One of the most powerful uses of location data is its ability to inform far-reaching strategic decisions. One of the most forward-thinking issues businesses face is how to manage their risk. I interviewed Nigel Davis, executive director of product development at Willis Re, who was a speaker at this year’s Esri Business Summit, to learn more about how the insurance industry is putting location data and geographic information systems to work. The following is an edited transcript of our e-mail conversation.

How is Willis Re using GIS? What are some of the problems you’re trying to solve?

There are a wide range of GIS tools ranging from desktop analysis tools, server applications, mobile and Web browsers, 3D viewers and many more. At Willis, we use the whole spectrum of GIS capabilities because GIS is at the very heart of our work. Many of the problems that we are trying to solve in insurance are spatial ones, e.g., “Which Japanese properties fell within the recent tsunami inundation zone?”

At Wills and the Willis Research Network, our quest is to understand all there is to know about the world around us; where things are, what they are made of, how nature behaves, etc. To further our understanding and awareness of issues like these is as critical to insurance as it is to many other industries and parts of society. Indeed, this is the very reason we have created the Willis Research Network — the world’s largest collaboration between public science and the finance and insurance sectors. It is comprised of over 50 universities and public science organizations, steered by Willis towards furthering our knowledge for both insurance and other industries alike.

How has the use of GIS affected modeling and risk management?

GIS has always been an integral part of modeling risk. Desktop GIS allows us to do things like calculate a flood extent using water depth and a digital elevation model, and we have a team of model building GIS experts who do these types of things every day for a variety of perils as we build our Willis models. In terms of risk management, GIS allows us to produce thematic maps of risk for a given territory.

For example, we might produce a thematic map of counties in Florida, where each county is shaded according to the potential loss for an insurers portfolio. A map reveals spatial correlations and patterns that would be difficult to see in a spreadsheet. You would immediately see that the counties contributing to most of the losses might be those which are closer to the coast — of course this is a spatial relationship. In recent years, the improvements in Web GIS allows us to tell these stories via interactive Web pages rather than paper maps or static images and PDF reports. Web GIS is enabling collaboration and more interactive analysis of insurance portfolios through maps.

Are you using this technology together with social media or mobile tools? How so?

Our client-facing Web mapping site (eNCOMPASS Online) now includes some new functionality to mine geo-tagged data from social media sites such as Flickr, Twitter and You Tube. One of the core purposes of this site is for responding to natural catastrophe events. We take topical storm forecasts and allow an insurer to identify those insurance policies that may be affected by the current active storm. We also show earthquake shake maps immediately after an earthquake and, again, allow the insurer to identify affected polices.

Social media allows us to find pictures, videos and text during or after an event, and this might give an insurer a better understanding of the actual local conditions. If imagery from satellites and planes is called “remote sensing,” we might think of this as “near sensing” or perhaps “community sensing.” If we find social media to be a reliable source of information, we might find that this ground-truthing assists with claims validation, planning loss adjusting activities, contacting key policy holders and many other purposes. We don’t yet fully understand the benefits or the pitfalls but like many other businesses, we can see the potential.

Are there ways smaller insurers can put this technology to work too?

The challenge for a smaller insurer is whether to invest in GIS people, data and software to take more ownership of risk management. Quite often these duties are outsourced to the broker (Willis) given that the investment costs are not insignificant. This is indeed part of the reason that Willis offers certain value-added tools like access eNCOMPASS Online. However, Willis will also endeavor to help clients grow in to their own adoption of GIS and risk management and this has also been done when appropriate.

What advice do you have for insurers looking to build support for using GIS tools within their organization?

As always, adopting GIS software is less about the software and more about the people who use it and the operational business processes that are created. Software and GIS technology becomes the enabler, but it remains paramount that the users of the software are capable of drawing sensible conclusions from their work. Particularly for risk management, they need to be mindful of data quality, assumptions and uncertainties.

It is easy to buy off-the-shelf GIS software, but the overall adoption of course takes a little longer. That said, Esri makes it easy to build and deploy GIS applications within your organization and therefore the business benefits can be very quick once the adoption process has taken shape.

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Location data can help solve a variety of business problems by improving facilities management, inventory, maintenance and a host of other functions. But some of the best case studies I listened to at this year’s Esri conference didn’t come from businesses at all.

