(FORTUNE Magazine) – IT WAS AN AWFUL MESS,'' recalls Gene Wirsig, a technical services manager for the western division of Potlatch Corp. The FORTUNE 500 forest products company ^ owns 600,000 acres of timberland in northern Idaho, and ten years ago the keepers of its inventory were spending a mere $200 annually on data processing. An old Monroe mechanical calculator cranked out columns of figures on a narrow paper tape. Maps of the company's timber stands, scattered among 2.2 million acres of federal, state, and private property, an area bigger than Rhode Island and Delaware combined, were hopelessly out of date -- no small matter when cutting trees on someone else's land can cost you triple damages. Information about a single timber stand was stored in hundreds of individual office files, often miles apart. Says Wirsig: ''We were trying to address questions about changes in ownership, for example, that would take months of delving into that antiquated database to answer.'' This year Potlatch's inventory group will lay out $180,000 for data processing -- and the company thinks that's a bargain. A new combination of automated mapping and data processing gives Potlatch up-to-the-minute information on the status of 4,900 separate timber stands. A forest manager sitting at a terminal can check land ownership changes in a few minutes by zooming in on a map of a particular site. ''We can now find exactly what we're looking for,'' says Wirsig. ''This is really a quantum leap in data management.'' The company has combined digitized maps of its properties with computerized data on the type and age of trees, soil quality, access roads, ruggedness of terrain, ownership of abutting land, and market prices of different kinds of finished lumber. The data can be updated continually, and other variables are automatically adjusted in turn.

Potlatch has spent about $650,000 on hardware and software since it began putting in its new system three years ago. Wirsig and his colleagues figure that they have far exceeded the 27% annual return on investment they had promised their bosses. While they can't put exact dollar figures on their savings, they know they are substantial. Two administrative jobs have been eliminated, for example. The division has become a finely tuned mechanism that manages the timber inventory much more efficiently than it used to and responds far faster to sudden challenges from competitors or other changes in market conditions. WHAT POTLATCH has adopted -- a geographic information system, or GIS for short -- makes possible storing dozens of different kinds of data and viewing all or some of them at will in a clear, integrated display. It's one of the ; fastest-growing branches of computing, with ever-widening uses that range from identifying crime patterns to planning marketing strategies to plotting wildlife tracks in areas where natural resources may be developed. GIS technology is spreading because, for one thing, it's becoming a lot less expensive. It may still cost as much as $200,000 for the hardware and software necessary to get a medium-size GIS system going on a minicomputer or a mainframe. But ComGrafix Inc., a small company in Clearwater, Florida, has just begun offering software for as little as $8,500 that runs on a $2,000 Macintosh. IBM has given GIS its blessing and sells a $2,500 software package for its PCs. Until recently the only way to keep track visually of lots of different kinds of data about a geographical area had been to use a basic map and a series of overlays, each presenting a specific type of information -- fire station sites, for example, or pollution sources, or neighborhood variations in household income. The idea of recording different layers of data on a single map dates back at least to the Revolutionary War, when a French cartographer prepared hinged overlays for General Washington showing troop movements at the battle of Yorktown. In 1855 a map of a cholera epidemic in London helped solve a public health crisis by pinpointing a contaminated well as the cause of the outbreak. When more than two or three overlays are combined, however, maps quickly get confusing. Computers have changed all that. IN A SENSE, geographic information systems are the geographical equivalent of a computerized spreadsheet. What users of Lotus 1-2-3 are accustomed to doing with financial data, GIS makes possible with maps as well. Says Lisa Thorell, an analyst at the Dataquest market research firm, who has a Ph.D. in visual sciences: ''Eighty percent of the input pathways in the nervous system are devoted to bringing visual information to the brain. The more information you can absorb visually, the quicker you can come to a decision. Everyone can read a map. It doesn't look abstract, and it's much more appealing than looking at tables of figures.'' By marrying computerized data with automated mapmaking, the pioneers in this field have created a remarkably versatile new tool to help manage corporations, cities, wildlife refuges, military bases, and a variety of other operations with a precision unattainable before. GIS software similar to Potlatch's is being used, for example, by Ducks Unlimited, a conservation group that hopes to reverse a decline in some migratory bird species by combining satellite images with other computerized geographical data to pinpoint man's encroachment on marshland. ''We're getting a handle on the habitat,'' says Barbara Vogel, a Ducks Unlimited computer cartographer. In cities and towns from Tacoma to East Greenwich, Rhode Island, planners, police and fire officials, road builders, and others are using GIS programs. Their tasks vary from keeping property ownership up to date for tax purposes to unifying maps used by different government departments so as to avoid tearing up freshly paved streets to repair utility lines. Commercial uses of GIS are even more wide-ranging. Examples: -- Oil companies such as Shell and Amoco are putting it to work processing ever-changing lease maps, making three-dimensional geological models, and finding optimum locations for gas stations in developing areas. -- Pennsylvania Power & Light is creating new meter maps and helping prospective business customers find suitable building sites.

