Improving ‘Service’ in the broadest definition of the term has historically been taken to mean optimization through centralization. The Business Disruption introduced by the Internet of Things, IoT, introduces new types of Smart Services and responsiveness achieved by decentralized autonomous interactions providing individually optimize responses. This may be counter-intuitive to some views of a Smart City as achieving new levels of centralization to optimize management.
Examining how Smart Services and users create a Smart City is an instructive example for Enterprises in how they must consider a similar adoption path. Starting with the Technology definition of IoT as an Inter Connected Interactive world of Intelligent Devices operating Autonomously, to understand how Business Value is created through Smart Service incorporating these new technology capabilities.
An easy example of how Autonomous actions create localized benefits for Users can by found in traffic speed monitoring by GPS units in cars. A traffic jam on the selected route promotes individual responses as each driver decides on their own reaction. Some choose not to react and wait in the traffic jam; other drivers will embark on a detour; some using their personal local knowledge, a further group will follow the option suggested by their GPS. The result will usually result in the most obvious detour routes, in turn, become blocked, and a larger and larger area gridlocking as time passes.
The limitation of the current Service for Traffic Service is that it is a passive service, not capable of the continuous intelligent interaction and management that differentiates an IoT Smart Service Traffic Service. Each car is individually maintaining a two-way quasi real time dialogue with all other cars within the localized Traffic Smart Service cell to optimize the use of available road space and routes. The sheer amount of data traffic involved between the Traffic Smart Service Event Engine and the cars, with the response times required to maintain real time traffic flows, require this to be a decentralized service. However, the Smart City would contain many such localized Traffic Smart Service cells, or in IOT terminology Fog Computing zones.
A IoT based Smart Service Traffic Management, as with many other forms of Smart Services, gains much of its ‘smart’ responsiveness and value to citizens through their real time participation in localized situations. The challenge is to design and deploy Smart Services that encourage citizen participation around very direct localized responsiveness.
The full value of a Smart City, or an Enterprise lies in the extent to which different, but aligned, Smart Services interacting to provide a further level of unique insights and values. Connecting the Smart Service Traffic Management similar Smart Services covering Traffic Lights, Routing Smart Signage, Public Transport, etc. has an almost logarithmic capability to multiple the insights and values created. In IOT based Smart Services scale is achieved, as with the Internet itself and the Web, by the decentralized architecture, but it is the careful aggregation of interactive Smart Services that makes the City become ‘Smart’.
In addition to the challenge of deciding what Smart Services will be well received to maximize participation with perceived value to the City and Citizens there are some very real concerns for the City Management in the costs of operating Smart Services. IT budgets remain stretched, the cost of operating a further layer of Technology is difficult to justify with out strong benefits.
At the heart of Smart Service business models is the shift from CapEx, Capital Expenditure with an identified payback, to OpEx, Operating Expenditure where the over the last five years Marketing operations have shown a very different approach. Budgets should flex to follow success and cut off poor results…quickly. More of what works meets the criteria of ‘More (Value) for Less (Cost) common in the public sector.
The Private sector has led in making the shift to OpEx through its experiences in adopting and monitoring Social Marketing Campaigns where results are immediate and quantifiable. Social Marketing and IoT Smart Services have much in common, increasingly IoT events are being tied to Social Marketing reactions, therefore it is instructive to consider Social Marketing OpEx experience.
Five years ago Marketing was seen to be a necessary fixed annual investment budget item but with the understanding that the value was difficult to quantify, (truism at the time; ‘half of all marketing is wasted, but which half?). Today micro marketing using decentralization/localization provides immediate quantification of value; the result is that more of the Budget has become flexibly allocated to increase expenditure in successful areas and decrease elsewhere.
Using the same model defined by citizen satisfaction in traffic flow management requires more of the annual fixed CapEx Traffic budget moving to a more responsive OpEx model where increasing knowledge of successful Smart Service outcomes dictates where the money should be spent. Increasing expenditure against high value returns and decreasing expenditure on less successful initiates is the goal for any Smart Service deployment business model.
Underlying any Smart City, or Enterprise, contemplating exactly what Smart Services to deploy are increasingly selective Citizens or Users who after a generation of Smart Phone Apps are now vocal in their expectations. Good Apps, or Smart Services such as Uber quickly go viral, and just as quickly poorly thought through Apps, or Smart Services, are panned.
Competition between Smart Services, whether Public or Private Sector, will more closely resemble a Financial Trading market where event data feeds, evaluation and time to respond, are the difference between success and failure. The battle between City centralized licensing management of Taxi Services and Uber as an example is a fore taste of what is to come! Smart Cities will find difficulty in continued control of centralized services in the rapidly emerging world of IoT; a future of highly responsive, high value , locally optimized, Services that rely on User support for much of their value generation capability.
Grasping the difference between IoT based Smart Services, and classic Services that have been moved to Web based access, is a critical point in the journey of making a City, or an Enterprise ‘Smart’. The frequently applied term ‘Business Disruption’, or books such as ‘Digital to the Core’ do not refer to the use of current online Web eCommerce, accepting that as both an expectation and a fact of life in 2015. Instead these terms, books, reports, and of course social discussions, are all drawing attention to the impact of a fully connected, interactive, intelligent world of IOT Devices offering a new generation of localized autonomous Smart Services.
The current, and predicted, numbers of connected intelligent devices capable of participation in Smart Services vastly outstrip the resources the City has to deploy its own IoT devices. A successful Smart City is created by its vision as to how its City Smart Services will work with its Smart Citizens and Smart Enterprises to create a wholly new generation of value… for the City, its Businesses and its Citizens.
Though there is a dependency on decentralization for across the City success this does not preclude National or Local Government leading, and encouraging, Smart Services in their own Cities. Quick wins on current programs to reduce cost and improve efficiency are readily available in areas such as Building and Energy management, or any other Asset Management covering equipment from Gritting Equipment to Rubbish collection. There is much to be gained commercially as well as in experience from these deployments in more familiar commercial areas that will assist in providing leadership in a wider range of City activities.
The big challenge is to ensure the introduction of Smart Services of a decentralized open nature to encourage other providers and users to participate. Travel and Transport or other infrastructural based areas are natural starting points for any City Management, but imagination is needed to gain the attention, innovation and participation from Citizens and Businesses to create the connected, interactive, intelligent city wide economy that justifies the title Smart City.
An Example of some innovative ideas for Smart City Services