In the fifth and final section of our Digital Communities quarterly report, we look at how cities can build the business case for sensor projects.
In Montreal, bus and subway riders who use the transit system’s OPUS smart fare card and have a smartphone, can receive personalized coupons from stores and entertainment venues that are located along the route of their ride. The information arrives in real time, so riders can just hop off the bus and walk into a nearby store or restaurant for discounted coffee, baguette or a meal.
It’s the kind of smart city project that would make any public official happy. Sensors in the fare card system tell the database which customers are riding on the bus and which route they are on. The information feeds into the app, which immediately transmits the discount coupons from participating stores to the customer’s smartphone.
The program, which merges the latest in smart technology with precision marketing, is designed to encourage loyalty among the public transit system’s 2.5 million riders who have an OPUS card. And it works. Ridership has increased 15 percent in the last three years. More riders means more revenue for Montreal’s transit system. The city also gets nonfare revenue from the business and retail partners who are paying to be part of the app program. Transit riders who were once just passengers, are now customers with an incentive to stay with public transit. And it’s an example of sensor-based technology that has a business plan that can quantify the value and return on investment for city officials.
So how do cities reach this point? Like so many innovative trends, the technology is not really the problem. Rather, it’s finding the political will to move to the starting point, assessing needs and making sure the right management systems are in place. “You start by evaluating your pain points, whether it’s parking, congestion, crime or, in the case of Montreal, a need to sustain stronger ridership in the city’s transit system,” said Jennifer Belissent, a principal analyst with Forrester Research. City officials need to engage the business community and the citizens to figure out what they want and where to invest, she added.
Cities also need to think about how they want to use the data captured by the sensors and they need to decide which data should be in the open and public, and which is not, according to Katharine Frase, chief technology officer of IBM Public Sector. “Lots of cities have added the role of chief data officer as a way to think through thoughtfully the policy that drives the sensor-based projects they want to deploy.”
And even though most experts agree that sensor-based applications are still a work in progress, especially in terms of the business case to justify the investment, it’s not too early to start thinking about the future.
“We’ve been doing this for four years now and we’re still learning,” said Inigo de la Serna, mayor of Santander, a city of 180,000 on Spain’s northern coast, which has become a test-bed site for sensor-based technology. The city received an $11.1 million grant from the European Union to develop and deploy different kinds of sensor-based services. “I strongly believe that cities of the future will rely on this kind of technology if our aim is to build smart, sustainable and efficient cities.”
To achive that kind of reliance with sensor technology, cities need to ask themselves four fundamental questions:
Next, cities need to plan any sensor project according to these six principles:
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