Smart City IQ
Smart city services should be more than a developer’s shop window, says Mohammed Al Retmi, Orange Business Services
Every new city development will have a vision of smartness but not all smart cities are as smart as they may want to be. This may be due to budget constraints or other factors; the ambition to be smart may remain but the reality is that choices have to be made about which smart services to include — and exclude.
Smart city real estate developers need to get real when it comes to smart city services, because not all smart city services are equal or affordable. Which services are right for the development? This is a question for the developer and ICT adviser to consider together. The developer could start with an initial list of up to 150 potential smart city services and, after working through the various impacts, business cases and budget requirements, this could be reduced to 30 or even a shortlist of 10. Ultimately, the smartness of the smart city is a function of the developer’s ambition and budget.
Smart city project owners in the Middle East can range from government agencies or municipalities to real estate developers. Whoever is the ultimate project owner, the challenge may be that the smart city vision is clear but the budget is not sufficient to deliver the results.
Many of the region’s smart city projects are driven by real estate developers — some planners want their developments to be smart but they may not really know where to start. Developers certainly know all about building mixed-use facilities and managing districts and buildings, but they may not know much about how to operate a smart development, once it is up and running — and how to deliver the resident and visitor experience.
So, when we talk about smart services and the importance of the ‘data journey’ — the six steps followed by data through an integrated smart city — developers quickly realise they need to engage in a consulting phase to collaborate with their ICT partner. The collaboration combines their knowledge of building, ICT and operations, and focuses on the purpose of the development – for example, this may be an industrial city, a healthcare facility, or an education campus. This is a vital phase in which the real estate project owners and ICT experts take time to consider the smart elements of the project and agree on the degree of ‘smartness’ that could be included in the development.
Every smart city project is unique but not all ICT smart city solutions are necessarily bespoke; some developers may look for specific solutions from the existing smart services catalogue, such as smart access to a building, smart parking or lighting. These may be specified as standalone, isolated services, rather than an integrated solution approach with a clearly defined customer journey — as a result, data may become parked in departmental silos and never quite deliver the desirable degree of smartness.
Property developers may be tempted to add some smart services to developments in order to add marketing value and push prices higher — create a more desirable property, likely to sell faster, and retain residual values better whilst enhancing the customer experience of the development. The developer may want their ICT partner to create a suite of smart services to sell to them on an OPEX basis. Or developers may choose to phase-in the desired smart services over a period of time, as more budget becomes available.
How do developers choose the portfolio of smart services for a particular development? Some services improve customer experience, some lower operating costs, and others generate revenues. All smart services fall into one of these categories and a business case should be made for each to determine the return on investment. Some will help create a point of difference and a marketing asset in promoting the development to prospective customers — the ‘shop window’ effect. Some services are already commoditised (no-one expects to have to pay for WIFI any more) while a smart parking mobile app is a service that customers will pay for and will generate revenue.
Of course, some developers may not know exactly what they want or what is feasible and this can lead to a process of co-innovation, where the developer and ICT partner brainstorm and develop a prospective catalogue of smart services. This process can lead to real innovation such as the ‘IOT Cockpit’ city management solution developed by Orange Business Services for a municipality client in the region, and which has now become part of the Orange smart city services catalogue.
The reality in the Middle East is that no particular smart service dominates, although there are some especially active sectors within the smart city domain — these include healthcare, transportation, smart parking and fleet management for example, especially for companies operating a large number for vehicles.
Smart city project owners still aim to create smart developments but it is not an easy journey and there are always budget constraints, which means carefully assessing each smart service for its value, contribution and ROI, and then making smart decisions.