Transforming Cities in China: The Interplay of

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1 The Art and Science of Service June 8-10, 2011, San Jose, California Transforming Cities in China: The Interplay of Business Architecture, Service Design and Smart Technologies Guang-Jie Ren, PhD IBM Almaden Service Research

2 2 IBM SMARTER CITIES AND ACTIONABLE BUSINESS ARCHITECTURE 2

3 3 The trend of urbanization at a global scale In 2007, for the first time in history, the majority of the world s population 3.3 billion people lived in cities. By 2050, city dwellers are expected to make up 70% of the total population or 6.4 billion people. 3

4 4 IBM Smarter Cities Program is designed to help cities address top challenges Government Services Public Safety Transportation Applying the principles to core systems in the city Education Energy and Water ICT Healthcare IBM Smarter Planet IBM Smarter Cities Other Core Systems 4

5 5 Cities are complex ecosystems;they rely on multiple stakeholders and core systems to meet the needs of citizens and local businesses Federal/National State/Province County City Government Manage and Support Business Areas: Vision, Policy, Planning, Budgeting, Revenue Collection, Finance, HR, Legal, IT, Admin, Procurement, Facilities, etc. Direct or Indirect influence through policies and funding Fund & Administrate via agencies & programs Private/Non-profit organizations Core Systems Transportation, Public Safety, Water, Utilities, Healthcare, Education, Social Services, Culture, Economic Dev, Urban Planning, Environment, etc. Create and deliver front-line services Participate in, influence and evaluate the core systems Citizens and Businesses Observations Fund, elect, influence and evaluate the government at all levels Local government does not necessarily own all the resources; it has a need to collaborate with other stakeholders Citizens often hold the local government accountable for the various services they receive, regardless of providers Public policies tend to be made in isolation; opportunities to address cross-system challenges are often overlooked How can we represent the city ecosystem in ways that encourage collaboration and help resolve challenges? Reference: Ren & Sanz (2011). An Integrated Approach to Transforming the City Ecosystem, Annual SRII Global Conference, San Jose, California, USA, 29 March 2 April,

6 6 IBM Component Business Modeling (CBM) offers a common framework for various stakeholders to make informed decisions from the same facts Reference: IBM. (2005). Component Business Models: Making Specialization Real. Somers, NY: IBM Institute for Business Value. 6

7 7 IBM Actionable Business Architecture (ABA) integrates strategy, operations and technologies through industry-leading methods, models and tools Reference: IBM. (2009). Actionable Business Architecture. Somers, NY: IBM Global Business Services. IBM. (2010). Actionable Business Architecture: IBM's Approach. Somers, NY: IBM Global Business Services. 7

8 Direct Control Execute Marketing & Customer Management Co ns ume r Se gme nta ti on Cu stome r Rel atio ns hi p Stra teg y Ma rke ti ng Stra te gy & Pla nn in g Cus to me r Beh av io r Mod el in g Ma rk et & Co mpe titor Res ea rch Cu stome r Sa tisfa ctio n Me as urem en t & M an age me nt Se gm en ta tio n Ma na gem en t Cli en te l i ng Ca l Cen te r Cam pai gn Man ag em en t Cu stom er Servi ce Lo ya lty Cus to me r Co mmu ni ca ti on s Mas s Mark etin g & Ad ve rti si ng T arge t M arke tin g Afte r Sa le s Servi ce s Custom er Rep os itory P roducts Me rcha nd is e Stra teg y Me rc ha nd is e Pla nn in g Asso rtm en t Pla nn in g Pro du ct De ve lo pme nt (e.g. Priv ate L ab el ) Bra nd Ma na ge me nt Pri ci ng Strate gy So urci ng Pl an ni ng Pric e / Prom oti ons Man ag eme nt In ven tory Ma na ge men t Su pp ly T erms Ad mi ni stratio n & Pri ci ng Prod uct Li fec ycl e Ma na ge me nt (PL M) Al l oca tio ns PO & T ra de Fu nd s Ma nag em en t Purc has in g / So urc in g Dema nd F o re ca stin g Mas te r Da ta Ma na ge men t Store and Channel Mul ti-c ha nn el Strate gy Sto re & Ch an ne l Strateg y Sto re Desi g n & L ay ou t Cha nn el De si gn &L ayo ut Store &Cha nn el Pro fitab il i ty Sto re Op erati on s Man ag em en t T ra ns ac ti on Man ag eme nt Pl an og ram Re pl en ish me nt Servi ce s Del iv ery Pric e Cha ng in g Ti me & Ate nd an ce F lo or Sto ck in g, Ba ck Ro om T ask Mgt Los s Preve nti on Wo rkforc e Man ag em en t POS Exe cuti on / Cas h Ma na gem en t Mu lti -cha nn el Cal l Cen ter Distribution & War ehousing Di strib uti on, W areh ou se, Sup pl y Cha in Stra teg y T ra ns po rta tio n Pla nn in g Su pp li er Rel ati on sh ip Pl an ni ng (L og is ti cs ) Sup pl ie r Pe rfo rman ce Man ag eme nt In-b ou nd L og is tics In tra -co mpa ny & Outb ou nd L og is ti cs T ran sp ortatio n / Fl ee t M an age me nt W areh ou se M an ag eme nt Di strib utio n Ce nter Ope rati on s Yard M an ag eme nt Re turns & Rec la mati on Pro du ct Tra ck & Tra ce T ran sp ortati on / Fl e et Ope ra tio ns Business Administration Corpo rate Strate gy Fi na nc ia l Ma na ge men t & Pla nn in g LOB Pla nn in g Lo cati on Strate gy Al li an ce Ma na ge me nt Bu si ne ss Performa nc e Rep orti ng L eg al &Reg ul ato ry Comp li an ce Rea l Estate & Con struc ti on Man ag eme nt Ri sk Ma na ge men t Sto ck L ed ge rhr Man ag em en t (Care er De ve lo pme nt, Tra in in g, Recru iti ng ) HR Ad mi ni strati on / Payro l Corpo rate Au di t Co rp ora te Acco un ti ng (GL AP, T rea sury, e tc Sa le s Au di t In di rec t Proc urem en t Cre di t O pera tio ns PR & Inve stor Rel a ti on s IT Sys tems & Ope rati on s 8 IBM Actionable Business Architecture is leveraged to address the question IBM Approach Overall Design Component Business Modeling Business Models City Ecosystem Aligned with Strategy Models Driven by Business Scenarios Actionable Business Architecture Transportation Public Safety Economic Dev. Local Govt Water Mgmt Citizen Health Energy Environment Urban planning Core Systems Social Services Education Culture and Recreation Judicial and Justice etc. Business of IT Finance Payment Human Capital Shared Services Procurement Asset Management Tax Collection etc. Operations Models IT Models Investment and Initiatives 8

