You will forgive the arrogance of posting my thoughts on this platform, but I have spent the last few years of my professional life trying to make some sense out of the continuous buzz-wording around “Digital Transformation” of the Public Sector (here we go with the first abused buzz-word) and in particular in the area of the so called “Smart Cities” (“errare humanum est, … perseverare diabolicum”, Seneca wrote), that I hope I can contribute to the discussion by sharing some of my thoughts and experiences.
First of all a few words on myself, just to put things into context. I come from a humanistic background, but I spent the last 10 years in “Technology”, trying to bring innovation into new markets and business models.
In the last 5 years I had the chance to spend most of my time in studying, assessing and implementing IOT solutions to support the digitalization of local Public Administration and “Utility” Companies, having often the privilege to sharing thoughts, ideas and concerns with politicians (… representing communities big and small), public administrators, managers of the IT & ICT infrastructures of those Authorities and many IT & ICT “industry players”.
This said, the “intellectual turmoil” leading to this “explosion” (this article) derives from recent events of the last few months, just after I left my position in one of the major European ICT players and joined a Public Institution (where I continue to focus on “efficiency” and digital transformation), events culminating in the realization of the gap, the still “un-bridged” distance, between the ways of Public Institutions and the ones of Technology players.
While it is undeniable that giant leaps forward have and are being made, every day, in building solid foundations to effectively digitalize entire public service areas (and in some fields the digitalization is already under way, or has even been partially completed), it is also true that there is still much to do to make replicability, scalability and affordability part of the DNA of these technological solutions.
The vast majority of “smart city” projects (even if there are many, intensively advertised ones, which are undoubtedly successful), unfortunately, seems to remain anchored to proof of concepts, pilots and small scale testing environments, very often limited to “theatrically stage” how technologies (or cosmetically customized versions of their applications) operate in “real-life”.
If you are skeptical about these first statements, just try to enter in a search engine the combination of words “smart city failures” and you will be amazed by the quantity and quality of the available content.
The question that raises from these considerations is why it is so difficult to move to the “next level”, i.e. the full rollout of a technological infrastructure to digitalize the provisioning of a public service to citizens.
And in addition to this, why is it, in the majority of instances, that moving from “pilot state”, seems to be a titanic challenge, with both parties (the Public Sector and the ICT “Industry”) very often unable to proceed together in their efforts towards full-scale digitalization?
Building a Theoretical Model
Here comes a theory (of which limitations and approximations I take full responsibility), based on the observation of the moods, motivations, aspirations, “clichés”, frustrations, from both sides of the barricades.
Using an oversimplified graphical representation of the “decision making” framework in which public administrators and executives of technology companies are tasked to operate, let’s try to elaborate on its implications.
The first point which takes the attention is the role given to what I indicate as “Policies“. Policies are the programmatic framework, the political platform on which public administrators are elected to office. During the elections campaigns, these sets of political objectives are the topic of discussion with constituents and represent the “strategic program” to which officials should be adhering during their electoral mandate.
So, why not calling this “Strategy”, instead of “Policies”, as academia and consulting usually do? For the simple reasons that, while strategies in corporations (“for profit organizations”) have as ultimate objective a “profitable” outcome of the organization’s endeavors, even in contexts where “social responsibility” is becoming more and more a driver in consumers’ loyalty (“profit“), a Public Local Administration (“non-profit” organization) will systematically target the implementation of social and political objectives and not pursue profit.
This passage is fundamental in understanding the stall in which some smart city initiatives are languishing and why “scaling” up of lab tests, proof of concepts and pilots appears often so arduous.
While the “Industry” usually blames this state of things on the political side (e.g., the skill gaps in the IT departments, the “magmatic change” of mood in decision makers, not enough focus on innovation, etc) the reality is that, too often, Technology organizations are failing to apply to these projects basic business principles.
And in too many cases, these Industry players seem not to be paying attention to the details of the “use cases” they are tackling and, even more often, they are unable to understand how Public Authorities’ operational and organizational models are affected by the programmatic Policies of the Public Institutions they are part of.
Visualizing to reduce complexity
Let me explain with a couple of charts how a public organization could be assessing technologies promising to provide new services to its community. But please be aware that this approach is just an exemplification and has no ambitions to design a “model” or being en exhaustive, “magic” tool to identify procedures for selecting technological solutions.
First and foremost, given the principles introduced by the new European Procurement Directive 2014/24/EU on Public Procurement, the total cost of operating the technological solution during the period of the assignment contract (total cost of ownership – T.C.O.), is now clearly identified as one of the drivers which should be part of the tender evaluation.
