I keep track of the Change This website. It provides PDF summaries of 12-20 pages on new books. I like reading them - I don't think I've bought a book from it yet (the to-read pile is huge) - but it is a great source of new ideas.
I really enjoy the summary from the "Back of the Napkin" book. The author is Dan Roam and he has a blog too - the book is on Amazon. His point is that simple pictures can help tell business stories.
Its a well known fact for business intelligence - so many bad charts are made using Excel and other tools. Geographers know this well since they utilize maps so effectively. Statisticians use lots of charts to explain their models.
However, these uses are mainly to show quantiative data. Roam dives into using pictures to tell qualitative stories - and his examples have fired up my imagination. I'll certainly try some of his ideas and I might even buy his book...
Sunday, May 18, 2008
Sunday, May 11, 2008
The Big Time
This week's Directions Magazine's podcast discusses the ever popular question for geographers - when will companies completely embrace the technology? The question is very similar for statisticians too - mostly, both disciplines are kept in a niche. Statistics applies to direct marketing models, quality control, some forecasting, and perhaps some supply chain problems. Geography applies to site selection and maybe some cost forecasting.
Of course, this is a complete generalization. Many companies completely embrace these disciplines in many ways. But as the podcast notes, even Microsoft and Oracle have a hard time selling geography (and their statistical products are light too).
I have two points. First, you don't need fancy software or training to get started in either discipline. Geography, for starters, isn't that complicated. Just get some zip codes, or states, and away you go. When I worked at the Bank, I helped with the Seattle Seahawk credit card - and surprise, surpise, they tend to be centered around Seattle! Don't need a master's in geography for that one. Similarly, you can do lots of statistical analysis with Excel. Just right click on a chart, and you have a regression showing you R^2.
To break from this level of analysis, you need a company that values information. Which is inherently the problem. If executive management doesn't know the difference between a right click regression and something done properly, then how can they decide? Basic statistics are taught in MBA classes and geography isn't, but statistics is typically just for your thesis. It is rarely applied to case studies or integrated into finance, marketing, operations, etc.
Secondly, both disciplines do not speak the language of the corporation - money. Locating a store at this location, because it is analytically proper - either by visual inspection of a map or complex spatial analysis, isn't the point. The root question is - how profitable will this location be? You need to transform your geographical analysis to the Profit and Loss statement - or any other financial document.
Statistics does get closer. With direct marketing models, one can easily calculate gross profit/marketing contribution and show that the marketing campaign was profitable. But it is difficult to jump from a campaign-centric financial document to a corporate strategy financial document.
Until we can make the transition, we'll be in support roles. We help evaluate risk by providing a framework to think about it. With a statistical model, direct mail campaigns have a x% response rate. With this geographic analysis, we are confident that this proposed site will have sales at least chain average.
With all the pressure of quarterly numbers, executive management is watching their financial documents. It is our challenge to be there.
Of course, this is a complete generalization. Many companies completely embrace these disciplines in many ways. But as the podcast notes, even Microsoft and Oracle have a hard time selling geography (and their statistical products are light too).
I have two points. First, you don't need fancy software or training to get started in either discipline. Geography, for starters, isn't that complicated. Just get some zip codes, or states, and away you go. When I worked at the Bank, I helped with the Seattle Seahawk credit card - and surprise, surpise, they tend to be centered around Seattle! Don't need a master's in geography for that one. Similarly, you can do lots of statistical analysis with Excel. Just right click on a chart, and you have a regression showing you R^2.
To break from this level of analysis, you need a company that values information. Which is inherently the problem. If executive management doesn't know the difference between a right click regression and something done properly, then how can they decide? Basic statistics are taught in MBA classes and geography isn't, but statistics is typically just for your thesis. It is rarely applied to case studies or integrated into finance, marketing, operations, etc.
Secondly, both disciplines do not speak the language of the corporation - money. Locating a store at this location, because it is analytically proper - either by visual inspection of a map or complex spatial analysis, isn't the point. The root question is - how profitable will this location be? You need to transform your geographical analysis to the Profit and Loss statement - or any other financial document.
