Spatial Enterprise Applications
Chapter 4 Slides from
James Pick, Geo-Business: GIS in the Digital
Organization, John Wiley and Sons, 2008.
Copyright © 2008 John Wiley and Sons.
DO NOT CIRCULATE WITHOUT
PERMISSION OF JAMES PICK
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and Sons
Organization of Lecture
• Framework for Enterprise Applications
– How GIS and Spatial fits into the framework
• Enterprise Resource Planning (ERP) and GIS
– Pidpa case – ERP-GIS integration
• Customer Relationship Management (CRM) and GIS
– Chico’s case – Example of CRM-GIS integration.
• Supply Chain Management and GIS/Spatial
– Example of U.S. Military
– Example of Wal-Mart
• Enterprise Data-bases/Data Warehouses and GIS/Spatial
• The Prevalence of Enterprise and Spatial Systems: What the Cases
Say
• Conclusions
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Antecedents – Enterprise
Applications
• In the 1990s, integrated systems appeared known as
enterprise resource planning (ERP) systems, that
supported groups of functions or even all of the
functions.
• The modular functions are integrated together and
available to users across the entire enterprise.
• The systems appeared to solve the Y2K problem, reduce
cost, and improve module compatibility.
• ERPs are expensive and difficult to implement, but
contribute to the robust “back office” needed in many
industries for competitive positioning.
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Framework for Enterprise Applications
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Features of an Enterprise-wide Approach to
GIS and Spatial Technologies
• Scalability
• Supported and accessible everywhere
• Connection to external systems
• Ability internally to collaborate and cross-share information
• Security
• Better management
• Maintenance
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Relationship of GIS to Commercial
Enterprise Systems
• ERP is an enterprise-wide, complex software application
having multiple major business applications sharing a
common database and/or data warehouse. Information
flows automatically throughout the ERP structure (Gray,
2006).
• A basic ERP is limited to key functional systems of
marketing and sales, finance and accounting, human
resource management (HRM), and manufacturing (see
figure on next slide).
• For this most common ERP design, other applications
such as business intelligence and GIS, are implemented
as separate software applications outside the ERP, that
coordinate with it. In a comprehensive ERP, more
modules are purchased from the ERP vendor and
included inside the ERP
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ERP with Basic Features
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ERP Software
• ERP (Enterprise Resource Planning) software appeared
in the 1990s in response to need to solve Y2K problems,
reduce cost, and overcome the lack of compatibility of
functional “silo’d” business software packages.
• ERP packages today cost many millions of dollars, are
time-consuming to implement, and require extensive
training.
• ERP II is internet-based, using SOA, XML and other web
protocols.
– ERP II interacts flexibly with GIS and web map services.
ERP and GIS software can be connected together,
which takes advantage of key strengths of each type,
and yields a stronger integrated result for the user.
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Five methods of integration
of ERP and GIS
1.
2.
3.
Inclusion of GIS functionality in ERP commercial
products. Possibility. Not yet available commercially
or announced.
Remote Function Calls (RFCs). The ERP software
and GIS software invoke each other’s remotely
callable functions. Calling software is usually
developed by third-party vendors.
Third-party connectors. Connectors are built by third
party vendors that directly connect packaged frontend and back-end systems. An example is iWay
Control Builder from Information Builders
Expensive, but usually has good performance and
scalability (ESRI, 2006).
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Example of Remote Function Calls – Pointto-Point SAP-GIS Integration
SAP and GIS Integrated -
(Source: Schlageter, 2007)
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Five methods of integration
of ERP and GIS (cont.)
4. Passive middleware. ERP and GIS are connected
at the level of passive middleware, that runs on top
of the operating system (ESRI, 2006). This solution
works as long as users stick to generic ERP and
GIS, and don’t try to customize their processes.
An example is the SAP’s GIS Business Connector.
5. Customized Enterprise Application Integration
(EAI). An environment of standards, platforms, and
connector software that together supports
enterprise integration between ERP and GIS. An
example is SAP Exchange Infrastructure, which
performs this comprehensive integration between
SAP and ArcGIS software.
