IDC PlanScape: The Essentials of Internet of Things Investment for Smart Cities

Transcription

1 Business Strategy IDC PlanScape: The Essentials of Internet of Things Investment for Smart Cities Ruthbea Yesner Clarke IDC GOVERNMENT INSIGHTS OPINION FIGURE 1 IDC PlanScape: Executive Summary of the Essential Elements for IoT Investment for Cities and States Source: IDC Government Insights, 2015 January 2015, IDC Government Insights #GI253551

2 Figure 1 shows the essential elements for cities and states to consider as they begin to research investment into the Internet of Things (IoT). The Internet of Things is an emerging reality; U.S. cities and states cannot avoid the ramifications of new IP-enabled and connected devices and their potential impact on the delivery of government services and on the quality of life of citizens. IT and non-it government leaders must begin to educate themselves more fully on this broad ecosystem of technologies in order to begin investment in key point solutions IDC Government Insights #GI

3 IN THIS STUDY The Internet of Things is an important part of the development of Smart Cities. In this study, IDC explains the role of the IoT in Smart Cities and provides a planning framework that enables state and city organizations to prepare for, and respond to, the fast pace of technology transformation around the 3rd Platform (cloud, mobile, social networks, and big data and analytics). This IDC PlanScape document offers practical guidance to help IT and non-it leaders in government justify investment in IoT solutions. This guidance includes answers to the following: Why is the IoT important for consideration for investment by state and city government? What are IoT solutions and key use cases? Who are the key stakeholders that should be involved in IoT initiatives? What are their roles and responsibilities for promoting successful IoT projects? How can IT and non-it leaders help accelerate investment in the IoT for their organization? SITUATION OVERVIEW Why Is the Internet of Things Important? The Internet of Things is important because it provides access to new and better information in real time. This rapid access to new and better information impacts the quality of government services, enabling them to be provided more quickly, more efficiently, and in a more predictive and less reactive manner. This ultimately impacts every single person citizen, visitor, business owner who enters your city or state. To be more specific, the IoT offers: Access to new information: Devices, whether intelligent devices with embedded analytics or "dumb" IP-enabled devices that merely transmit information, can provide departments with new information. Some of this information will be new by virtue of the type of device. For example, strategically placed acoustic sensors that pick up gunshots have shown that previous assumptions on the level of gun activity in certain neighborhoods were wrong. Police departments (PDs) operated on the assumption that when shots were fired, 80% of the time someone called 911. In fact, this percentage could be as low as 20% of the time, a fact that was revealed when these sensors were able to pick up actual gunshots, providing local PDs with new information and insight. Some of this information may already be collected by people, but because of resource constraints, it cannot be collected as often or as detailed as needed. For example, inspectors collect data on the structural integrity of bridges and other infrastructure, but there are rarely enough inspectors to regularly and thoroughly inspect all the bridges that need it. Sensors on bridges can provide information on the structural integrity of the bridge at regular intervals, alerting inspectors when there are potential problems that need to be addressed IDC Government Insights #GI

4 Access to better, faster information: Access to "better" information means access to more granular, automated information often provided in real time or near real time as opposed to waiting for an update manually or by phone or data entry. Parking sensors, for example, provide immediate information when a parking space is empty, instead of requiring people to drive around to find an empty spot. Public buses can alert a transportation management center of their location continuously, allowing managers to record their routes for improved routing and scheduling, follow traffic patterns, and update digital signs or provide alerts via apps so citizens waiting for the buses know when they will arrive with accuracy. FIGURE 2 A recent survey of U.S. state and local government executives shows that access to timely, granular, and complete data to support action and decision making is an area for improvement. When asked, "To what extent do you agree with the following characteristics of the data available in your organization to support decision making?" (on a scale of 1 to 5, with 1 = do not agree and 5 = completely agree), the lowest-rated characteristics were that data was timely, complete, and granular enough to support decision making (see Figure 2). Data Characteristics to Support Decision Making n = 359 Base = U.S. state and local government respondents Note: Data is rated on a scale of 1 to 5, where 1 = do not agree and 5 = completely agree. Source: IDC's Smart City MaturityScape Benchmark Survey, 2014 The premise of IoT solutions is that they provide a significant return on investment (ROI) from this improved access to information. There will be a financial return from efficiencies and cost savings but also a social and environmental return by enabling departments and agencies to meet specific targets, outcomes, and policy goals. The IoT can help state and local governments reduce traffic congestion, respond more quickly to emergencies, reduce greenhouse gas emissions, and serve the citizen more effectively IDC Government Insights #GI