I sat down with Michelle Ellington, GIS coordinator at the University of Kentucky, to learn more about how the university is using geographic information systems to put location data to work — and how businesses could learn from the university’s example.

A few of her key take-aways:

• GIS helps consolidate knowledge. Large, venerable institutions often have a lot more location data on hand than they realize. GIS tools can help pull all that data into a single set. Consolidating the data helps verify that it is all accurate and makes it easier to update that data, as well as perform further analysis.
• Data is the key to efficient facilities usage. The university plots student registration information on a map, allowing the school to easily understand which facilities are being used by students at which times, to ensure scheduling is being done efficiently. The same system tracks the age of buildings, helping the university schedule maintenance in a timely manner.
• Bad data can be a gateway to information sharing. Getting experts to open up and share the facilities data locked away in their brains can be tricky — particularly when someone doesn’t realize how much valuable information they have. Ellington explained that she was able to get workers at the university to open up by sharing bad data sets with them. Once they were shown inaccurate information that had been compiled, they were only too eager to correct it, she notes.

Watch the full video interview after the jump:

Click here to view the embedded video.

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When retailers and other businesses are looking to purchase commercial real estate, they often turn to a broker who knows the lay of the land for advice on choosing the best site. But how do brokers know where the best corner for a given business might be? Experience and familiarity with territory are certainly part of it, but some brokerages are adding location-data analysis to the mix.

I spoke with Matt Felton, director of research and geographic information systems at MacKenzie Commercial Real Estate Services, to learn how location data are powering smart site selection for businesses. Felton talked about how location tools are empowering brokers in the field, as well as how he’s getting co-workers to embrace location-data analysis.

A few of Felton’s take-aways:

• Take data into the field. Research and site visits used to be separate activities, but tablets and other mobile devices allow location analysis to happen on the fly while visiting a potential business location. Having zoning data, ownership information and more at your fingertips can make conversations between a broker and a client more efficient and productive, because questions asked on the fly can be answered within moments.
• Encouraging GIS requires a flexible approach. If you want to encourage the use of location-data analysis within your organization, you need to be willing to accommodate different styles. Some employees might want physical maps to analyze, but many will want to perform location-intelligence analysis on the fly. Businesses looking to embrace location analysis must plan for various approaches that accommodate different comfort levels.
• Sharing builds buy-in. The easiest way to grasp the power of location analysis is to see it in action. Once you persuade one employee to use location-data tools, you can use his or her efforts as an example to pique the interest of others. Soon, you’ve created a conversation that leads to questions, ideas and wider adoption of the technology.

Check out the entire interview after the jump.

Click here to view the embedded video.

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When you’re looking to expand your retail business, one of the most important decisions you’ll face is choosing a new location. There are a lot of variables to consider: Who lives nearby? What’s the traffic like? Will you be cannibalizing business from your other locations?

You’ll need answer all those questions and more if you want to be sure that a given site is right for your business.

I recently sat down with Robert Buckner, principal at Intalytics, and Sonny Beech, general manager of GIS Inc., to talk about the kinds of data that retailers should be looking at when planning their expansion.

A few of their key takeaways:

• Picking a great business location isn’t about any one data point. Companies need to understand that a variety of factors go into whether a location is suitable for a given company. Understanding where your ideal customers are is key, but so is knowing how far you can expect someone to drive to your location, how competition affects the trade area and other variables.
• Location data complements intuition. The intelligence that comes from location data isn’t a replacement for good business sense. Rather, it’s a way to check out hunches, inform decisions and fill in gaps in a business leader’s knowledge. For example, Buckner notes, a business leader might know all the best locations in their home market, but when a company is contemplating going national or expanding into a region that’s far from their home turf, location data can be a valuable source of business intelligence.
• The value doesn’t stop with site selection. Beech says that all kinds of internal company data can be cross-referenced with commercially available location data to create powerful business analysis tools. Data from human resources, sales and logistics arms of the company can coexist within a single map or piece of analysis, providing a bird’s eye view of how money and resources move through an organization, Beech says. This information can be used to fine tune marketing, operations practices and more, he adds.
• Location intelligence is evolving. Companies used to rely on vendors and consultants for isolated location intelligence reports, but the space has evolved rapidly in recent years. Instead of commission reports on a subject-by-subject basis, it’s now possible to build and adjust models on the fly and address new business questions as they come up.

