Business Strategy: IDC Government Insights' Smart City Maturity Model Assessment and Action on the Path to Maturity

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1 Business Strategy: IDC Government Insights' Smart City Maturity Model Assessment and Action on the Path to Maturity IDC Government Insights: Smart Cities Strategies Worldwide Headquarters: 211 North Union Street, Suite 105, Alexandria, VA 22314, USA P F BUSINESS STRATEGY Ruthbea Yesner Clarke #GI IDC GOVERNMENT INSIGHTS OPINION Cities are facing a perfect storm of economic, environmental, and demographic challenges today in which rising urban populations are exacerbating existing urban problems and straining resources in the context of uncertain economic times. Citizens' high expectations for services delivery and the need for sustained tourism and business development are pressing cities to consider the opportunities afforded by emerging technologies. Navigating transformative change, as is required by Smart Cities, is a long-term and complex process. Cities need to be able to assess their current situation and determine the critical capabilities needed to enable a Smart City. To help cities address these issues, IDC Government Insights has created a Smart Cities Maturity Model defining the key technology- and nontechnology-related areas for assessment. IDC Government Insights' Smart City Maturity Model is a framework of stages, critical measures, outcomes, and actions required for organizations to effectively advance along the successive stages of competency toward data- and event-driven decision making. This Smart City Maturity Model will enable your city to: Begin to assess its Smart City current competency and maturity Define short- and long-term goals and plan for improvements Prioritize technology, partnership, staffing, and other related investment decisions Uncover maturity gaps among departments, business units, or between functional and IT groups April 2013, IDC Government Insights #GI IDC Government Insights: Smart Cities Strategies: Business Strategy

2 TABLE OF CONTENTS In This Study 1 Methodology... 1 Executive Summary... 1 Situation Overview 3 The Approach 4 Stages in IDC Government Insights' Smart City Maturity Model... 4 Future Outlook 10 Short-Term Smart City Trends Long-Term Smart City Trends Essential Guidance 14 Actions to Consider Learn More 19 Related Research P #GI IDC Government Insights

3 LIST OF TABLES P 1 IDC Government Insights' Smart City Maturity Model Overview IDC Government Insights' Smart City Maturity Model Framework IDC Government Insights' Smart City Maturity Model Impact/Guidance IDC Government Insights #GI240620

4 LIST OF FIGURES 1 Where Are Cities Today? Smart Cities in the Next 24 Months Unequal Time and Effort Required to Move Through the Stages of Smart City Maturity IDC Government Insights' Smart City Maturity Model Gap Analysis Against Industry Benchmark IDC Government Insights' Smart City Maturity Model Gap Analysis by Function, Line of Business, or Department P #GI IDC Government Insights

5 IN THIS STUDY Methodology In this report, IDC Government Insights identifies its Smart City Maturity Model, which identifies the stages, key measures, results, and actions that are required for cities to effectively move through the stages and progress toward the long-term goal of becoming a Smart City. This framework is for cities defined loosely as local governments including towns, cities, municipalities, and provinces that want to realize the benefits smart solutions can have on lines of business and cities as a whole. By identifying the high-level critical measures, attributes, necessary actions, and resulting impact in each stage, city leaders can begin to set a road map for their Smart City progress, benchmark themselves against peers, and understand the investment and other factors that enable and inhibit progress on a path to maturity. The goals of Smart City leaders are to develop and/or revitalize their city in sustainable ways while differentiating their city from nearby and global competitors other cities that are also seeking to attract business investment and a talented pool of residents. This model is a guide that will enable cities to provide better services and improved outcomes to citizens and businesses. Executive Summary The growing focus on Smart City solutions as a basis for sustainable economic development is both an opportunity and a challenge for most local governments. The promise of transformational business processes that position cities to provide improved citizen services and meet rising citizen expectations has pushed technology innovation to the top of the CIO agenda. In this environment, emerging technologies like Big Data and analytics, cloud, social business, machine-tomachine automation, visualization tools, and mobility unlock citizen and employee access to information that forms the basis of the Smart City. Cities are complex ecosystems. Navigating transformative change, such as required by Smart Cities, is a long-term and complex process. Cities need to be able to assess their current situation and determine critical capabilities needed to enable a Smart City. However, many cities are unsure of how to begin addressing the decisions that need to be made in technology, staffing, and process to deploy Smart City capabilities pervasively across the city. The plethora of technology choices and range of technologies and management skills required make it difficult to prioritize project resource allocations IDC Government Insights #GI Page 1