5 What Is the Internet of Things? IDC defines the Internet of Things as "a network of networks of uniquely identifiable endpoints (or things) that communicate without human interaction (by either wired or wireless access) using IP connectivity whether locally or globally." The IoT makes real the concept of ubiquitous connectivity with its innate management, monitoring, and analytics functions. Without a doubt, all IoT solutions require intelligent systems. Devices or things in the IoT are managed by these intelligent systems, defined as securely managed electronic systems that run a high-level operating system (HLOS) and autonomously connect to the Internet, execute native or cloud-based applications, and facilitate data analysis. Research indicates that traditional embedded systems are also being enhanced to function like intelligent systems in IoT solutions in some cases. IDC's current definition of the Internet of Things has evolved to underscore the requirement that the IoT system is defined precisely as an intelligent system or enhanced traditional embedded system that must have IP connectivity. When we think of the IoT, our mind typically begins with the endpoints themselves the vast types of sensors, wearable devices, and surveillance cameras. However, the IoT is a solution that covers the entire technology stack as well as the associated services to integrate, deploy, and support solutions and the security required at every level, as shown in Figure 3. FIGURE 3 The IoT Technology Stack Source: IDC Government Insights, 2014 To deploy an effective IoT solution, all elements of the technology stack must be mature and in place. Of course, there must be intelligent devices and systems capturing data; the communications network must be in place, whether it is fiber, wireless broadband, and/or sensor networks to transmit the data; 2015 IDC Government Insights #GI

6 there must be a platform in place to integrate and manage devices and data from devices; and data must be processed and analyzed to filter out noise and execute on relevant information and so forth. New IoT apps cover an expanded number of sources of the data (including a broad array of sensors, machine-to-machine traffic, and wearable devices), offer more extensive analytics on a wide range of data, and can help bring these analytic and application processing capabilities out to many of the devices themselves. Analytics, decision-support tools (mapping, visualization, etc.), and integration of data sets are key elements to making an IoT solution actionable as data types and volumes are growing exponentially, data must not only be turned into information via analysis but be integrated with existing and legacy data sets and displayed in such a way that everyday users can respond to it. To further understand what the IoT is, let's look at some specific use cases under way right now in the world (see Table 1). TABLE 1 Worldwide Regional and Local Government IoT Use Cases Vertical Use Case Benefit Example Transportation Tolling collection transponders Reduced congestion at tolls, convenient payments, improved compliance, less CO 2 emissions Many Transportation Public transportation sensors on buses Capture real-time traffic conditions, improved prediction of best routes and scheduling for greater fuel efficiency, improved communication with passengers Singapore Transportation Smart parking parking sensors Navigate drivers directly to open spots for greater convenience, increased turnover in central business districts, reduced congestion and emissions, improved fee collection/violations tracking emissions Santander, Spain Public safety Acoustic sensors for gunshot detection Response possible for every shooting incident, faster response times, better scheduling of patrols in high-violence areas Multiple U.S. cities (Chicago, Oakland) Public safety Situational awareness wearable cameras Real-time situational awareness and recording of actions, potential to modify officer behavior Many Connected lighting IP enabled and sensors LED lighting on street lamps Cost savings and reduced energy consumption; lights dim and brighten depending on surrounding activity; faster response times by work crews to issues Copenhagen, Denmark Public works Citizens as "things" using smartphone sensors for automatic pothole reporting Reduced costs to find, repair, and schedule repairs, work crews, and work orders; engages citizens Boston, Massachusetts Source: IDC Government Insights, IDC Government Insights #GI