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Example of Passive Middleware:
SAP’s GIS-Business Connector
(Source: Schlageter, 2007)
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(Source: Schlageter, Oliver. 2007. “GE Energy Integration between SAP ad GIS: today, tomorrow, and
beyond.” Powerpont 1/3/2007. Direct quote from sap.com/community/pub/showdetail.epx?ItemID=8334)
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Pidpa – Example of ERP-GIS
Integration
• Pidpa is a Belgian water utility firm based in Antwerp.
• Supplies drinking water throughout Antwerp Province.
• Network has over 7,500 miles of water mains and
supplies 65 millions cubic meters of water annually.
• Groundwater supply is sometimes polluted giving
Pidpa emphasis on water quality.
– Lab information system (LIM) does continual quality
checking.
• Scada system automatically controls Pidpa’s water
distribution network.
• Synoptiek software creates design diagrams for water
distribution network.
• Hydraulic modeling software simulates network flows.
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Pidpa’s
ERP
System.
SAP’s 4
standard
modules,
plus
control,
asset mgt.,
funds mgt.,
project
systems,
and maint.
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Integration of
Pidpa’s ERP
and GIS
Systems
The integration of
GIS and ERP is by
in-house
programming of its
web viewer
GeoLink and for
the SAP-to-GIS
connection.
GeoLink allows
web viewing of
maps and data
from SAP,
Scada,and CIS.
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GIS and CRM
• Customer Relationship Management (CRM) refers to a business
strategy or application intended to improve customer satisfaction
and in turn to grow revenues and profits (Oracle, 2006). It has
been introduced to you already in the People B Module.
• CRM also encompasses software packages to achieve this and
the transformation of an organization through new thinking about
customers (Oracle, 2006; Gray 2006).
• Advantage of CRM. Customers who sometimes feel neglected
benefit by the personal attention and customized services
provided by CRM. Direct, personal interactions between the
company and customer, termed “touch points,” build and
reinforce the customer relationship (Oracle, 2006; Gray, 2006).
– CRM helps in this process by streamlining targeted
information and providing it to the customer and to customerservice.
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GIS and CRM (cont.)
• GIS and CRM can be connected together in
ways similar to GIS-ERP connectors.
• Once connected, the joint applications include:
• Data collection and enhancement. GIS can be
helpful in error-cleaning customer data.
• Geocoding and mapping reveal errors that can
be corrected including on-the-ground.
• Spatial analysis can be used to impute missing
values. For instance, customer data for a
missing location can be imputed from customers
at adjacent locations.
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Other GIS-CRM Joint applications
• Business intelligence. BI is useful in CRM for data
mining, modeling, and forecasting. Many BI techniques
can be spatially-enhanced. Data mining is strengthened
by including spatial location of customer and other
entities.
• Distribution of human and other resources. The
workforce and investments being applied to enhance
customer relationships can be modeled spatially. For
instance, sales force automation seeks to allocate a
sales force in the best way to identify customers and
develop relationships. Map layers of the locations of the
sales force and its customers can be overlaid and
compared.
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Chico’s Case Study: GIS and CRM in
a customer-centric fashion company
• Chico’s is a women’s apparel chain that emphasizes
customer service and appeals to a “mature” (45-years-plus)
market.
• Founded in 1983, by 2006 Chico’s had store, catalog, and
web sales that totaled $1.4 billion, and employed 11,000
persons.
• It has had rapid growth and planned to add 150 new stores in
2007 (Chico’s, 2006).
• It has always emphasized customer loyalty and direct
marketing (Roussel-Dupré, 2002). This is highlighted by its
Passport Club which requires $500 in cumulative purchases
for membership.
– There are 1.7 million permanent members of the Passport Club
and 334,000 members for its slightly less expensive White
House/Black Market chain of stores (for 35-year-plus age group).
– Club members provide 80 percent of Chico’s revenues.
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Chico’s sales approach
• Chico’s sales approach is characterized by sales
personnel who offer an attentive and
personalized approach to customer care.
• Typical customers demand new apparel
frequently so there are rapid inventory turns.
• The philosophy is that employees act as if they
work for a small local store, e-mailing customers,
being friendly to, and even calling customers by
first names.
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Chico’s Enterprise Systems
• There is not yet ERP but it is planned for rollout
in 2008. Instead there are a group of
specialized application packages, many leading
ones for the retail industry (Chico’s, 2006).