6 To help cities address these issues, IDC Government Insights has created a Smart Cities Maturity Model defining the key technologyand non-technology-related areas for assessment. By identifying the high-level critical measures, attributes, necessary actions, and resulting impact in each stage, city leaders can begin to set a road map for their Smart City progress, benchmark themselves against peers, and understand the investment and factors that enable progress on a path to maturity. Additionally, city leaders will be able to use the Smart City Maturity Model as a tool to develop a common language, improve intra- and intergroup collaboration in defining and executing a Smart City strategy, and promote and encourage the use of Smart City solutions. Table 1 provides an overview of the five stages of the Smart City Maturity Model, the key characteristics of each stage, and the goals and benefits of each stage. TABLE 1 IDC Government Insights' Smart City Maturity Model Overview Ad Hoc Opportunistic Repeatable Managed Optimized Key characteristic Siloed Ad hoc project, departmentbased planning, and discrete smart projects Intentional Proactive collaboration within and between departments Integrated Recurring projects, events, and processes identified for integration Operationalized Formal systems for work/data flows, leveraging technology assets, in place and standards emerging Sustainable A sustainable, citywide platform providing agile strategy, IT, and governance for an integrated system of systems Goal Tactical services delivery Stakeholder buy-in Improved outcomes Prediction and prevention Competitive differentiation Outcome Technologyenabled project successes Foundational governance and strategic planning Culture shift, rationalized and leveraged assets Adaptive senseand-respond systems Agility, innovation, and continuous improvement Source: IDC Government Insights, 2013 Page 2 #GI IDC Government Insights

7 SITUATION OVERVIEW Cities traditionally operate in a highly fragmented state with budgets, governance, decision making, IT platforms, and information handled by individual departments. The result is that IT strategy, investment, and the processes that support services delivery are inefficient when viewed in a systemic citywide operational context: multiple data sets and applications exist in different departments, relevant information is not shared, and operations are not coordinated beyond emergency protocols or when required for special events. And despite the desire by many city workers to improve and change, it is difficult for cities to overcome risk-averse cultures and procurement processes that make experimentation and innovation a challenge. Demographic and technology trends are now creating a pressing need for cities to rethink how they use and leverage IT and existing infrastructure as well as resources like government workers, citizens, and community and business groups. With UN projections of a 72% increase in urban populations through 2050 and rising concerns over sustainability (with cities consuming 50 60% of resources and contributing 60 80% of greenhouse gases), cities must rethink their current operations. City infrastructure is already strained, and services delivery cannot keep pace with need. The financial woes of many central governments are also affecting cities as funding for local projects is reduced. To make matters worse, the expectations of businesses and citizens are rising to include anywhere, anytime mobile access to information and services and the ability to interact directly with government via apps and social media. These factors, coupled with the opportunities that emerging technologies like Big Data, analytics, machine-to-machine communications, GIS, and social media afford, are pushing cities to adopt Smart City models of transformation and IT investment. The questions many cities are asking are, "Where do I begin in a Smart City transformation? What is the process for change? And how do we assess ourselves and plan our future strategy for IT investment?" IDC Government Insights' Smart City Maturity Model provides a method for assessing progress and a planning tool for adopting Smart City technologies and practices. IDC Government Insights takes a broad view of what a city is it can be a district, town, city, county, metropolitan area, city-state (such as Singapore), or even a port, military base, or university campus. Our definition of a Smart City is a finite entity with its own local governing authority that uses emerging ICT and instrumentation technologies to achieve the explicit goals of improving the quality of life of its citizens and sustainable economic development. These goals are achieved via improved service delivery, more efficient use of resources (human, infrastructure, and natural), and financially and environmentally sustainable practices that support economic development. The definition of a Smart City, in our view, is a finite unit or entity with its own governing authority that is more local than the federal or national level and that uses a specific set of technologies to achieve the explicit goal of improving the lives of its citizens through sustainable development IDC Government Insights #GI Page 3