7 Challenges and Risk Factors As solutions, particularly emerging technology solutions that rely heavily on data, there are risk and challenges to deployment. Key challenges and risk factors include: Security: Besides public safety, much of the data being sent across networks for IoT use cases will not be heavily sensitive, but that does not mean that it wouldn't cause significant disruption if the systems were hacked. For public safety, the fact the much of the information that may relate directly to a police officer is geolocation-specific could present a threat to the safety of officers in the field. Real-time transmission of this data and its security is a serious consideration. In other cases, endpoint devices as data collectors, in some cases conducting some data analysis at the edge, and providing information that is geolocation specific, may not be the security issue the data may already be open and accessible to the public as part of Open Data initiatives. But the systems themselves (i.e., a connected lighting system), if disrupted, could provide significant hazards to citizens. Privacy: Much of the talk about the IoT is its Big Brother aspect. While citizens may want the convenience of a multispot parking system that relies on a license plate reader to track their location, this is certainly giving up some privacy, which could have ramifications later on. At times, this can be addressed by having opt-in services so that those concerned about privacy can choose not to access services. But not all services can be opt-out. In the case of Harrisburg, Pennsylvania, that offers a parking system based on license plate numbers, there may not be options for parking without giving up this information. The will, over time and with the increase of IoT solutions, be an increasing tension between convenience and privacy and accessing government services and privacy. Privacy could be retained by disassociating data from its owner that is, the license plate is used for parking payments but not linked to other systems related to the citizen; however, this reduces the value of the data for state and local governments that are seeking to get a more cross-departmental, cross-services, holistic view of citizens. Required changes in work processes or standard operating procedures: New information, coming in real time, is going to change the way workers need to work. This requires changes in operating procedures and work processes. These changes may need to be documented and approved if there are changes in policies (and could involve unions in some cases) and require training and change management strategies for dealing with resistance to change from workers. For example, acoustic sensors that detect gunshots have provided real-time access to this information but no other details that might be collected from a 911 call, such as the number of people in the area. A responding officer may actually have little information about the scene unless there is also a corresponding video information or a 911 call. This means that officers do not know what standard operating procedures to follow. Lack of standards and integration: The value of IoT data increases exponentially when it is integrated with other data sets and into existing operation center systems (the previously mentioned example with acoustic sensors is a great example of this video, 911, and acoustic data should all be integrated into the dispatch systems). This presents a challenge in that there is little standardization of chips and devices for device enablement solutions offerings. While standards are emerging, there are complications by multiple standards bodies determining multiple standards. Part of this is the immaturity of solutions from vendors; many are working to be able to integrate with other systems and work within a partnership 2015 IDC Government Insights #GI

8 ecosystem. There will be a challenge to determine the best private partners for pilot IoT solutions. THE APPROACH Who Are the Key Stakeholders? Even at the early stage of researching IoT solutions, or designing a pilot solution, the active participation of top management from the IT department as well as functional department is required. The CIO and someone on her/his staff must be visibly targeted with the strategic objective of supporting the functional department, with an eye toward future cross-departmental deployments (see Table 2). For example, IP-enabled cameras at traffic lights might be a first step, but eventually data from the cameras should be shared with the police department or others. A level of architectural strategy should be in place and will likely include IT operations, data analysts, and Open Data initiatives, as well as the department director plus assigned staff. Equally imperative is to ensure all stakeholders and beneficiaries of the solution are involved at an early stage such as local business and community groups. There have already been examples of implementations of smart parking meters or other citizen-facing systems that have been met with considerable resistance and even project failure in which systems needed to be rippled out and replaced. TABLE 2 Key Stakeholders in IoT Solution Design Title Role Action Required CIO Leader Innovator and change agent, set strategic direction, align and motivate people Department head (i.e., chief of police) Leader Find budget, align internal department resources, motivate people Functional IT director (i.e., patrol unit/traffic investigations) Manager Project management and execution, responsible for accountability, designing and meeting KPIs and metrics Functional IT support staff Support Execute on project tasks IT department Open Data lead Stakeholder Identify issues, moderate project impact, ensure timely feedback Citizen/business/ community groups Beneficiary Provide feedback and input on usability of systems and areas of concern around privacy or other issues, determine measurements of success Source: IDC Government Insights, IDC Government Insights #GI