Watch the full video here:

Click here to view the embedded video.

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Location data can be powerful tools for retail businesses looking to tailor their stories to a particular customer segment, as well as for manufacturers trying to decide which retailers will be most able to move their products. I spoke with Amy Wilde of sales and marketing solutions firm MarketStar to learn more about how retailers are putting location data to work. The following is an edited transcript of our conversation.

How can businesses use lifestyle segmenting to target their retail efforts?

Businesses that are smart with their marketing dollars will use segmentation to first determine who they want to target. A lot of the businesses, especially small businesses, that are looking to get into the retail channel anticipate that everyone will want their product. They anticipate that the whole world will want to pick up their new fandangled gadget, but what we’ve found is that they can slim that down and really narrow the field and really determine the segments that they select are going to purchase based on — a lot of times we do market research right up front. We have focus groups or we do an online survey to determine who those people are that would purchase a product through the retail channel, and from that we’re able to take the ZIP codes and do a segmentation analysis.

Now if we don’t have market research data, then we can typically work right with the clients on what makes sense for their brands that they’re going after. A lot of our clients are in the wireless category, and we will work with them on what type of customers they want to target — whether it’s old, young, Generation X; maybe it’s the grandmas and grandpas, the affluent segment that want to keep up with their grandkids.

Once they’ve figured out who they want to target — it can be either a new product a new promotion or an overall brand that they want to start to really define who they want to target. Once they have that in place, it’s fairly easy for us to come in and say, “Here’s where you need to go to market.” Out of all of the [Core-Based Statistical Areas] in the United States, here’s the top 25% that make sense for you, and then they can match that up with a retailer in those areas.

Can you explain a little bit about how you mix location data into this? Where is the data coming from and how are you using it? The retail data, we just simply purchase from a retail warehouse … which just includes addresses, a few firmographics such as square footage and a number of other small firmographics that really guide us. But these are in lists that you can get on the Internet through a number of sources.

Are there other ways you can combine this with maps or other location-related tools, in terms of like visualizing the data?

Certainly any time we can get sales data directly from the retail locations … our representatives will work with the store associates, and afterward we fill out what’s called a call report — basically a survey or a quick rundown of what they did and how many items they helped sell, if there’s competitive products on the ground, if there is a lot of traffic in the store. All of that data is gathered, and we can take that back, and using [geographic information systems], we can help our vendor … determine more closely where to really target their audience, their market, their competitive advantage, all of that stuff. It’s through that data that our reps are collecting through the retail locations.

What are some ways you actually see people use this data to target their marketing or tailor their retail experience?

One of our clients has come to us within the last year or so … they had gone to a third party and collected fantastic data that basically told them who their customer was, but not where to find them. So we were able to use GIS and the demographic and segmentation to tell them where they should go to market, and then on top of that we used this cull report data as well as any kind of other cells data that we could gather with the retail information. We were able to rank each of those.

So now what you have is, you have a slice of where to go based on who you’re targeting, and then within those markets — so say, Atlanta and Salt Lake City and San Diego … now within those markets you know what retailers have the highest propensity for going to purchase that product based on real data that we’ve collected as well as the soft metrics such as demographics and spending categories within the census data.

I think the biggest “aha!” for many of these corporations and the big name brands that we deal with now is the fact that they can look at a market now and understand who is living there, and understand now based on the data … how to target them. That becomes a huge deal. That becomes a really big deal. So, our reps … now go in with a specific message based on who lives around that area.

So if we’re going in the Phoenix area, that’s going to have a higher concentration of these silver and gold, affluent grandmas and grandpas — older generation — that have the ample money to spend on a new product or to buy it. But, they don’t want to be told [about] every single gadget, or every single feature of the gadget, they just simply want a good product that works, that they can work with their grandkids on.

So, what we do is that we have talking points that we teach our sales reps how to talk the talk and walk the walk based on where they’re going, what retail locations they’re going into, what markets and the different messengers by market, and I think that’s real critical in this new wave of how to help everyone save money while going to market … is to be really conscious of who you’re selling to and how to get them to listen and open up. And certainly, it is not the same for everyone, and we’ve come to understand that quite aggressively with our clients, and it’s a brand new concept, though, to most of these big name brands, to really focus on who you want to go after and it’s been very successful for us.

