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Susan Smith, Managing Editor
Interview with Mike Hickey, President of Pitney Bowes Business Insight
By Susan Smith
Prior to acquiring MapInfo, in 2004, Pitney Bowes had acquired Group 1 Software, a company with some similarities to MapInfo, according to Hickey. They were both similar sized businesses, both former public companies with some product lines that could work together. Pitney Bowes wanted to create a better business by tying together their back end infrastructure and system supports and drive costs savings through the business, while also integrating at the front end in solutions offerings to customers, having more integrated and full value propositions to bring forward. As one organization, Pitney Bowes Business Insight is said to provide “all the integral location and communication intelligence offerings that companies need to secure an accurate view of their customers and effectively integrate it into daily business operations. Armed with this critical data analysis, companies are able to realize increased revenue, improved profitability and enhanced operational efficiency,” according to press materials.
GW: Can you talk about the decision to bring the two businesses, MapInfo and Group 1, together at Pitney Bowes?
Mike Hickey: Pitney Bowes made a decision in September, 2007 to bring the two businesses together. For the past year or so that’s what we’ve been doing. We built a vision and strategy for the business, we’ve restructured, I’ve put the right management team together. Pitney Bowes was also looking at the fact that they have acquired 80 companies since 2000, and how do they start to move their brand so it gets more credit into some of these spaces instead of being known only as someone who is focused on the mailstream?
So that’s where we are now, we’ve launched this new name, it is a subsidiary of Pitney Bowes called Pitney Bowes Business Insight. It is the product of putting the two companies together. We are focused on delivering customer and operational intelligence for our clients. We bring three primary core benefits: we help them locate opportunities which comes with a lot of the location intelligence business that came with MapInfo, and we help connect those opportunities into their workflows of their business, whether it’s changing business rules strategies or somewhere in the work processes. This intelligence helps them give better insight and we also help them communicate effectively with their clients. The communication part was a strong part of the Group 1 product lines as well.
GW: Is the communication also part of your GIS?
MH: The GIS was more focused on communication in the form of marketing to the actual customer, which we still have. But the Group 1 communication side was more towards Delta Dental. For example, they have statements they send out to their clients, what should they look like , how they are easy to read so that if someone has to call for support or questions and customer service that the customer service people can look at the same statements as them, they can open the web and do self service. A lot of that infrastructure and software will depend on how you optimize communication with clients. Think about something like an American Express bill and how it’s organized and how the content is managed in the bill. We have that type of presentation software as part of it.
The two pieces come together on the marketing side, which is from the MapInfo side of the business. The location intelligence is something called ‘transpromotional,’ so companies like American Express are sending out statements every month. How do you combine the fact that you can marry this transaction document with actually doing some promotion? With our site cluster segmentation systems we can tell them a lot about someone just based on their physical address and strong indexes on what type of cars they drive or magazines they read. It helps add value to that whole process. Location intelligence and the whole overlap with GIS and where MapInfo came from is all part of our legacy and is the largest part of our business, it’s about 55% of our overall business and it’s a big part of our future. Our goal is to become a billion dollar business over the next five years and you can’t do that unless the 55% part of your business continues to grow. A lot of people in the Group 1 side to whom data quality has been sold, can also be sold location intelligence solutions now. And we can go back and sell to the customers to whom we were selling LI solutions data quality and integration type systems. In almost all those cases, there’s a need to communicate more effectively with your customers. We are able to help the same clients out in many different parts of the business with what we can offer now.
GW: Are there any changes you’re making to accommodate the economic situation at the moment?
We look at our cost structures and make sure we’re aligning that to what’s going on in the market. From a marketing standpoint we’re not spending as much time marketing on things that might be driving topline because a lot of our clients don’t know if people are going to spend the money to drive the topline, so they start focusing on bottom line themselves. If you can’t control the top line, people want to know if you can help them control their costs. We have solutions that help people with their topline and help them with their cost side, which seems to be more of a focus in solutions at this point.
GW: As I recall when I attended your conference, and in conversations I’ve with your company since that time, you had clients like Home Depot, big stores chains. What are those customers doing with you now, as they may not be looking for new places to build stores?
That’s true. Obviously we would help them if they’re building out a network to place their stories in the best place. But also when they get to the point where they have to close down stores, the same process that you use to put them up you sort of use to pull them down, so we get pulled into a lot of those conversations, and we also do a lot around optimization, profitability of different store concepts, or how to get the most profit out of particular markets. There are still areas we can really help them as their business faces more challenges, and help them to have the insights to be able to manage those challenges.
That’s why we’re somewhat diversified, we are in financial services, insurance, telecommunications, public sector and retail and certainly retail has been one of the ones that has been more challenged over the last couple of years.
We’re diversified by vertical, but also globally, so we’re in all parts of the world. Many times when one part of the world isn’t doing well, another one is, so that does help to balance your loads. We do have some regions of the world that are doing well, and we have some verticals such as in financial services which has been a tough market we did pretty well in. Part of that is our value propositions are lining up with the challenges they’re having now.
GW: What countries or parts of the world that are doing really well with what verticals?
MH: Asia Pacific, Eastern Europe, we have also some of the non-U.S. American market – Latin American and Canadian markets have been doing well as well.
GW: Going forward, what are some of Business Insights goals?