intelligent business is one that has ingrained location-based decision-making into every aspect of the organization. This means having the ability to measure spatial phenomena, determine spatial relationships, detect spatial patterns and make predictions within a location-based context. The technologies that shape this area are emerging fast and furious. This includes artificial intelligence and machine learning technologies tuned to predict and interpret location phenomenon. Think descriptive land classification models and predictive consumer spend pattern models. This also includes geodesign systems that support 3D and 4D building design with built-in geographic constraints, and smart routing solutions that crowdsource traffic volumes and driving habits (e.g. Waze).

Sharing & Collaboration. Ultimately, location intelligence belongs in the hands of the relevant decision-makers and stakeholders. Like any information, the value of location data is primarily based on how it’s used to communicate and connect with human beings. The emergence of location-based engagement platforms has taken this to the next level. Geohubs (also called community hubs), open data sites and engagement tools like story maps have transformed how location-based content is delivered to stakeholders.

Location – the foundation of digital disruption?

If we step back and look more broadly at digital trends, we see that location technology is actually the foundation of numerous disruptive trends (Exhibit 2).

Autonomous vehicles (i.e. self-driving cars), for example, are threatening to profoundly impact the automotive industry. Crucial to safe and sustainable operation of these vehicles is the availability of high-accuracy, up-to-date (i.e. real-time) data on road conditions, routes and traffic volumes. To achieve this, location data will need to be acquired from many sources. This includes route data from the local government authority, road condition data from closed circuit cameras (real-time), public works and utility operators (planned disruptions), crowdsourced data from mobile devices for traffic volumes and so on. Not only does this data need to be acquired, but it needs to be validated for accuracy, analyzed for proximity to hazards, pedestrians and other vehicles, and presented to the driver for positioning. This is an immense location-based challenge at its core.

The same is true for industry-specific disruptions such as digital oilfield or smart cities, as well as technologies driving societal change such as the gig economy (think Uber/Lyft). Location is a critical element in all these trends.

Exhibit 2 – Location Technology is at the Heart of Transformative Industry Trends

What about GIS?

You might be wondering where GIS is in all of this. After all, when we talk about GIS we often talk about similar topics, including data capture, data management, mapping and analysis. For the purposes of this discussion, we consider GIS as an important subset of the broader concept of location technology. Location technology extends GIS to include technologies that sit at the edge of what we would usually consider “true” GIS. This includes collection technologies such as in-field sensor networks or visualization solutions such as wearables and augmented reality tools. It also includes technologies that are location-based but not strictly geospatial (i.e. based on models of the earth) such as BIM or computer aided drafting systems.

Building the right digital location strategy

Given the breadth of location technology, it’s not surprising that organizations could be overwhelmed by their options. This is why leveraging location technology in service of digital transformation requires a clear strategy. Essentially, an organization must focus on building the right digital location strategy to support its digital transformation strategy.

Typically we see digital transformation strategies fall into one of three categories based on the area of business they impact. These include: operations, customer experience and the business model.

Operations transformation involves using digital technologies to reinvent how an organization is run. This includes: digitization of key business processes, enablement of the workforce through elimination of barriers to communication and improved collaboration, and improved operational performance management.

Customer experience transformation involves creating new ways of serving and connecting with customers. This includes: leveraging digital technologies to gain superior insight into customer behaviour, improving demand generation and sales fulfillment, and optimizing responsiveness to customer needs.

Business model transformation involves the creation of entirely new business frontiers through digital technologies. This includes: reinventing existing service and product offerings to go “digital”, creating new business categories as digital offerings, and expanding the reach of the business globally through digital channels.

The role that location plays in digital transformation is really a question of what is the right location strategy given the chosen transformation strategy? Assuming an organization is tackling digital transformation in the three ways described, there are some corresponding location strategies that make sense.  Exhibit 3 illustrates the link between an organization’s digital transformation strategy and their digital location strategy.

Exhibit 3 – The Right Digital Location Strategy Enables an Organization’s Digital Transformation Strategy

For operations-based strategies, location is an enabler of operational effectiveness. Product or service workflows can be optimized through instant and targeted access to location-based content and maps (see our example from Veridian Connections below); staff and partners can be connected across geographical and organizational boundaries through access to localized and location-specific information resources; and management can leverage descriptive and predictive location-based analytics to improve operational oversight.

For customer experience-based strategies, location is a platform for targeted customer engagement. Customer understanding can be transformed through access to location- based analytics that detect patterns in customer behaviour; marketing can target customers through location-specific customer segmentation analytics; organizations can multiply their customers interaction options by providing access to localized, digitally-enabled sales experiences; and organizations can foster two-way engagement with customers with personalized mapping tools and location-based content (think geospatial smart community hubs).