• For CRM, Chico’s uses the Connected Retailer
from NSB, which supports CRM as well as store
merchandising, planning, allocationreplenishment, and sourcing.
• GIS software is run alongside the Connected
Retailer and utilizes the same database of
customer information.
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GIS and CRM at Chico’s
• The CRM information is used for decision-making on opening,
closing, or changing store locations. The AnySite software
analyzes the relationship between the current store location
preferences of customers and prospective real estate locations.
– For instance, if a new store site is being evaluated,
customers can be mapped color-coded by their existing
store primary-preference. If an area reveals a mixture of
colors with no clear store preference, that points towards the
need to locate a new store in that area.
– The map also shows topographic and manmade barriers
such as rivers, highways, and hills that may influence
whether or not, and where a new store is designated.
– The amount of “cannibalization” (i.e. a new store taking
sales from old ones) can be predicted, and steps taken to
adjust to the correct amounts of merchandise at each outlet.
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Features of CRM with Spatial
Components
• Direct Mailing. An estimated 5 million items are sent
monthly to customers, including event promotions,
coupons, and catalogs (Roussel-Dupré, 2002). The CRM
refines this mailing through analysis that gives the
optimal customer audience for a particular mailing.
• Unified customer database. Prior to the CRM, each
sales channel had its own customer information system.
The CRM gathered them into a uniform customer
database that supports the cross-organizational flows of
information referred to earlier for CRM (Roussel-Dupré,
2002).
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Features of CRM with Spatial
Components (cont.)
• Business intelligence for CRM. Chico’s is able to perform
analytics to make customer relationship processes more
efficient and to understand customer patterns better.
• For instance, Chico’s was able to determine that its best
customers on the average shopped in a Chico’s store every
four to five weeks.
• Through CRM and GIS, it was able to find out where
customers shopped and what they bought at particular
locations. In Florida, Chico’s many stores have a seasonal
customer flow. A woman Passport member vacationing from
Chicago may purchase two tops in Florida, that can be
compared with her purchase profile in her home city.
• Forecasting. The CRM enables the firm to predict, based on
historical records, how the customers residing in an area
would respond to a sales promotion. GIS is used to map the
results.
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Chico’s Success with CRM and GIS
• Chico’s has capitalized
on its loyal customer
base by implementing a
successful CRM
supported by GIS.
• GIS has reinforced CRM, by taking into account
where customers shop, what they buy where,
and what is the geography of customer
relationships.
• The strategic success of CRM coupled with GIS
is tied to its synchrony to Chico’s key value of
developing and sustaining customer loyalty.
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Supply Chain Management
• Supply chain is the flow of goods and services in an
organization.
• Goods originate in raw materials, are transported,
assembled into components, further assembled into
finished products, distributed, sold, and sometimes
returned.
• Supply chain management uses modeling and
analysis techniques to improve performance and
functioning of the corporate supply chain (Gray,
2006).
• Information systems including GIS are important in
controlling and coordinating the supply chain,
enhancing its efficiency
and
profitability.
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Supply Chain Modules in ERP
Packages and Standalone
• Supply chain software is available as modules in ERP
packages such as SAP. The ERP approach has the
advantage of tight, seamless exchange of supply chain
with the other major business systems, but the minus of
reduced flexibility in modifying the supply chain
parameters for a particular client.
• Supply chain is also available as standalone software
from such vendors as Logility Inc., Catalyst International,
Aspen Technology, and Clarus Corporation.
• In the enterprise framework, supply chain can be inside
or outside of ERP and can consist of a commercial
package or in-house program.
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Contributions of GIS to Supply
Chain
• Any item moving in the supply
chain with recorded geographic
coordinates can be more
accurately tracked from a
combination of GIS, RFID, and
GPS.
RFID Reader
• GIS contributes for:
Source: www.capturetech.com.
– Spatial analysis of supply, manufacture, and delivery
points.
– Spatial distribution of customers in the supply chain.
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Spatial analysis of supply,
manufacture, and delivery points.
• Transport and shipping durations can be better modeled
by incorporating geography (ESRI, 2006).
– These can be estimated seasonally, at different
daily/weekly times, and projected into the future.
• The whole supply chain can be planned and managed
better with geography.
