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Archive for the ‘GPS’ Category

According to a recent survey, digital mapping services have emerged as one of the most powerful growth areas in information technology in South Africa. The survey of 111 corporate and 400 SME decision-makers was conducted by World Wide Worx with the backing of digital mapping provider MapIT.

The survey revealed that three-quarters of South African corporations allocate more than 2% of their IT budgets to mapping services and that last year, 78% of corporates spent more than R50 000 on mapping services with 22% spending over R500 000. A key point to emerge from the survey is the fact that 70% of corporates intend increasing their mapping budgets in 2013 indicating that mapping is being seen to have increased strategic value for corporations.

In contrast digital mapping services are seen as a luxury item by SMEs. Most SMEs are spending below R50 000 of their IT budget on mapping services and just over a third of SMEs allocate more than 2% of their IT budget to mapping services. There is not yet the same strategic value in mapping services for SMEs as there is for corporates; yet despite this, 66% of SMES intend increasing their digital mapping budgets in 2013.

As Arthur Goldstuck of World Wide Worx points out, South Africa is currently experiencing tight economic conditions and if budgets are being increased for mapping services then they have to be of value. If mapping wasn’t working for companies, more budgets would be decreasing.

Both corporate and SME respondents indicated that the key benefits of digital mapping for their companies were enhanced security (fleet tracking), efficiency and productivity with increased competitiveness and cost effectiveness also being seen as important.

The survey also revealed that 47% of South African corporations operate outside South Africa while only 23% of SMEs operate beyond South Africa’s borders.  This implies that companies looking to target corporates with their digital mapping offerings need to be able to offer digital mapping services covering areas beyond South Africa. Traditional mapping services are not enough anymore. SMEs need mapping services with a national focus while corporates need mixed mapping services to meet their needs.

SMEs tend to lag corporations by 2 years when it comes to adopting new technologies, says Goldstuck. A typical SME has an IT budget of R1-million while the typical corporate budget is R30-million. Consequently SMEs need the business case to be very clear before they can adopt new technologies. They need obvious cost-effective solutions.

Location-based marketing, however, is one of those rare technologies where corporates and SMEs are on the same page says Goldstuck. Forty-one per cent of corporates used location based marketing in 2012 with 56% indicating plans to adopt its use in 2013. In contrast 35% of SMEs used location based marketing in 2012 with 54% indicating that they intended using it in 2013. These results clearly illustrate that the business case for location-based marketing services is strong, leading to an inevitable further demand for digital mapping services during 2013.

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Unless things take an unexpected turn, the world is going to a very different place financially. The sub-prime crisis is blossoming by the day into a problem of almost catastrophic proportions. The global financial infrastructure is tottering as reputable giants collapse under the weight of their reckless investment losses and the survivors frantically search for skirts to hide behind.

As we in South Africa already know the boom times are over. Higher food and fuel prices, as well as everything else, are taking an increased chunk of our pay packets. However this is going to seem like a walk in the park when the effects of the financial crisis in the USA begin to trickle our way.

The best-case scenario is that the US Treasury’s $700-billion dollar bailout plan succeeds in hiving off the “toxic debt” and stabilising the investment banking sector. However this major bailout package will create its own repercussions. Liquidity is expected to become a major issue as the availability of credit tightens up around the globe resulting in widespread economic slowdown.

As tightened economic conditions begin to bite even more deeply, we are going to see increasing levels of dissatisfaction among the poor. President Kgalema Motlanthe’s government is going to have its hands full dealing with the impact of the global financial crisis as well as with pressure from the likes of Cosatu to accommodate the needs of the poor.

As global liquidity tightens up, GIS and GPS-enabled technologies are going to come into their own. Politicians and business leaders would be well-advised to make use of these technologies to make more effective and efficient use of the budgets at their disposal.

In the July/August edition of PositionIT we published a views article by Craig Schwabe entitled “Social accountability and GIS”. In the article, he states that effective service delivery and development require the use of social accountability approaches and that GIS is key to the implementation of these approaches. Perhaps it’s time to give that article another read.

On the business side, use can be made of GPS-enabled technologies to increase mobile workforce productivity and reduce fuel-operating costs. In addition to these cost savings, locationing applications can be used to optimise employee routes, saving time spent in traffic and on figuring out how to reach a new destination. As you will see in the article “Location intelligence: the new DNA of insurance” insurers are already making use of location intelligence in their management of risk – basing their decisions on whether to provide insurance cover on an accurate assessment of the potential risks (see page 68).

What a pity that the financial gurus over at Lehman Brothers, Northern Rock, Fannie Mae, Freddie Mac, Bear Stearns, AIG, Merrill Lynch et al didn’t pay more attention to their risk management planning.

 

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The future looks very bright for the GPS industry with “The World Global Positioning Systems Market Forecast (2006-2008)” by market research firm Global Industry Analysts (January 2007) predicting that the global GPS market will reach a value of more than R210-billion by 2008.

Another interesting US study by, Ventana Research (September 2006), points to the industry experiencing growth over the next few years, however, the research also identifies the need for technological advances to be offset against consumer concerns about cost, reliability and integration.

The survey reveals that 35% of respondents highlighted improved precision in readily available GPS and related technology as the number one industry trend, and 47% identified this as the most important technological development. Respondents rated further advances in engineering and system design lower than increasing precision, with embedding technology into commonly used devices receiving 40%, and improving the design of receivers, 39%.

A different survey by the US Consumer Electronics Association (December 2006) indicates that 33% of future GPS buyers are interested in owning a phone that has GPS/navigation capabilities. Clearly pointing to integration playing a major role in future market developments.

With regard to specific applications of GPS and related technology, nearly half of the Ventana Research respondents rated mapping the most important. Interestingly the study points out that with mapping being a basic capability of any location-specific application, its top ranking as the most important type of GPS and related technology application, illustrates the emerging nature of this particular market. However, the report also indicates that users don’t just want to present maps on a variety of devices; they want to use maps to calculate positioning and to navigate.

The research identifies strong concerns over several vital issues. Expense came out on top with 73% of respondents citing the implementation costs of this technology as cause for concern. Following this, responses varied according to the various industry types. Respondents in surveys and mapping selected precision as their top priority while those in avionics targeted guidance and navigation. Military respondents identified navigation while those working at utilities chose tracking.

The Ventana survey also examined responses based on industry roles as manufacturers and purchasers to determine the maturity of the industry. They found that the priorities and intentions of the two groups were not in sync. 47% of purchasers pointed to internet research as their main source information influencing their purchase of GPS and related technology, while manufacturers only ranked it fifth. In addition, marketers indicated a preference for traditional marketing methods like direct marketing, trade shows and conventions; while purchasers placed a bigger emphasis on print advertising and industry trade publications’ websites. (Great news for PositionIT!)

Interestingly when asked about anticipated changes over the next three years, both manufacturers and purchasers of GPS related technology pointed to the largest expected change as being their choice of suppliers and partners. This means new players can be expected in the market as well as consolidations among existing manufacturers. There are also likely to be new business opportunities for those prepared to take the advantage of these predicted changes. Exciting times lie ahead.

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