8 Smart City solutions integrate information and operations within and between city systems and domains. Smart Cities are those cities that leverage these technologies and adopt a new platform for growth, and IDC Government Insights believes that Smart Cities will leverage technology to create a new platform for service delivery and ultimately offer a better quality of life for residents and a better environment for businesses. For a full description of the attributes of Smart City solutions, see Business Strategy: Smart City Strategies IDC Government Insights' Smart City Framework (IDC Government Insights #GI234160, April 2012). THE APPROACH Stages in IDC Government Insights' Smart City Maturity Model Cities progress through common phases as they create a Smart City system. IDC Government Insights' Smart City Maturity Model identifies and describes the five stages and the key attributes of each phase. It is typically the case that different departments or agencies within a city will be at different levels of maturity in terms of their own processes and operations. This model can be used to assess coordination and integration across departments and agencies or for the city system as a whole in addition to assessing a single department. The five stages of the Smart City Maturity Model are: Ad Hoc: This stage is the traditional government modus operandi with ad hoc projects, department-based planning, and discrete smart projects. The goal of the Ad Hoc stage is to begin to prove the value of the Smart City concept and develop the business case via demonstrated ROI from pilot projects. Projects typically focus on key areas of need in focused city functions such as Smart Water or Smart Parking. Opportunistic: Opportunistic project deployments result in proactive collaboration within and between departments. Key stakeholders start to align around developing strategy, common language is developed, and barriers to adoption are identified. The goal at the Opportunistic stage is to engage key stakeholders and get their buy-in as the strategy and road map for Smart City initiatives are developed. Page 4 #GI IDC Government Insights

9 Repeatable: In this stage, recurring projects, events, and processes are identified for integration. Formal committees document defined strategies, processes, and technology investment needs with stakeholder buy-in. Sustainable funding models and governance issues become a focus. The goal of the Repeatable stage of maturity is improved outcomes and service delivery as a result of repeatable standard processes for Smart City projects and their coordination beyond the department level. More formalized processes develop measures of both outputs and outcomes to determine success of the initiatives. Specific initiatives begin to be scaled and integration begins. Better use of information and the processes in place to respond to events drives improved outcomes and service delivery. Managed: Formal systems for work/data flows and leveraging technology assets are in place and standards emerge. Performance management based on outcomes shift culture, budgets, IT investment, and governance structure to a broader city context. The goal of the Managed stage of maturity is for cities to be able to predict the needs of their residents and businesses and provide preventative services before problems arise. Optimized: A sustainable citywide platform is in place. Agile strategy, IT, and governance allow for autonomy within an integrated system of systems and continuous improvements. Superior outcomes deliver differentiation. The ultimate goal of the Optimized Smart City is competitive differentiation that drives sustainable economic development or revitalization by creating jobs and attracting investment. Mature Smart Cities will attract business investments, visitors, tourists, and citizens because they provide high-quality citizen services, are easy to do business with, and offer a higher quality of life. Within a Smart City, there are key dimensions, or measures, that need to be addressed in order to make the Smart City concept fully operational. Many of these are not technology-related measures since the largest challenges that cities face are related to people and process. Entrenched culture, siloed budgeting processes, local bylaws and governance structures, and outdated ways of measuring success all must change to fulfill a Smart City vision; however, each city defines itself. We have defined the following measures and their corresponding attributes as key for the Smart City Maturity Model: Strategy: The Smart City strategy defines the Smart City's intent; the Smart City's vision for the city, including sustainability and 2013 IDC Government Insights #GI Page 5

10 economic development goals; and how each city plans to capitalize on its strengths and unique qualities while addressing its weaknesses. Part of any Smart City strategy should include a systemic and coordinated future vision for city operations. Also included in strategy is the development of the business case for Smart City initiatives as promoted by lead sponsors of Smart City projects that move Smart City strategy forward along the stages. These leaders typically include mayors, CIOs, and/or community and business leaders. Culture: Culture refers to the culture of innovation and citizen engagement within a city. Cities tend to be risk averse not only because typically their resources are very scarce but also because failure can have big career implications and impact citizens in very real ways. This measure assesses how cities can become more experimental and innovative and use emerging technologies and new ideas to solve long-standing problems. Citizens (including community and business leaders) offer an untapped source of talent and ideas. Citizen sourcing for mobile app development, crowdsourced operational information, and new ideas is now possible using social networks and mobile devices. This measure considers how your city is going to capitalize on the resources of your citizens. Process: Process measures two key enablers of successful change governance and partnerships. Governance measures the structure for implementing change at the city level from organizational structures to budgeting processes to how performance is measured and success is defined. Partnerships are very important to Smart City development because collaborations with ICT vendors, academia, private industry, and citizen groups are necessary to not only deploy smart solutions but also create innovation ecosystems for using emerging technologies. Technology: Technology measures the adoption and penetration of ICT infrastructure and related technologies as well as the development of the Smart City enterprise architecture. Smart Cities function on an IP-enabled backbone, and a robust telecom infrastructure is required. Additionally, advanced and intelligent sensors, cameras, and other devices are needed as data collection points, leading ultimately to more efficiencies via M2M and automation as well as providing the data for advanced analytics. The performance and function of these technologies in the context of legacy systems and legacy enterprise architectures are important as technology assets need to be shared and integrated across the city for better government service delivery. Data: Data measures how data is used and accessed. Open data is a big component of the Smart City movement, and citizens are expecting more and more government transparency. Open data is also a strategy for crowdsourcing skills, particularly in areas like Page 6 #GI IDC Government Insights

