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A smarter route to smart cities

A smarter route to smart cities

Everyone wants to live in a smart city. And every city manager wants to run a smarter city. No wonder: 'smart cities' hold the promise of unprecedented city service delivery and efficiency. They allow citizens - the ultimate 'customers' of city services - to engage with their city and infrastructure in new and valuable ways. They provide city planners and managers with reliable insights and flexibility. They encourage innovation, growth and inclusiveness.

Perhaps not surprisingly, cities around the world are pouring investment into new technologies. From new smart meters and IoT-enabled devices that lead to improved measurement and billing models through to intelligent traffic lights and Augmented Reality devices that unlock more effective service delivery, municipalities around the world are virtually exploding with new tech. But are cities really becoming smarter or just more technologically advanced?

Knowing how to improve

The reality is that being a smarter city is not about having the latest technologies. It's about how those technologies are leveraged to improve service efficiency and effectiveness. It's about enhancing the value of city services for citizens. And it's about finding new ways to respond to increasing service demand and shifting expectations.

The problem, however, is that few cities seem to have a clear understanding of their current service efficiency and effectiveness. Many cities suffer massive information gaps that severely limit their ability to develop any real or reliable insights about their service delivery.

Some of these gaps are understandable; measuring exactly how many citizens use city parks on an annual basis is notoriously difficult. But other data (basic measures like the number of lane kilometers of road in a city) are often just not collected or measured. Those that do collect consistent information tend to roll their measurement up to the departmental or divisional level, thereby forsaking any of the real insights that could come from understanding these measures on a service-level.

Even when cities do collect the right information, very few have any real idea of what 'good' looks like when it comes to service efficiency or effectiveness. There are no consistent global benchmarking systems that compare efficiency and effectiveness across countries and city service areas. There is no 'Big Book of Great Ideas' for cities.This is not surprising. Benchmarking city efficiency and effectiveness is a tremendously difficult and time-consuming exercise. In part, this is because no two cities measure the exact same things in the exact same way. But it's also because each city faces a very different environmental, social, political and economic reality. And that has a direct impact on their specific costs and capabilities.

As a result, most city managers are left making major decisions (often with significant intergenerational impacts) based on little more than experience, outdated models and 'gut feel'. And that means they have little real insight into how their technology investments are actually making their cities 'smarter'.

Give them data

In today's environment, what city managers really need is better, more reliable and fresher information. That will enable city managers to understand where improvements can be made, allowing them to direct investments towards projects and technologies that can demonstrate and enable improved efficiency and effectiveness.

Better information will also allow them to become more strategic change agents. Imagine the rich and informed debate that could be had when citizens understand the actual cost of keeping their roads in a certain condition. Or when decision makers are educated on the precise relationship between budget items and service outcomes. Or when city managers finally get a clear and reliable picture of future demand expectations. But that will require reliable data, smart analytics and a strong benchmark of historical performance and efficiency - something few (if any) cities possess.

A few months ago, KPMG International released an ambitious report that aimed to lay the foundation for future city service benchmarking Benchmarking city services: Finding courage to improve. Working in partnership with 35 cities around the world (representing almost all geographic regions and sizes), we set about creating efficiency and effectiveness measures across 12 distinct city service 'groups' - key areas such as road access, transit, drinking water supply and garbage collection. We then plotted our participants' data in a way that allowed them to - for the first time - reliably compare their relative performance across various city service areas.

What we found was that the leading cities were not those that had implemented a specific technology or platform, but rather those that viewed technology enablement as part of the wider effort to transform city service delivery, efficiency and effectiveness.

In some cases, this may mean going beyond the point solution to uncover new opportunities for value creation. In Toronto, Canada, for example, the introduction of automated and smart water meters has allowed the city to shift to a much more dynamic and transparent billing model and, as a result, complaints about water meter issues have significantly declined.

In other cases, it may mean using technologies in order to better engage citizens with city services. In Brisbane, Australia, city waste diversion managers launched the 'Brisbane Bin and Recycling App' which not only provides important information to residents, it also includes a fun online recycling quiz and encourages customers to order larger recycling bins. This has not only led to higher engagement levels, it has also allowed the city to postpone expected service level increases.

Or it may simply mean creating the right environment for innovation and growth. In Philadelphia, United States, city managers created the Capital Consortium and Biz Coach programs to help small, primarily minority-owned, neighborhood-based businesses access new capital. In 2016, the Department of Commerce distributed nearly US$1.5 million in business loans through various programs. And this has helped create an ecosystem of growth businesses that, in turn, are driving new investment, ideas and technologies into the city.

Getting smarter about smart cities

So what will it take to drive real value for citizens from government technology investments? Our research and our experience suggest there are four main actions city managers and decision-makers can take to start getting smarter about their technology investments.

1. Improve your data and analytics. For the short term, the focus will simply be on identifying, supporting and reporting the right efficiency and effectiveness measures. In the medium term, however, cities will need to align and integrate these data points to provide a much more holistic and realistic view of actual performance.

2. Find out what 'good' really looks like. This will require city leaders to start to develop a clearer picture of how they have been performing in the past and where improvements can be made. The challenge for city leaders will be to create greater consistency in the way city services are measured and reported. Not only between cities but, critically, across city services as well.

3. Promote a culture of data-driven decision-making. Focus on creating a culture where data and analytics underpins all civic and municipal services. Decisions should be based -- not solely on historical data and experience -- but also on real-time operational metrics and accurate demand predictions. City managers should use this data to understand exactly how to influence efficiency and effectiveness measures to meet their objectives.

4. Apply significant leadership. The shift to data-driven decision-making will likely lead to some uncomfortable discussions as the opacity of 'gut feel' is replaced by the transparency of empirical evidence. New models and efficiency gains will require old models to be disrupted. City employees and politicians alike will need to learn to operate in a more evidence-based decision-making environment. And all of this will require clear vision, strong leadership and a willingness to drive real change.

The reality is that nobody truly knows what the future will hold and how cities, citizens and governments will respond. What we do know, however, is that citizens will continue to demand more effective and efficient city services. We know that governments will need to make difficult and long-lasting decisions about where to invest tax dollars. And we know that new approaches and new innovations will continue to disrupt the status quo.

In this environment, being a smarter city is not about technology. It's about understanding, managing and influencing your efficiency and effectiveness in a way that delivers smarter services and greater value. That's the smarter route to smart cities.


Article author: Alan S. Mitchell, Executive director, KPMG in Canada