For business model-based strategies, location is a driver of product and service innovation. Existing products and services can be expanded or repositioned based on new location-based capabilities; entirely new products and services can be created that address a gap in the market on the strength of their inherent location intelligence (think Waze); and organizations can expand and optimize their operations across geographic boundaries through tools that facilitate localized business.

These are just some of the conceivable strategies, but what’s important is that when you focus on the possibilities and benefits of location you add an entirely new dimension to the digital conversation. This can take you off into exciting new directions and blue ocean transformation strategies. As with any strategy, don’t forget to focus on building the right capabilities to ensure your organization can deliver on its digital location strategy. This includes technology, competencies, processes and governance.

Case study - Veridian Connections: Transforming operations through location

Veridian Connections is the fifth-largest municipally-owned electricity distributor in Ontario, with more than 120,000 customers. Over the last five years, Veridian has harnessed location technology to transform its daily operations.

With assets spread across a number of municipalities, Veridian has always been a location-centred organization. Finding information, however, was a challenge.

“Historically, we had so many systems, no one knew where to look for information,” said Maged Yackoub, manager of operational information systems, Veridian. “We were always dependent on someone else to help us find what we were looking for.”

Yackoub and his team formulated a digital transformation strategy aimed at digitizing key operational processes. Specifically, they focused on connecting workers with timely and accurate location-based content at key touch points in their workflows. The intention of digital location strategy was to:

  1. Improve data quality and increase collection speed
  2. Disseminate data across the organization

These goals were to be achieved by redesigning processes around location technologies and integrating existing systems with a new, centralized system of record for all asset-related data.

A small team of specialists in their IT department was already using GIS tools, but the new strategy called for making a broader array of location technology accessible to everyone in the organization – from field workers to customer service personnel.

Veridian introduced mobile workforce management software to streamline data collection and bring it under a governance framework. The utility also developed web-based map visualizations for viewing of service requests and work orders by location.

With these location-based tools, Veridian engaged its employees to become both owners and consumers of the information they collect. Previously, they used paper-based processes for activities such as transformer inspections. Field inspectors would give collected data to a map technician for entry into the system and never see it again – they had no way of recalling their work. Now, with digital work orders, inspectors can submit data directly from their tablets and view the results immediately on a web map.

“We gained support from our executives by delivering focused solutions to known problems,” noted Yackoub. “They recognized the value of location and location technology and told us to make it happen.”

Veridian’s development team digitizes 1–2 processes per year, based on users’ tolerance for change. They take an agile approach to each project, with most solutions driven from the bottom up.

The team gets users to buy into the new apps by asking them to help design solutions to their own problems. When an app is ready to launch, the team trains several power users to act as champions among the staff. To encourage users to be self-sufficient, the team posts video tutorials explaining how to perform common tasks.

Veridian has achieved a significant increase in efficiency too. Employees no longer have to rely on one department to extract and analyze information; they can quickly do it themselves.

GIS technicians, freed up from data entry, are now able to focus on higher-value work that leverages their expertise.

The simple act of viewing data on a map has provided tremendous insight into business challenges. For example, when someone mapped the distribution of pole fires, a distinct pattern emerged along one stretch of highway. As a result, Veridian was able to deploy a preventative solution that has sharply reduced the number of costly incidents.

According to Yackoub, Veridian’s transformation never hinged on technical issues, but on the human factor. The organization simply had to learn how to work in a different way.

The key to accomplishing this was to engage users early and involve them at every step. Veridian rolled out each new system in parallel with the old one, giving users a chance to compare and conclude for themselves that moving to the new system made sense. People who reached that conclusion on their own often became the biggest advocates for change.

At its core, digital transformation is about change. Change that fundamentally alters how an organization functions, how it reaches customers and even the very products and services it produces. As a powerful enabler of change, location is a secret weapon in the quest for digital transformation. Organizations that embrace location and integrate location-intelligence more deeply into their business are poised for the future. Be sure to approach the world of location with a broad lens and get your location strategy right.

About the Author

Matthew Lewin

Matthew Lewin is the Practice Manager of Management Consulting for Esri Canada. His efforts are focused on helping management teams optimize and transform their business through GIS and location-based strategies. As a seasoned consultant, Matthew has provided organizations in the public and private sectors with practical strategies that enable GIS as an enterprise business capability. At the intersection of business and technology is where Matthew’s interests lie, and he thrives on helping organizations bridge the gap to achieve their most challenging GIS ambitions.

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