-- Coca-Cola, Frito-Lay, UPS, and Federal Express use GIS to direct their trucks along the fastest possible routes. -- Yellow Cab of Tampa, Florida, enters the addresses of customers who telephone for a taxi and then transmits a code to its drivers, to avoid interception of fares by competitors. -- The feed division of Hubbard Milling in Mankato, Minnesota, employs GIS to estimate the amount of feed the company can sell in a 12-state area, based on animal populations and average consumption of each species by county. Thorell of Dataquest puts last year's worldwide GIS hardware and software volume at $282 million, about half of it in the U.S. She sees the market reaching $590 million by 1992. The growth rate could rise to 35% a year, she predicts, if the use of IBM and Apple personal computers for GIS accelerates as expected. POWERING the most sophisticated GIS applications more often than not is software supplied by a small, fast-growing, privately held company called Environmental Systems Research Institute (ESRI) of Redlands, California. IBM has just begun to resell ESRI's programs for use not only on its PCs but on its workstations and mainframes as well. The software also runs on computers and workstations made by many other companies, including Apollo, Sun Microsystems, Data General, Digital Equipment, Hewlett-Packard, and Prime Computer. Widely viewed as the father of commercial GIS, Jack Dangermond, 43, ESRI's founder and president, is a Harvard-trained environmentalist who founded the company with his wife, Laura, 20 years ago using $1,100 in savings. ESRI has developed what is generally conceded to be the most advanced GIS program, Arc/ Info, which takes its name from a mathematical term and ''information.'' The software makes it possible to combine and manipulate geographical data from maps and numerical information about demographics or almost anything else that's pertinent. The company turned a profit from the start and now employs 350 people around the world. Sales reached $40 million in 1988, nearly double the year before. Among other suppliers of GIS systems are such smaller companies, also privately held, as GeoVision of Ottawa, Erdas Inc. of Atlanta, and Geographic Data Technology Inc. of Lyme, New Hampshire, whose products include software to integrate electoral and census information with mapmaking. It hopes to cash in on the nationwide redrawing of congressional and state legislative district lines that will follow the 1990 census. Catching up with Jack Dangermond's ESRI has become a principal preoccupation of competitors, which include Intergraph Corp. of Huntsville, Alabama, and Synercom Technology Inc. of Houston, both public companies. ESRI's rivals began as computer-aided design (CAD) or automated-mapping companies, which use computers to augment or even replace the painstaking hand work of cartography. Intergraph, already a relatively large and booming company (1988 sales: $800 million), seems particularly eager to strike it big in GIS. Like ESRI, Intergraph was started by entrepreneurs 20 years ago. Among the principal founders, who began the company with $60,000, were James Meadlock, 55, and his wife, Nancy, now an executive vice president. There the similarities between the two companies -- and the two men -- end. Kindly and eloquent, Dangermond runs ESRI with unusual concern for his employees. Professionals can set their hours and work at home if they want. Dangermond hopes that eventually GIS will help save the world from environmental destruction. Says he: ''Sometimes I have these fantasies of giant rototillers going across the landscape digging huge surface mines, the tropical jungle being obliterated, all the timber being cut in Nepal. How can we begin to get a handle on this problem as planners, analysts, rational people?'' < DANGERMOND IS PROUD that the United Nations Environmental Program has used ESRI software to study the decline in the number of African elephants. The study concluded that unless poaching and encroachment on their terrain are soon stopped, the big beasts will become extinct by the year 2000. He adds that ''at the other end of the scale, if some guy in a small city is able to make a better decision about where to locate a fire station, or the people at Exxon are able to discover oil with less unpredictability -- when you see that kind of application, it really gets you excited. I love business. I love to make things work.'' Blunt-talking Jim Meadlock is unlikely to have nightmares about rototillers roaming the world. He used giant bulldozers to level part of Intergraph's 400- acre campus on the outskirts of Huntsville. Twenty years ago, working for IBM, Meadlock was in charge of software development for the Apollo moon mission at the Marshall Space Flight Center in Huntsville. Now, in the shadow of that center, he has constructed 23 sprawling buildings, where 5,000 people work. His tightly