11 app development. Smart Cities also rest on using Big Data and analytics to mine data for predictive and preventative resource allocations and processes. These solutions rely on clean and accurate data. Cities have a wealth of data in their current systems as well as a flood of new data coming into systems every day; it is imperative that this data is cleansed, processed, integrated, and analyzed so it can be used optimally. Real-time data must be displayed using dashboards, GIS, and other visualization tools for improved decision making. Table 3 illustrates the IDC Government Insights' Smart City Maturity Model framework. TABLE 2 IDC Government Insights' Smart City Maturity Model Framework Ad Hoc Opportunistic Repeatable Managed Optimized Strategic intent (vision, business case, leadership) No strategy or vision exists Business case undefined Leadership targets discrete areas for investment Strategy is at the department level Business case developed via demonstrated ROI from pilot projects Desired outcomes and goals defined Leadership engages stakeholders Strategy spans and involves multiple organizations Business case applied across multiple projects or initiatives Formal documentation defines Smart City goals and outcomes Leadership and key stakeholders invest in projects with vision of long-term scalability Strategy is accepted citywide Business case applied citywide with widely accepted tools and processes for investment, ROI, and outcomes measurement Leadership provides budgeted and ad hoc funding Strategy is optimized and evolves based on continuous feedback Continuous progress on KPIs against mission-based performance Leadership is vested in holistic and broad-scale transformation of processes, culture, and operations 2013 IDC Government Insights #GI Page 7

12 TABLE 2 IDC Government Insights' Smart City Maturity Model Framework Ad Hoc Opportunistic Repeatable Managed Optimized Culture (innovation, citizen engagement) Government has no formal process to engage those with new ideas inside or outside of government Pockets of innovation exist within risk-averse culture Government experiments with citizen participation via social networks and mobile apps as a new channel Opportunistic innovation where there is departmentlevel support Government proactively engages citizens though partially personalized direct communications Innovation culture supported by processes that allow risk New projects that capitalize on 3rd platform technologies are funded Government uses multiple channels to engage citizens based on their needs Innovation is systematic to leverage ideas from citizens, government workers, and groups outside of government Government has cultivated engagement models that are inclusive, personalized, and multidirectional ongoing collaborations Innovation is institutionalized and managed within the whole city paradigm Process (partnerships, governance) Traditional clientprovider-supplier relationships managed by separate departments Governance is characterized siloed budgeting and decentralized decision making Government begins to test new models of engagement with partners Some multidepartment budgets and decision making based on projects Partnerships models evolve to include gain sharing, codevelopment There are stable joint committees that bring together highlevel officials to address Smart City needs Sustainable funding for initiatives is a focus area Partnerships aligned with long-term vision and multiple stakeholders coordinated Annual multiyear planning and budgeting for common programs, services, and infrastructures Partner ecosystem evolves to shared outcomes New combinations of programs are created based on optimal services provisioning Budgets allocated based on impact on the whole city Page 8 #GI IDC Government Insights