9 9 The central piece is the City Ecosystem Model, providing a shared view of the city on which various stakeholders can make informed decisions from the same facts Business Component is a part of an organization that has the potential to operate autonomously Business Competency defines a broad business area with characteristic skills and capabilities, for example, public safety, transportation, urban planning, etc. City Ecosystem Model: Base Version Accountability Level characterizes the scope of decision making. The three levels used in CBM are Direct, Control and Execute. Direct is about strategy, overall direction and policy. Control is about monitoring, managing exceptions and tactical decision making Execute is about doing the work 9

10 10 Through the Business Architecture, IBM is helping cities to address a wide range of strategic, operational and IT challenges Strategy Understand City Ecosystem Make City Smarter Improve Quality of Living Facilitating Cost-Take-Out Promote Economic Development Emerging Practices Determine Sourcing Model Adopt Cloud Computing Leverage City-Wide Shared Services Leverage Regional Shared Services Performance Measure City Performance Benchmark City Performance Improve City Performance Improve City Capabilities Alignment Rationalize Initiative Portfolio Restructure Application Portfolio Cope with Change Establish Regional Ecosystem Framework 10

11 11 TRANSFORMING CITIES IN CHINA: THE CITY OF SHI JIA ZHUANG 11

12 12 China is urbanizing, with rapid growth in the number of cities, urban population, urban disposable income, housing, transportation, and so on Population Number of cities 100% 80% 60% 40% Rural Urban % 200 0% Forecasted Year Year Key Indicators Urban Citizen Disposable Income (RMB) Residential Housing (Square Meter) Public Transit Vehicles per 10,000 Population Private Vehicles per 10,000 Population n/a Telephone/Mobile Phone Coverage (%) Green Area per Capita (Square Meter) Household Spending on Education(%) Household Spending on Health Care(%) Reference: 12

13 13 Unprecedented challenges facing Chinese cities as their growth accelerates Industry Upgrade & Competitiveness Economy Migrant Management Talent Development Population Environment Pollution, Climate Changes Sustainable Development Resources and Infrastructure Infrastructure Quality of Living Public Services to Meet Citizen Needs 13 13

14 14 The City of Shi Jia Zhuang, China: Creating a new district as the model for the Township of the Future Carbon Neutral Eco Friendly Smarter City The City of Shi Jia Zhuang Hu Bei Province China 14

15 15 The project successfully addressed the following needs of the city leadership Vision Set a development visionfor Smarter District, based on leading domestic and international experience Framework Built a complete framework for Smarter District, including 66 capability components across 5 domains and 3 levels, with over 100 smarter ideas Capabilities & KPIs Put forward more than 80 capability requirements on Smarter District, from which 29 most representative KPIs were derived Construction Projects Formulated the plan of 35 projects for Smarter Zhengding, each with the analysis of technical solutions, investment modes and projected ROI Supporting Mechanisms Provided information support for all of the 24 KPIs that are under the eco-city and low-carbon objectives as specified in the district s master plan Made 14 recommendations on the integration of Smarter District with the eco-city and low-carbon objectives 15

16 16 More information can be found in the Marketing Brochure Marketing Brochure: 16