Those of you who know me will know that as well as being responsible for Esri’s business in Ireland I also take a keen interest in the value of what it is we (the geospatial community in Ireland) do for our customers. To that end I am always looking for value contribution, tangible business benefits and return on investment associated with the effective and efficient use and application of geospatial information.
In this regard much of what I have written and talked about over the past few years has been informed by the work that we (Esri Ireland) do with our public and private sector customers, experiencing first-hand the value contribution and power of geospatial information in helping organisations and companies make better and smarter business decisions.
This month further evidence of the value of ‘location’ based products and services has been published in an independent report, an “Assessment of the Economic Value of the Geospatial Information Industry in Ireland”. This report was commissioned by the Irish Government through the Ordnance Survey Ireland (OSi), and carried out by Indecon Economic Consultants. The report, which can be downloaded from the OSi’s website (www.osi.ie), finds that the use of geospatial information is estimated to accrue annual savings of €82m in the public sector alone.
The report also reveals that the industry contributes €69.3m in terms of Gross Added Value to the Irish economy, and has an economy-wide impact of €126.4m. The sector directly employs an estimated 1,677 people, supports the employment of a total of 3,000 people and spends a total of €84.4m on wages and salaries. Export sales of geospatial products and services amounts to €18.9m.
The OSi is to be commended for taking on this challenging but very worthwhile exercise in trying to attach an economic value to what our industry does for the Irish economy. As an industry (if we can indeed call ourselves that) we now have a solid foundation for ongoing discussion and debate about the impacts of ‘location’ to government, business and the citizen. But as Colin Bray, CEO of OSi states “it is (but) a stepping stone for the geospatial industry in Ireland”. This I fully agree with and while rigorous in its approach and solid in its findings I believe that this current report is still somewhat unfinished business in the context of the “value contribution” story.
In my opinion the overall estimate of economic value is conservative and I make that statement with particular reference to the representation of the private/commercial sectors within the report. Having read through the report, and based again on our (Esri Ireland) experiences of working with this sector, I believe that the estimates attributed somewhat to private sector (i.e. accrued time savings of €279m and competition benefits of €104) are simply a ‘tipping of the cap’ to the real value contained within this sector. In presenting these figures the report states that “In our analysis we focus on potential public sector cost savings but productivity gains from the use of geospatial information apply equally to the private sector.” I am not quite sure whether I agree with this statement but if, in the context of ‘economic value’ this is true, I would have thought that the value associated with such productivity gains would be very different in private sector than it would be in public sector.
For example, we are working with one private sector Company that has a €36bn business issue for which they are now looking to location intelligence to help address. Through the efficient and effective use and application of mapping and location data they have already resolved €1.5bn in their first 14 months of using such information. This is just one example from one customer in one particular industry sector and we know of many more such examples.
That said, we (in the industry) must also recognize that this report is about ‘economic value’, which is different to value associated with individual cost savings, return on investment and increased shareholder value, which are all measures that we historically try to attached to the value of what it is we do. I am also the first to acknowledge the extreme difficulty in extracting any form of value contribution from private sector organizations. After all such value is typically that customer’s competitive advantage in their respective industries and markets. And how many of us would willingly divulge our competitive advantage?
In any case I do believe that there is merit for the industry to explore more of these commercial business examples so that we can get a truer reflection of the value of maps & location to the private sector. In light of this I would encourage the OSi and Indecon to progress further our collective understanding of the benefits and value of geospatial information to commercial businesses by taking a deeper dive into the private sector use and application of such information.
Anybody got any other thoughts?