organized company, with 7,000 employees worldwide, has a hammerlock on providing automated-mapping equipment for military agencies in the U.S. and abroad. AUTOMATED MAPMAKING is the first step in GIS. Atlas publishers and mapmakers like Hammond and Rand McNally are switching over to the new, computerized approach. First, just as all GIS users do, they must go through the painstaking and often costly process of digitizing existing maps, assigning coordinates to streets, buildings, rivers, and other features so the information can be stored in a computer. Some already digitized geographical data can also be bought from federal agencies, principally the U.S. Geological Survey, and from private companies like Etak Inc., of Menlo Park, California. Etak is the pioneering producer of navigational maps for automobiles and trucks that move as the vehicle does, displaying streets and intersections coming up; it has licensed its map displays to General Motors, as well as to European and Japanese companies, and expects GM's luxury cars to be equipped with its moving maps in about two years. Mapmakers also get up-to-date information from aerial and satellite imagery. The French SPOT satellite pictures, finer in resolution than those provided by the U.S. Landsat, are catching on with GIS users particularly fast. ONCE THE COSTLY, time-consuming, and occasionally error-prone digitizing is done, it's relatively easy to keep maps current. An Erdas system used in conjunction with Arc/Info typically allows a user to superimpose on a satellite image a digitized map of the same area. An operator can then update the map simply by entering the features of, say, a new subdivision that occupies a once-empty space onto the digitized map with a cursor pen. An updated new map can then be printed out on the spot. To keep the database up to date at Potlatch, foresters gather information on each timber stand and pass it on to the GIS operators. The foresters will soon be equipped with hand-held data acquisition devices much like those used to keep track of inventory in grocery stores. Says Stephen H. Smith, inventory systems manager: ''Our stands are changing every day. Harvesting is going on all the time. We're always planting trees and building new roads.'' For larger users it still takes knowledgeable and well-trained personnel to install and operate a GIS system. But inexpensive, simplified versions are beginning to appear. In Tacoma detectives and firemen run them. The city began in 1975 by entering the coordinates of 80,000 land parcels and streets into its GIS database. City officials are delighted with their new ability to keep instant track of changes in property assessments, which improves their estimates of future tax revenues. The police department charts burglaries and other crimes; it can spot developing patterns quicker than it used to. Tacoma firefighters are cutting response time by shifting the deployment of equipment. The municipally owned water company plans to optimize meter-reading routes and make it easier to locate electric meters and also to find water shut-off valves in emergencies. Savings could easily amount to hundreds of thousands of dollars a year. What pleases Donna Wendt, a systems analyst who works with Tacoma's GIS, is that key users in many city departments are profiting from the system. Says Wendt: ''We're accomplishing more work and turning out better map products.'' More and more corporations are discovering GIS. ESRI already counts more than 20 FORTUNE 500 companies among its Arc/Info users, and Dangermond foresees a major expansion in the corporate world this year. Along with software that runs on Macintosh and IBM personal computers, the emergence of faster, less expensive workstations equipped with better graphics and more capacious memory is speeding the spread of GIS. Optical disks in particular now allow storage of massive amounts of geographical and digital data. DeLorme Mapping Co. of Freeport, Maine, sells a world atlas on an optical disk. Selected areas can be called up on a computer screen, and the viewer can zoom in on specific locales with a resolution of three feet, making an object the size of an automobile easily discernible on the screen. SOON COMPANIES may simulate responses to challenges from competitors, expanding the systems' usefulness by combining databases that contain ever more detailed commercial data with all the sophisticated geographical resources of GIS. ''It's an exciting idea,'' says Thorell of Dataquest. ''In a future corporate war room you would have a huge flat panel display hooked up to a very fast computer capable of displaying customer, competitive, and other information.'' Could a competitor make a lower bid, for example, because his materials storage sites are more strategically located? Geography has come a long way since you memorized the state capitals for Miss McGonagle in the fifth grade.