9 FUTURE OUTLOOK The Internet of Things will grow in importance and influence, especially in urban environments, in the next two to three years. The IoT will become an essential component to deliver on key policies like CO 2 emissions and climate preparedness as well on quality-of-life issues like traffic congestion and public safety. Several predications from IDC FutureScape: Worldwide Smart Cities 2015 Predictions (IDC #253164, December 2014) highlight the direction of the future IoT: Citizens will be connected "things." One of IDC's IoT decision imperatives for 2015 is that within the next five years, 40% of wearables will have evolved into a viable consumer massmarket alternatives to smartphones. While initially citizens will use both smartphones and wearable computing devices, eventually wearable devices will mature into full-fledged standalone devices with a broad range of functions and associated applications. These devices will create data and connect with apps and systems autonomously, and just as with mobile apps on smartphones, citizens will expect to access government services via these devices as well as be part of the IoT ecosystem that provides information to government. Investment will grow relatively rapidly. IDC predicts that by 2018, competing to build innovative and sustainable Smart Cities, cities and metropolitan areas will represent at least 25% of government spending on deploying, managing, and realizing the business value of the Internet of Things. At this point, mostly large cities are deploying point IoT solutions, but this will change as midsize cities realize benefits. Climate change will be a driver. By 2018, concerns about severe weather and changes in sea and water levels will drive collaboration between public safety, emergency response, and sustainability programs for climate preparedness and a 30% increase in investment in predictive IT solutions using the IoT, big data, and social networks to mitigate damage to property and people. There is risk in doing nothing and risk in moving ahead without proper strategic planning. In 2015, 70% of local government CIOs will lack an appropriate information architecture strategy to cope with the increasing use of cloud, data analytics, and connected devices, leaving many states/provinces and cities open to security risks as well as limited in the ability to manage, validate, and use data assets. To learn more about these future predictions, refer to IDC FutureScape: Worldwide Smart Cities 2015 Predictions (IDC #253164, December 2014). ESSENTIAL GUIDANCE Actions to Consider How Can My Organization Take Advantage of the IoT? There are a few main issues facing state and local government today around IoT initiatives, and they are not solely related to budget limitations for these projects. The main challenge is around education and awareness. Many department leaders may have specific problems they would like to solve that would be a great fit for an IoT solution, but they are not clear on what the term IoT means, what are 2015 IDC Government Insights #GI

10 specific use cases, and what other cities have already tested and tried. Of course, the end goal is to find the resources both monetary and otherwise to investment in a pilot project. To this end, government leaders should: Educate key decision makers and build support. Use success stories from other cities and vendor ROI and other performance metrics to make the business case. Aim for investment in small point solution as pilot. Find key private sector and university partners. Figure 4 provides more detail around how to garner support for additional research and investment in the IoT. FIGURE 4 Steps to IoT Investment Source: IDC Government Insights, 2014 The Important Role of Cloud One very important area that must be considered to accelerate IoT investment is cloud services. Cloud-based IoT solutions solve many of the challenges of IoT deployment. For example, many cities and states do not have the expertise or resources to manage additional sensors or sensor networks; cloud vendors, many emerging in the communications space, can take that role as can specialized IoT vendors. These vendors will install, maintain, and support their sensors as well as provide analytics as a service, serving up event notifications only as required to operations centers IDC Government Insights #GI

11 The acoustic sensors mentioned previously can be provided in such a manner. ShotSpotter offers a subscription-based service that provides real-time notification of gunshot crimes in progress to dispatch centers and patrol cars. Related information can include the number of shots fired, the number of shooters, and the precise location of the crime as well as a database of maintained incidents for further analysis to help with community policing resources. This type of service outsources the device installation, maintenance, and analytics to the vendors and offers usage-based pricing. While this is only one example of a cloud-based IoT solution, there are many others across many different use cases. Cloud deployment should be a key area of research as government leaders look to determine budget required and build the business case for investment. LEARN MORE Related Research IDC MaturityScape Benchmark: Smart Cities An Assessment of U.S. Cities and States (IDC Government Insights #GI253314, forthcoming) IDC FutureScape: Worldwide Smart Cities 2015 Predictions (IDC #253164, December 2014) IDC FutureScape: Worldwide Government 2015 Predictions (IDC #252588, December 2014) IDC FutureScape: Worldwide Internet of Things 2015 Predictions (IDC #252872, December 2014) IDC's Use Case Taxonomy, 2014: Making the Case (IDC #252064, October 2014) Synopsis This IDC PlanScape study offers practical guidance to help IT and non-it leaders in government to justify consideration for investment in IoT solutions. This guidance includes answers to the following: Why is the IoT important for consideration for investment by state and city government? What are IoT solutions and key use cases? Who are the key stakeholders that should be involved in IoT initiatives? What are their roles and responsibilities for promoting successful IoT projects? How can IT and non-it leaders help accelerate investment in the IoT for their organization? "The Internet of Things is an emerging reality, and U.S. cities and states cannot avoid the ramifications of new IP-enabled and connected devices and their potential impact on the delivery of government services and on the quality of life of citizens," states Ruthbea Yesner Clarke, director, Smart Cities Strategies program. "This document will help government decision makers understand the benefits of IoT use cases and help justify further research into investment." 2015 IDC Government Insights #GI

12 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. Global Headquarters 211 North Union Street, Suite 105 Alexandria, VA USA idc-insights-community.com Copyright Notice Copyright 2015 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.