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This Spotlight on Location Data blog series is brought to you by Esri, a leading provider of software that brings location intelligence to business decisions.

I went to this year’s ESRI User Conference to learn more about how businesses were using geographic information systems — tools that combine location data analysis with maps — to solve both tactical and strategic problems.

While I was there, I sat down with APOS Chief Operating Officer Allan Pym to talk about the nature of business intelligence and how organizations can use GIS to make better decisions.

Here are few of Pym’s take-aways.

• It’s about using your whole brain to approach a problem. Pym notes that plotting business data to a map can give a company a broad view of a problem by putting it in context. But GIS tools also offer the ability to analyze several layers of data and develop a deeper understanding of the issue. “The end user …  can start in that very sort of triage manner to understand the problem: Drill as far as they can in the map, and then launch into the capabilities, the details, the data that can come from enterprise-wide data sources throughout the organization. It’s a terrific complement of again both sides of the possessing parts of the brain: one that’s very visual in manner, one that’s very detailed and analytic in manner,” he said.
• Location data can have a wide variety of uses for a wide variety of industries. Fields as diverse as electric utilities and insurers, can use GIS to make sure they’re using resources efficiently and making sound business decisions. Plotting location data to a map can allow businesses to test variables and model potential outcomes until they’re arrived at the optimum decision.
• You don’t have to reinvent the wheel. There are a variety of platforms available to businesses of all types, allowing them to reap the benefits of location analysis without the difficulties that come with developing a custom solution and making sure it’s secure and well integrated with your IT infrastructure. “This isn’t a new appetite that’s just formed recently,” he noted.

Check out the entire interview.

Click here to view the embedded video.

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“I can’t think of a great company that doesn’t have a great vision,” he said during an on-stage interview with Jason Calacanis at the South by Southwest Interactive Festival on Friday.

O’Reilly’s core business is publishing technical manuals, but his company began life as a consulting firm. He noticed that his clients were consistently asking the same questions over and over again because technical manuals for programmers at the time weren’t addressing their needs. During a downturn in the consulting market, O’Reilly started consolidating answers to common questions into short books.

The company made its name in publishing after a friend helped some of the employees sneak into a tech conference they hadn’t been invited to with 30 copies of one of the company’s early manuals. By the end of the conference they had orders for 10,000 more copies.

When the company had started its publishing operations, it went to Sun Microsystems and asked if that firm would like to license all O’Reilly’s manuals for $25,000. Sun declined. One year later, after the company’s tech conference debut, Sun ordered $1 million worth of hard copies.

The manuals were different from what was on the market on the time, he said. Technical manuals were stuffy and difficult to read. O’Reilly wrote in the second person to make his directions more easily understood. The manuals also noted instances where a program didn’t work as advertised and would suggest workarounds, something no official manual at the time would do.

The books had strange black-and-white drawings of animals on their covers, a concept pitched by an artist friend of one O’Reilly employee, even though the artist didn’t know much about the company or technology. O’Reilly approved the drawings because they made the manuals seems less imposing, but also a little bit mysterious, O’Reilly said.

They “created a barrier to entry with branding,” he says.  The manuals are “not immediately apparent why they are the way they are — but if you know, boy, you’re in the club,” he said.

But the brand wasn’t in the unusual writing or the strange covers. It was in O’Reilly’s goal to help people change the world with technology. “Great brands have a core. They mean something,” he said. “Think of it as a train engine. it has be going someplace a lot of people want to go and … powerful enough to bring them all along as it builds momentum.” he added.

Since those early days, O’Reilly has made a name for himself by helping to popularize ideas such as Web 2.0, open source technology and cloud computing — even though O’Reilly is quick to add that in all of those case, he didn’t come up with the concept or the term, so much as he found a way to explain them and help them gain traction.

“I’m really only good at one thing … pattern recognition. I see people and stories that point to a bigger picture,” he said. “I have, I suppose, strong opinions loosely held and I’m good at meeting people and asking questions,” he continued.

Calacanis noted that O’Reilly greets every new person he meets by asking them what they’re working on.

“It’s not the entrepreneur that’s chasing a million bucks [you need to watch], it’s the guy chasing the big idea,” said O’Reilly.

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