13 TABLE 2 IDC Government Insights' Smart City Maturity Model Framework Ad Hoc Opportunistic Repeatable Managed Optimized Technology (architecture, adoption) Architecture is decentralized and transaction based with duplication Inconsistent broadband/wireless infrastructure adoption Basic levels of instrumentation in strategic-localized areas Serviceoriented architecture (SOA) is achieved via consolidation of systems Adoption and buildout of wireless broadband, sensors, cameras, and advanced devices to meet specific project goals SOA is used pervasively as an open platform in development Focus is on decrease service time/maintenanc e costs with investment tied clearly to missions Broadband coverage and instrumentation is leveraged for multiple projects and goals across organizations SOA principles are complemented by event-driven architectures that are interoperable and agile Ubiquitous broadband coverage and instrumentation of physical city assets leads to real-time dynamic data outputs Open platforms, SOA, leverages technology investments across entire enterprise Intuitive infrastructure predicts and adapts for improved outcomes and services delivery Data (use, access) Data is underutilized and housed in disparate systems Access is limited to single organizations because of issues with data integrity, privacy/security, and integration Data integrity is more fully addressed as data is used in Big Data and advanced analytics projects Some data sets are opened to public Data becomes more widely shared across departments Data use is focused on maintaining quality for Big Data and analytics use cases Progress is made in accuracy and semantic consistency Open data becomes strategic to leverage skills and ideas from many organizations and citizen/ community groups Data is used to provide actionable information to further Smart City goals Advanced data analysis done for multiple purposes Data is all inclusive with fully operational data sharing among organizations and individuals inside and outside of government Data is used for predictive models for improved services; realtime data collection allows faster response for nonpredictable events Information is ubiquitous, open, personalized, and proactively delivered as desired Source: IDC Government Insights, IDC Government Insights #GI Page 9

14 FUTURE OUTLOOK The path to the Optimized Smart City Maturity Model is a long-term effort that will take years rather than months to achieve. Today there is sporadic adoption of Smart City solutions across cities, with only a handful of cities worldwide actively in the Opportunistic or Repeatable implementation stage. Most cities are focused on researching and evaluating use cases and vendor capabilities along with defining their vision of a Smart City and identifying barriers to adoption. Figure 1 shows where cities are today with more maturity in strategy and data measures and the least maturity in process and culture. Examples of thought leadership exist now in many cities (e.g., in Barcelona with its creation of the City Protocol and development of a city anatomy, in China with many cities announcing plans to become Smart Cities, and with international bodies like the European Union funding Smart City initiatives). Even more cities, particularly in the Western hemisphere, like New York, London, San Francisco, Chicago, and Boston, have adopted open data strategies where data is shared with citizens and groups outside of government. However, change in culture and process is much slower, sometimes even requiring changes in bylaws or procurement processes. Technology adoption is growing rapidly, especially in Big Data, analytics, social business, and mobility, as the platform for Smart City growth, which is reflected in Figure 1. FIGURE 1 Where A re C ities T oday? Source: IDC Government Insights, 2013 Page 10 #GI IDC Government Insights

15 Short- Term Smart City Trends In the next one to two years, there will be much more development in strategy, data, and technology, with culture and process still inhibitors to implementations at the Repeatable and higher stages of maturity: Strategy: As we see now, more city leaders like CIOs and mayors will openly state their plan to become a Smart City, though the specifics of the vision may not be fully developed. Departments will run focused Smart City projects, and the business cases will be heavily marketed by vendors, leading to more cities becoming aware of project benefits. However, despite bold vision statements and successful one-off projects, Smart City innovators will be frustrated by the slowness of progress for a variety of reasons, mainly around internal risk-averse cultures, governance issues, and the rigidity of engagement models with external partners. Culture: There will continue to be a small set of cities that are really pushing innovation and are early adopters. Other cities will look to these cities to learn key success factors. Civic innovation models will spread as cities like Boston make it a priority to share their experiences, and vendors, partners, and analyst firms also market their success. Citizen engagement will continue in terms of bringing ideas in from the community or using citizen-developed apps, but there will be major differences in its adoption by region and country. However, cities in all regions will begin to adopt mobile applications that let them source information from citizens. Process: In the optimistic view, progress will be made in partnership models. City leaders and the private sector will develop together to determine use cases and issues around sustainable business models. The key to moving Smart City projects forward will be developing business models to sustain programs and to find monies for reinvestment in new projects or project expansions. Smart vendors will realize they have to help cities find these models. Consulting companies will offer services to this end. Governance will be a limiting factor as changes to existing bylaws or structures take much longer. Technology: We will see continued rapid buildout of communications infrastructure and data-capture devices like cameras and sensors, especially in emerging economies. Cities with higher adoption and penetration of these technologies will start to take inventory of assets and think of how they can be leveraged across multiple projects and/or departments. The digital divide will continue to be a focus of concern, especially around citizen engagement. Architecture discussions will be in the theoretical stage, and progress will stall if standards don't emerge. Measures to assess performance will begin to change to outcomes 2013 IDC Government Insights #GI Page 11

