From the November 2003 issue of Entrepreneur

When a customer of Nevada Brake & Auto places an order with the Las Vegas automobile parts wholesaler, he or she can expect one of the company's 20 trucks to pull up with the delivery in about 45 minutes. The fast delivery endears the 18-year-old company to its customers, but it's a hassle for owner John Kruger, 51. "We have a tremendous logistics concern," he says.

Recently, Kruger installed an $18,000 geographic information system (GIS) to help his dispatcher efficiently route trucks. He hopes the GIS system, consisting of three computers with software that tracks his trucks on their routes, will trim 5 to 10 percent of the 40-person company's logistical outlay, which gobbles up a significant portion of its $5 million annual revenues. Truck drivers stay in touch by cell phone, as dispatchers enter the drivers' locations into GIS. The whereabouts of trucks are then displayed on a map of the city, along with the locations of upcoming deliveries. "We thought this software could enhance things we've done forever manually," says Kruger.

GIS can be thought of as "a map with data behind it," says Tony Bradshaw, president of Bradshaw Consulting Services Inc. in Aiken, South Carolina. He and his wife and business partner, Elizabeth, sell software and training to companies and government agencies that are implementing GIS systems. They say the technology is coming into its own as desktop computers become more powerful, software becomes simpler to use and geographic data becomes more plentiful.

The logistical applications of GIS appeal to truckers, couriers, railroads and other geographically oriented enterprises. But that's not all, Elizabeth says. "There are a lot of possibilities for what GIS can do for small companies as far as helping to determine where their customer base is," she says. "It can help them determine if they want to open another store and where that store should be, or where they should send out direct-mail marketing pieces." GIS helps marketers by displaying information about customers and prospects in map format. It can show household income by ZIP codes or expenditures on various products and services by census block. Since this consumer data includes geographic data such as address, it can be displayed on a map. (You can even download free market-related data that you can use in your GIS system, such as population demographics from the Census Bureau at www.census.gov or consumer expenditure information from the Bureau of Labor Statistics at www.bls.gov.)

GIS software runs on an average desktop computer and costs $1,000 or less. Some GIS applications can even run on handheld personal digital assistants. That's a far cry from several years ago, when it took a minicomputer or workstation costing tens or even hundreds of thousands of dollars to run a business GIS system. "Computer hardware has caught up with the software," says Elio Spinello, partner in RPM Consulting, a GIS consulting firm in Northridge, California. More sophisticated GIS software that can modify data as well as display it geographically costs around $2,000 or more.

If you decide to go with a GIS system, one of your major costs will be training. There are a variety of training options to choose from, including formal certification programs and instructor-led training classes (expect to pay several thousand dollars) as well as e-learning courses (costing several hundred dollars). ESRI, a leading developer of GIS software, offers both on-site and Web-based training. For information, visit www.esri.com.

"Probably no more than 10 to 15 percent of businesses that could benefit from GIS are currently using it, estimates Tony Bradshaw. Providing better information about business assets is GIS' stock in trade, he says: "You can apply [GIS] to almost any industry because you have data associated with everything, and everything is somewhere."


Mark Henricks writes about business and technology for leading publications and is author of Not Just a Living.