• Items in the supply chain can be located through
combinations of inventory systems, RFID, and GPS.
– RFID records data on items as they pass fixed reader
locations in the supply chain. If the readers are
spatially-referenced, mapping and spatial analysis
can be performed.
• The U.S. Military and Wal-Mart are leaders.
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Spatial Technologies and Supply
Chain in U.S. Military
• The military utilized RFID and GPS to input location data
into real-time GIS in battlefield situations
• U.S. military’s huge and complex supply chain includes
43,000 suppliers.
• Correct inventory must be supplied to hundreds of
thousands of personnel, and life and death might depend
on it.
– For instance, a combat unit that is quickly running out of
ammunition and food must have delivery at a particular place by
a given time.
• It imposed RFID requirements for all its suppliers by
2005.
• It demonstrated the wartime strategic value of RFID and
GPS in the Iraq War.
(Galuszka, 2005).
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Spatial Technologies and Supply
Chain in U.S. Military (cont.)
• The military spent over $100 million to
implement RFID as a standard by 2005, as a
part of Secretary Rumsfeld’s modernization of
military technology (Galuszka, 2003).
• In the Iraq War, the military was the first to use
RFID for supply chain in combat.
• Military commanders were able to monitor the
supply-chain flow of equipment and supplies in
real time (Military Medical Technology, 2005).
RFID tags were affixed at the individual item,
box, carton, or pallet levels.
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Satellite Monitoring of High-Value Supply
Chain in U.S. Military
• For higher-value ordnance, active tags were used at the item level
that can be read by fixed RFID readers within a 300 foot radius. All
shipping containers have active tags that indicate in detail what is
inside, and can be read by military satellites that pass by every 6 to
12 hours.
– Hence, thus all the supply-chain inventory having active tags can
be viewed and analyzed. In Iraq, hardened RFID readers,
spaced at 120 guarded locations, collect information on the
contents of passing supply convoys instantaneously (Galuszka,
2005).
– When an item is moved in a vehicle, GPS can be used to track
the vehicle and its contents in real-time.
• At U.S. Central Command (CENTCOM) in Tampa, GIS displays
maps of the war zone that show the
shipping containers and high-value
items, as well as aircraft,
drones, vehicles, and fighting
action on the ground.
(Galuszka, 2005; Carlo Allegri, Getty
Images, 2005)
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Benefits of Spatially-enabled Supply
Chain in U.S. Military
(1) In a dynamic battle situation, supplies can be moved to the right
place quickly
(2) cargo can be dropped or sequestered in a “secret” location and
picked up later
(3) what is typically a “just-in-time” supply chain can be changed to
“sense and respond,” which refers to flexibility to change the supply
chain while operations are underway (Galuzka, 2005).
For example, a combat unit under pressure could escape with
limited gear, while leaving equipment and supplies behind, which
are tracked by satellite to be picked up later. Hence, delivering to
an exact location becomes less important.
(4) the supply chain contents become “visible” (Sun Microsystems,
2006). This means that the contents of all the items in the chain are
visible systemwide without opening packages, containers, or pallets
(5) Inventory management is improved, which leads to reduced supplier
fraud and pricing errors, and better theft detection and control of
returns.
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Wal-Mart’s Spatially-Enabled Supply Chain
• Wal-Mart is an industry leader in spatially-enabled supply
chain, but trails the U.S. military
• Wal-Mart’s requirements are set in 2006 to have its largest
suppliers attach RFID to shipping crates and pallets.
• This supports similar potential to the military, but under
different operational constraints. The differences are:
•
•
•
•
Wal-Mart’s goal is to maximize
efficiency and profit, rather than
operational precision for the
military.
Wal-Mart’s RFID readers are
protected and safe.
Exact delivery time-place is
important, but not required as in
combat.
High-value items do not need
active tags and satellite tracking.
Wal-Mart distribution center, with RFID. Source:
www.industrie.weka.fr/.../dispDoc.asp?docid=4776
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Wal-Mart’s Spatially-Enabled
Supply Chain (cont.)
• There is a leveraged effect for suppliers to
adopt RFID upstream and downstream in
this huge supply chain, and other major
retailers are following Wal-Mart’s example.