16 as opposed to transactions, but these changes will prove challenging for softer goals. Data: Models around open data and transparency of data will be tied very much to culture (see the previous "culture" bullet point) around innovation and citizen engagement. Whether they are technically solid or not, many data and analytics IT-led projects will lack a connection to business goals, and a continued lack of sufficient IT and business collaboration will lead to slow adoption of solutions and difficulty in securing additional rounds of project funding. Most of the Big Data and analytic solutions deployed will incorporate multistructured data from multiple sources. Information management, governance, security, and privacy needs will command an increasing portion of the data management budget. Figure 2 shows the Smart City Maturity Model of cities around the world in the next 24 months. FIGURE 2 Smart Cities in the N ext 24 M onths Source: IDC Government Insights, 2013 It is worth pointing out, as shown in Figure 3, that it is not a steady and consistent march from one stage to the next. The move from Ad Hoc to Opportunistic takes less time and effort than the progression from Opportunistic to Repeatable, which requires significant effort to address how to scale and fund projects. Similarly, moving from Repeatable to Managed is a longer process, with process issues at the Page 12 #GI IDC Government Insights

17 forefront, but going from Managed to Optimized may take less time because all of the foundational strategic, process, and cultural issues will have been largely resolved. FIGURE 3 Unequal Time and Effort Required to Move Through the Stages of Smart City Maturity Source: IDC Government Insights, 2013 Long- Term Smart City Trends Strategy: Cities will develop their own particular brand of Smart City that highlights their unique strengths. We will see city branding much like that for commercial companies, and themes will develop within the overarching label of Smart City. We see this now with Resilient Cities, Eco-Cities, and Safe Cities, and they gave a taste of what is to come, with subcategories of Smart Cities developing. Culture: There will be more creation of innovation offices or egovernment offices at the enterprise level of government, and their role and the amount of influence they have should slowly increase. Citizen engagement will have a steep growth curve and may run the risk of backsliding if cities don't strive to keep engagement up with fresh apps, challenges, and open data sets. Emerging cities will struggle with how much to engage citizens, given the high cost of educating the public on the use of some 2013 IDC Government Insights #GI Page 13

18 services as well as the high cost of engagement (i.e., call center calls increasing as engagement increases). Process: Cities will begin to reorganize around outcomes and Smart City values. Areas that may have previously been handled distinctly, like parking and transportation or parks and transportation, will begin to be coordinated, especially where business groups are engaged with government leaders and in areas key for tourism. Successful vendors will have figured out a strategy to serve the tier 2 or midmarket cities and how to provide detailed account management for city clients. Technology: Governments will begin to better harness the rapidly growing information emitted or created from physical objects. Big Data applications will ensure that analytic functionality is made available to the largest possible number of customer-facing and operational employees as well as managers. Open and consensusset standards will evolve and emerge to ease technology risks and improve interoperability across the stack and across vendor solutions. Vendors will provide platforms for add-on development by partners and cities themselves. Increased strategic value of data as an asset will add additional pressure and scrutiny of a technology's country of origin as the risk of data loss or contamination increases. Data: A growing percentage of the population will opt to share behavioral, demographic, purchasing, financial, and other personal data, though there will be backlash in some cities over the nonvoluntary data collection of information, especially if there are data leaks or misuse. The use of data will progress in line with Big Data and analytic maturity and rests on policy makers, case law, and business pressures harmonizing data privacy and security provisions across regional jurisdictions, opening up opportunities for sharing and collaborations across government levels as well as functions. Big Data security, privacy, and analytic governance standards will be accepted internationally, and data will become a formally recognized asset class by accounting standards. ESSENTIAL GUIDANCE At this very early stage in Smart City development, it is important to use the model to develop clarity of vision, common language, and a strategic road map with key leaders and innovators in the city ecosystem. As many of the issues with cities are related to people, process, and culture, it is important to work toward a balance in maturity across measures since, as noted in the Future Outlook section, the inhibitors toward fully optimized benefits are related to slower maturity in process and culture. Page 14 #GI IDC Government Insights

