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Accelerating the evolution of smart, connected cities

Governments cannot execute transformation alone and must partner with enterprises from key industries to support smart city initiatives

How digitally connecting the urban ecosystem helps cities and their citizens
How digitally connecting the urban ecosystem helps cities and their citizens

Cities all over the world are working to develop sustainability, protect and serve citizens, and attract new investment. By harnessing the power of digital technologies, they are becoming more sustainable and more livable communities. But governments cannot execute this transformation alone. That’s why many leading public sector organisations are partnering with enterprises from key industries to support smart city initiatives.


For both cities and the commercial entities that serve urban communities, industry leaders are turning to several powerful technologies that support their transformation. These new technologies introduce new insights that can help cities run smarter and simpler.


The Internet of Things

Industry experts estimate that tens of billions of devices, appliances, machines, and other physical objects will soon be connected through the Internet of Things (IoT). This connectivity will allow these devices to communicate over the Internet through embedded sensors, generating hundreds of trillions of gigabytes of data and delivering unprecedented, real-time insight into business processes. For enterprises supporting smart city initiatives, the IoT offers tremendous opportunities to reimagine business models and deliver innovative new services.


Using sensor data to save lives

The city of Buenos Aires manages more than 700,000 city assets, including streets and lights, parks, bus stops, drains, buildings, and bridges. Using sensor data and analytics to upgrade asset management, the city has enhanced safety and transparency for citizens and tourists alike.


Machine learning and predictive analytics

New advanced analytics and machine learning models can use the data collected by IoT sensors and other sources to provide deeper insights at unprecedented speed. Machine learning gives computers the ability to learn how to spot patterns and make connections without being programmed to accomplish a specific task. Machine learning technology does this by developing algorithms that can change and “learn” when exposed to new data.


By using intelligent applications that use text, predictive, spatial, event stream, social media, sentiment analysis, and time series capabilities, cities can transform data into insights that improve life for citizens. Some cities are analysing water usage data to predict water consumption and the impact of potential droughts. Others are exploring predictive policing applications and using advanced analytics to anticipate the impact of weather events.


Mitigating natural disasters with machine learning

One proof-of-concept exercise combines earth observation data from the European Space Agency with machine learning algorithms, predictive analytics, and spatial data to predict natural disasters. The technology synthesises data about known tropical storms, reviews satellite images, and uses heat maps to visualise the likelihood of landslides in a specific area. Local governments could use this information to determine when to evacuate populations or initiate disaster preparations.


Machine learning algorithms can be trained to analyse known patterns from satellite images, classify land usage, assess soil moisture levels, and evaluate land topologies. In the event of a landslide, for example, technology could combine land data with other sources such as social media, road maps, and population data. Government workers could use the system to understand which roads are open, the best route to get to a specific location, and the ideal location for a rescue camp.



Blockchain technology uses cryptography, peer to-peer networks, and consensus algorithms to form a digital ledger of transactions. Every participant in a blockchain can view verified transactions, which are recorded in a chain of information. This built-in transparency allows blockchain participants to conduct business transactions directly with each other, eliminating the need for trusted third parties.


Cities can use vast repositories of live data and interactions guaranteed by blockchain to automate routine tasks and execute business processes. For example, imagine that every house or apartment in a city had an entry on a blockchain used as a city’s digital ledger. The data recorded in the digital “twin” could reflect everything from property ownership to transactional data such as utility use, property tax assessment, and past and current contractor relationships.


Using blockchain, property owners would have a verified, trustworthy way to perform transactions such as renting an apartment, hiring contractors to do lawn work, or selling power generated by solar panels back to the grid. Utilities could assess power consumption data and generate energy-saving recommendations for each residence. They could also use smart contracts – which automatically manage power consumption between smart appliances and the grid – to lower costs and improve energy efficiency.


Creating a trusted source of information using blockhain

The province of South Tyrol, Italy, investigated the use of blockchain to help streamline administrative processes. Although the government uses about 1,000 software applications to collect and use citizen information, employees in the capital city of Bozen (Bolzano) spent too much time stating, confirming, or sharing facts. Using blockchain, the government can build inherently transparent systems that reduce the effort of authenticating documents. By eliminating redundant data collection processes and integrating data across applications in compliance with data sharing regulations, the government can increase administrator efficiency, simplify IT landscapes, and deliver a new level of data truthfulness and security to citizens.


Unified intelligent digital platforms

Digital platforms enable end-to-end processes with integrated solutions from the edge back to a digital core. The digital core connects the enterprise with people, business networks, sensors and big data and manages core operations; all built on a simplified data model that combines business processes with business intelligence.


Connected to the core is the organisation‘s extended processes to engage with customers or constituents. Extended processes could include constituent engagement, supplier engagement, managing spend and procuring contingent workers.


Stepping stones to accelerate transformation with digital technology

The opportunity to improve efficiency and effectiveness with digital technology is clear. But companies, non-profits and city government are all struggling to execute. A few statistics from an SAP survey about digital readiness in public sector found:


71% of public sector organisations consider it important to interpret massive amounts of public safety data to identify risks, threats, and consequences of potential incidents, but only 13% are able to do so


56% of public sector organisations consider it important to transform government processes for asset maintenance with machine-to-machine capabilities and the Internet of Things, but only 9% are able to do so

62% of organisations consider it important to move from reactive to predictive business by combining data from assets, sensors, and other external sources with internal data and transactions, but only 15% are able to do so

(Source: SAP Performance Benchmarking 2017)


I believe public and private organisations struggle with execution because there are so many options of what can actually be done, that leaders are unsure about the stepping stones to success.


At SAP, we have these conversations with many organisations and we see a pattern emerging about what can be done and where successful organisations successfully garner return on investment.


Hint: They don’t start with technology. Successful organisations transform for the digital era using digital technology to accelerate their transformation:


1. The first thing these organisations do is break down internal silos and those between their organisation and other stakeholders both inside or outside of their organisation.


2. When they come together to map out a strategy, they start by putting the citizen’s or customer’s point of view at the centre of programme design using Design Thinking or a similar model to set the vision, making sure that the key stakeholders across the enterprise work together in well-defined processes.


3. Then they work back to the technology enablers that can make the highest value use cases a reality.


4. They then build pilots to learn and incrementally improve until they extend the solution across the enterprise and ecosystem.


With new digital technologies intersecting and combining, transformation will soon happen on a massive scale. Cities – and the organisations they work with – cannot afford to wait to begin their smart city initiatives. By thinking through the likely possibilities and developing scenarios with the expertise of SAP, you can prepare to maximise the positive outcomes in a future we’ve just begun to imagine.


Visit to find out how SAP can support your city transformation for the digital era.


Dante Ricci is Senior Director SAP Global Public Sector. His mission is to help empower people through technology to improve both efficiency and effectiveness to improve peoples’ lives.


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