• Wal-Mart’s RFID costs should drop, since
the projected larger volumes imply that
pricing of passive RFID tags will drop from
25 cents to under 1 cent within a few years
(Williams, 2004).
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Case Study Results on GIS Linked to
Enterprise Systems – large firms
Extent that GIS is linked
Case Study Firm
to ERP
Global Integrated Oil No.
Extent that GIS is linked
to Supply Chain
Management
Extent that GIS is linked
to Data Warehouse/ Data
Mining
No.
A little. One very small
project in the additives
company of GIO. Maps
show suppliers, processing
plants, customers and
company locations.
A little. One focused project
used data mining and GIS.
ESRI GIS and fuzzy logic
used to search data for
upstream applications.
Extent that GIS is linked
to CRM
Large Commercial
Bank
No.
No
No.
Yes. GIS Group extracts
data on value of customers
from the data warehouse,
and georeferences it.
Rand McNally
Yes. Rand McNally has an
internally-developed ERP.
Spatial functions link the
ERP with direct store
delivery coverage and
routes, and inventory
management.
Yes. In large sense, GIS are
a part of CRM. Plan-ograms (shelf layouts) created
for customers. These linked
with areal demographics.
Yes. GIS helps in
understanding parts of SCM
flows. Used for inventory
mgt. and projections.
Yes. Large data warehouses
are accessed with data
mining to create input data
that is scaled for GIS-based
products.
Sears
A little. In marketing.
A little. CAMS (Customer
Allocation Mgt System)
allows managers to provide
services where customer
densities are low.
No.
No.
Note: the following large-sized firms in the sample had no enterprise applications with GIS: Kaiser
Permanente, Large Credit Bank, Large insurance Company, Southern company, URS, Norwich Union
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Case Study Results on GIS Linked to
Enterprise Systems – small and medium firms
Extent that GIS is linked to
ERP
Extent that GIS is linked to CRM
Extent that GIS
Extent that GIS is linked to
is linked to
Data
Supply Chain
Warehouse/
Management
Data Mining
Case Study Firm
Chico's
No.
Yes. A CRM package is usted for direct No.
mailings and customer information.
Through linkage with GIS software,
mapping and saptial analysis supports
the CRM.
No.
Baystate Health
No. Slowly getting there.
No. Baystate has a CRM, but not yet
been linked to GIS.
No.
No.
Sperry Van Ness
No.
Yes. GIS and Microsoft CRM 3.0
No.
integrated for commercial real estate by
adding maps and aerials.
No.
Note: the following small/medium-sized firms in the sample had no enterprise applications with
GIS: Lamar Advertising Co., Arizona Republic, Western Exterminator, Baystate Health,
Prudential Preferred Realty, Engineering Systems, Motion-Based Technologies, and MapGistics
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Sample Results on Prevalence of
Enterprise Systems
• 63 percent of the 20 case study firms do not have enterprisewide spatial applications.
• In fact, only one case Rand McNally had widely integrated GIS
and enterprise spatial applications
• Five out of 19 firms had integrated GIS and supply chain
management.
• The least prevalent coupling (only Rand McNally out of 19 firms)
was between GIS and ERP.
– This may be due to the current high cost and technical difficulties in
linking them up.
• In the sample, three quarters of the integration of GIS and
enterprise software was for large firms.
– This is not surprising, since large companies tend to have the
resources to afford the high cost and skills necessary to
implement, manage, and maintain enterprise software.
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Conclusion
• Enterprise applications are mainstays that control the
“back office” of businesses, and monitor and supervise
the operational business processes.
• Major enterprise applications covered in this chapter are
ERP, CRM, Supply Chain Management, and Data
Warehouses.
• GIS and spatial technologies are also enterprise
systems.
• They can function in a collaborative, coupled
environment with the business enterprise applications.
• At the underlying storage level of databases and data
warehouses, spatial features can be built in.
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Conclusion (cont.)
• The contributions of spatial technologies to enterprise
applications is to refine the accuracy of performance of
the applications by recognizing location of customers,
facilities, assets, transport vehicles, and other business
phenomena.
• GIS also provides visualization and exploration benefits
to understand enterprise information and make better
decisions.
• The challenge is to design spatially-enabled enterprise
architectures that provide added value to corporate
users and customers, and are flexible enough to change
with the rapid technology advances in this field.
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