19 To progress along the stages of the Smart City Maturity Model, we recommend: Using this model to socialize the idea of Smart City transformations to those leaders that are open to innovation and are change agents within the city Focusing on each of the five measures of the model and ensuring that there is a coordinated progression along all of the five measures as opposed to becoming much more mature in one area, which ultimately inhibits overall progress Using a set of KPIs or performance measures to define the success of each stage (IDC Government Insights is working to develop this Smart City Index.) Actions to Consider The following guidelines set to specific timelines maximize the benefits of the Smart City Maturity Model: Now: Assess the business and IT Smart City "as is" situation. Identify opportunities to use existing data, technology, workers, and citizens in new ways. Explore opportunities to use new lowcost public cloud and open source options as they emerge, including citizen sourcing of app development. Identify relevant innovation, leadership, technology, and analytics skills among existing staff and vendors. Experiment with proof-of-concept and prototype projects. In the next one to two years (the next budget cycle): Use early quantifiable wins to demonstrate potential and justify budget allocations. Evaluate the existing technology and its shortcomings. Assess skills gaps and plan to hire and/or externally source professional services. Identify business sponsors and champions that will support and promote Smart City projects. Expand projects and begin to define architectural standards. Begin governance and performance management discussions. Visualization is a helpful tool for assessing the Smart City Maturity Model and will yield the following benefits: Baseline identification of competency in each of the five measures of the model (see Figure 4) Comparison against the industry benchmark to identify gaps and the desired status within a given time frame (Note that IDC is working on collecting such industry benchmarks [see Figure 4].) 2013 IDC Government Insights #GI Page 15

20 Comparison of maturity assessments and identification of maturity gaps among business groups and between business and IT within a single organization (see Figure 5) Table 3 provides guidance related to IDC Government Insights' Smart City Maturity Model. FIGURE 4 IDC Government Insights' Smart City Maturity Model Gap Analysis Against Industry Benchmark Note: The data depicted is for illustrative purposes only and does not represent results from any one organization. Industry benchmark data is being collected by IDC and will be available in future Smart City Maturity Model documents. Source: IDC Government Insights, 2013 Page 16 #GI IDC Government Insights

21 FIGURE 5 IDC Government Insights' Smart City Maturity Model Gap Analysis b y Function, Line of Business, or Department Note: The data depicted is for illustrative purposes only and does not represent results from any one organization. Source: IDC Government Insights, 2013 TABLE 3 IDC Government Insights' Smart City Maturity Model Impact/Guidance Stage Guidance Ad Hoc Outcome: Proof of Smart City concept and business case development via demonstrated ROI from pilot projects Invest in pilot/experimentation projects in a specific domain that will provide a monetary ROI. Engage LOBs and city leaders for executive support for initial projects and to begin strategy discussions across organizations. Identify change agents and innovators within government and the community for future innovation and engagement activities. Identify barriers to adoption, such as inconsistent broadband infrastructure or a lack of available skills sets. Use social media and mobile apps to engage with citizens and community groups IDC Government Insights #GI Page 17

22 TABLE 3 IDC Government Insights' Smart City Maturity Model Impact/Guidance Stage Guidance Opportunistic Outcome: Cross-organizational deployments and development of foundational strategy and governance Repeatable Outcome: Repeatable success in project process and outcomes across multiple organizations Managed Outcome: Enterprisewide strategy, process, data, and technology bring improved service delivery via adaptive and sense-and-respond systems Look to invest in buildout of pilot projects across departments or organizations. Identify high-priority areas that will continue to bring measurable and public results. Use data scientists to uncover new insights from pilots. Start to document long-term desired outcomes and goals with multiple stakeholders. Utilize specialized technology partner-supplied resources until staff requirements mature. Open data sets to the public and foster data use by holding hackathons and contests for new ideas and mobile app development. Redefine the purpose of IT to include innovation and establish an innovation team/organization (from previously identified change agents) to coordinate efforts. Take an inventory of existing infrastructure across organizations to develop a plan for leveraging these assets and sharing information. Begin to research and evaluate enterprise architectures that will support mission. Formalize collaboration by creating cross-departmental work groups for services delivery beyond emergencies, events, and disaster management. Document processes and define specific outcomes. Define how successful outcomes will be measured. Move beyond one-off contests to engage citizens on a continuous basis via personalized apps, direct communication via social media, and using gamification models. Hold in-person and online meetings to discuss new project ideas and ways to leverage existing data and systems. Data integrity must be a priority as information sharing across organizations becomes a reality. Continue to expand the availability of and to integrate internal multistructured data sources. Be aware that data governance policies and procedures will be difficult to implement at single-business-unit level. Budget for scaling out of projects. Perform costs-benefit analysis for Smart City projects to determine resource allocation. Begin serious discussions with partners on business models. Define what return partners will get by putting "skin in the game." Develop a skills pipeline. Work with academic institutions to use students to intern on projects to augment staff but also to mentor potential new hires. Assign an executive-level leader to coordinate the development of a cross-businessunit Smart City strategy and to work regularly with partners and other stakeholders, like educational institutions. Create a centralized Smart City team that provides support for decentralized staff within business groups and that works consistently on citizen engagement. Monitor outcomes-focused metrics by which processes, staff, and outcomes are measured to ensure goals are being met. Deploy fit-for-purpose and workload-optimized technology. Incorporate predictive analytics into technology performance monitoring and management processes. Enable broad technology adoption by ensuring that an appropriate technology pricing structure is negotiated with IT vendors. Page 18 #GI IDC Government Insights