As a consequence, when benchmarking and comparing alternative “smart city” solutions, theT.C.O. better than the mere “purchasing cost” should be assessed versus the “technical value/content” of a solution, measured in terms of relevant technical features (relevant for the purpose of delivering the desired service to the community).
The chart below oversimplifies this process, which would end in ranking solutions in terms of value (available technical features) for money (the total cost of operating the solution).
But this is also where many Technology Organizations are systematically missing the opportunity to “learn” how to match their product portfolio (the set of standardized use cases they have “packaged”) with the “use case” at hand.
In my experience, this is due to the inability of exploiting the opportunities to learn fromthe environmental constraints and the feedback coming from public officials on what lays beyond the “use case”, i.e the social, political and “local economic interests” the provisioning of the service should be affecting.
The following chart should help visualizing, once again by oversimplifying the benchmarking process, how these social, political and local economic interests (usually “programmatically” addressed in a Policy document), could impact the decision towards a solution that maybe does not rank at the top of the previous assessment, but shows a much better fit to the Community objectives, like supporting local businesses, boosting new commercial/residential development areas, promoting social integration by supporting specific “economically underdeveloped” communities, etc.
In the chart, the dimension of the bubbles represents a different angle to assess the relevance of the solution from a social and political perspective, or with relation to the impact on the “local economy”.
As a consequence of this analysis, we could find ourselves in a situation for which a solution with, e.g. the lowest “technological” value (lower number of assessed technical features) would be the preferable one, as it maximizes the benefits from the Policy perspective.
For sure, to make the benchmarking more accurate, the weight of the programmatic policies objectives could be “pondered’ and weighted with relation to a priority ranking of those objectives, once again potentially changing the reading key of the assessment.
Different alternative techniques and tools could be applied to perform this exercise, so please allow me to remind you that is not my purpose to provide a “magic model” applicable to each and every case, but mainly to stimulate the readers intellectually and encourage them to adjust these principles to their specific case.
What emerges from these considerations, is that, if this model comes only close to explaining how decision could be (or should be) taken in the context of “digital transformation” of public services, very probably it won’t be technology to drive the decision of adopting a specific architectural model, but the way technology can be used to implement the above-mentioned programmatic Policies objectives.
In such a context, it becomes easier to understand why Technology brands are often finding difficult adjusting their strategies to the needs of this “market”.
If you are an executive in the Hi-tech industry and try to differentiate from competition by adding unicity to your technological portfolio, you usually do it by leveraging on your main assets, being them your IP (Intellectual property), your “interpretation” of technology (the flavor, the mix of features that builds the “user experience” you envisioned for your customers), your ability to correctly placing your products at the right “price” in the marketplace (economics), or the level of quality and grade of stability achieved in your product portfolio (usually granted by the set of skills you have been able to aggregate in your organization, by attracting talents), etc.
But, when you are facing possible “customers” who are re-shaping the ranking of your values, by prioritizing social, political and “partisan” (support to local economy), aspects that you usually consider more as environmental constraints, either you become able to design new processes and strategically adjust your portfolio to those values (by adapting “your” use cases to match the “ones” targeted by the public institution), or you will find extremely difficult to be successful.
That’s probably one of the main reasons why smaller organizations and start-ups (focused on niche “solutions”) seem to be more “fit” than Tech giants in matching use cases designed on the operational and organizational models through which Public Authorities are traditionally operating.
For sure, these smaller players are more agile, adaptable, but also and foremost, they act “locally”, very often starting from a “system integration” background, which allows them to look at the customer’s use case (what really needs to be done, without the bells & whistles) with a different attitude.
In essence, they are able to focus on the use case at hand, instead of proposing a “one size fits all” interpretation of that use case, which too often does not match at all with the one “on the ground”.
The major drawback of this state of things, is a known issue in the discussion around “smart cities” and lays in the difficulty of scaling up these tailored “solutions” and leveraging on possible economies of scale to make these projects “industrialized” and replicable in other contexts.
Industrialization, replicability and facilitating economies of scale are the fields where, for the benefit of us all, some major ICT players seem to be finally steering their focus.
In fact, as an example, some of the big “Telco” Companies have started building “environments” in which they are actively partnering with these more agile, smaller but innovative organizations, providing them with “reusable” technological components, economical and technical support, guidance on matters like cyber-security, etc, in order to assure that their future solutions are accessible, sometime more visible, but in particular more affordable to public authorities engaged in digital transformation.
But these commendable efforts are not the rule and, in my humble, personal experience, too many Technology organizations have withdrawn from the arena, not being able to keep the promises of miracle profits to their shareholders, justifying these decisions with considerations on a market “not yet mature”, stating the obvious “Oh, you aren’t even ripe yet! I don’t need any sour grapes!“.