Statistics does get closer. With direct marketing models, one can easily calculate gross profit/marketing contribution and show that the marketing campaign was profitable. But it is difficult to jump from a campaign-centric financial document to a corporate strategy financial document.
Until we can make the transition, we'll be in support roles. We help evaluate risk by providing a framework to think about it. With a statistical model, direct mail campaigns have a x% response rate. With this geographic analysis, we are confident that this proposed site will have sales at least chain average.
With all the pressure of quarterly numbers, executive management is watching their financial documents. It is our challenge to be there.
Sunday, May 4, 2008
Reality Mining and Good-Bye Suburbia
BusinessWeek had 2 interesting articles in last week's issue. They were a couple pages apart even and they complimented each other well.
The first is a really interesting new data series - mobile phone locations. As your phone drives around, it is constantly in communication with the different cell phone towers so that you are located if they need to make your phone ring.
Well, it turns out, your carrying a large RFID tag. The cell companies have a record of who was linked to what tower when. Meaning, they know where you have been. Imagine the terabytes of data they have. Phone #123-4567 is here and here and here. For retail geographers, this could be the holy grail.
With the phone number, you know where the person lives, so you have accurate geo-demographics. Then you can track this person anywhere. You have an idea where they work, where they play, or where they hide from the world. Beyond that, you can simulate traffic patterns. This'd be huge for billboard people - X million people with this demographic profile drive by your sign.
For restaurants, its all about traffic, and now you can put a time stamp demographic profile, byt ime of day and day of week, for this specific corner. For land developers, you have a time series of traffic patterns to identify quick growing areas or areas with changing traffic patterns.
Wow.
In contrast, we have the end of suburbia. James Kunstler, an author I am not familiar with, says that with gas prices permanently rising, the suburbs, which are a waste of resources, will decline sharply. It will be too expensive to drive from home, to school, to soccer practice, etc. He states that cheap gas (and cars) makes suburbia possible.
This is true. In the good ol' days, cities had incredible density with decent public transportation (watch Roger Rabbit again). As everyone was able to get cars and fill them with cheap gas, developers created suburbs and here we are. Kunstler thinks suburbs will be hurting within 5 years.
He also says that biofuels and hybrids won't help since they won't reduce oil consumption enough to drop demand (therefore price). He thinks "anything organized on a grand scale is liable to fall into trouble - government, finance, corporate enterprise, agribusiness, schools."
Ouch.
Well, at least we can monitor the decline with cell phone tower data...
The first is a really interesting new data series - mobile phone locations. As your phone drives around, it is constantly in communication with the different cell phone towers so that you are located if they need to make your phone ring.
Well, it turns out, your carrying a large RFID tag. The cell companies have a record of who was linked to what tower when. Meaning, they know where you have been. Imagine the terabytes of data they have. Phone #123-4567 is here and here and here. For retail geographers, this could be the holy grail.
With the phone number, you know where the person lives, so you have accurate geo-demographics. Then you can track this person anywhere. You have an idea where they work, where they play, or where they hide from the world. Beyond that, you can simulate traffic patterns. This'd be huge for billboard people - X million people with this demographic profile drive by your sign.
For restaurants, its all about traffic, and now you can put a time stamp demographic profile, byt ime of day and day of week, for this specific corner. For land developers, you have a time series of traffic patterns to identify quick growing areas or areas with changing traffic patterns.
Wow.
In contrast, we have the end of suburbia. James Kunstler, an author I am not familiar with, says that with gas prices permanently rising, the suburbs, which are a waste of resources, will decline sharply. It will be too expensive to drive from home, to school, to soccer practice, etc. He states that cheap gas (and cars) makes suburbia possible.
This is true. In the good ol' days, cities had incredible density with decent public transportation (watch Roger Rabbit again). As everyone was able to get cars and fill them with cheap gas, developers created suburbs and here we are. Kunstler thinks suburbs will be hurting within 5 years.
He also says that biofuels and hybrids won't help since they won't reduce oil consumption enough to drop demand (therefore price). He thinks "anything organized on a grand scale is liable to fall into trouble - government, finance, corporate enterprise, agribusiness, schools."
Ouch.
Well, at least we can monitor the decline with cell phone tower data...
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