23 TABLE 3 IDC Government Insights' Smart City Maturity Model Impact/Guidance Stage Guidance Optimized Outcome: Agility, innovation, and continuous improvement in service delivery bring competitive advantage Source: IDC Government Insights, 2013 Make available information about all the data sources for users with business units. The centralized team should take charge of continuous improvements in process and to refine and improve on methodology for governance and measurements. Employ decision management techniques to enable continuous process improvement and integration of innovation and citizen engagement into business processes. Reorganize departments and agencies in accordance with outcomes and service delivery goals and match budgeting process to fund new organizations. Regularly provide training to all the technology, analytics, and business staff to ensure everyone continues to work toward a common vision and outcomes, even as they are adjusted and refined. Ensure that open data continues to be used to support the growth of new business and services by a continuous refresh of available data as well as tools that have been successful in fostering their use. Continue R&D initiatives with academic and private partners. LEARN MORE Related Research The Social City: Emerging Models of Innovation and Citizen Participation (IDC #DR2013_BS1_RC, March 2013) Pivot Table: IDC Government Insights' U.S. Government Solutions Market Share Guide, Methodology, and Taxonomy, 2013 (IDC Government Insights, #GI239610, February 2013) Perspective: The Reality of Smart Cities in Western Europe How to Move Your City Agenda Forward (IDC Government Insights #GI238668, December 2012) China ICT 2013 Top 10 Predictions: Explore and Capture the Third Platform Opportunities in a Transforming Environment (IDC #CN U, December 2012) U.S. Government 2013 Top 10 Predictions (IDC Government Insights #GI238535, December 2012) Japan Smart City Solutions Forecast (IDC #J , November 2012) (Note: This document is in Japanese.) 2013 IDC Government Insights #GI Page 19

24 Methods and Practices: The Relationship Between Smart Government and Smart Cities (IDC Government Insights #GI237028, September 2012) 2012 U.S. Local Government Survey: Investment Priorities in Smart Technologies and the Four Pillars (IDC Government Insights #GI237407, October 2012) Smart Cities and Smarter Public Safety: The Case for Innovation in US Local Law Enforcement (IDC Government Insights #GI235481, June 2012) Business Strategy: Smart City Strategies IDC Government Insights' Smart City Framework (IDC Government Insights #GI234160, April 2012) Synopsis This IDC Government Insights report identifies IDC Government Insights' Smart City Maturity Model, which identifies the stages, key measures, results, and actions that are required for cities to effectively move through the stages and progress toward the long-term goal of becoming a Smart City. "Cities are facing a perfect storm of economic, environmental, and demographic challenges today in which rising urban populations are exacerbating existing urban problems and straining resources in the context of uncertain economic times. Citizens' high expectations for services delivery and the need for sustained tourism and business development are pressing cities to consider the opportunities afforded by emerging technologies. Navigating transformative change, such as that required by Smart Cities, is a long-term and complex process. IDC Government Insights' Smart City Maturity Model is a framework of stages, critical measures, outcomes, and actions required for organizations to effectively advance from Ad Hoc to Optimized along the successive stages of competency toward data- and event-driven decision making." Ruthbea Yesner Clarke, research director, Smart Cities Strategies Page 20 #GI IDC Government Insights

25 Copyright Notice Copyright 2013 IDC Government Insights. Reproduction without written permission is completely forbidden. External Publication of IDC Government Insights Information and Data: Any IDC Government Insights information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Government Insights Vice President. A draft of the proposed document should accompany any such request. IDC Government Insights reserves the right to deny approval of external usage for any reason IDC Government Insights #GI Page 21

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