A Microsoft Services Enterprise Architecture Paper

The Smart City

Using IT to Make Cities More Livable
Abstract:
This paper explains the benefits and challenges of using information technology to solve typical
problems that cities face in delivering services to citizens. This paper is intended to help enterprise
architects, city officials, and city IT workers understand and answer the following questions:
How should a city leverage the latest information technologies?
What is the Microsoft vision for using information technology to deliver city services?
Why should a city work with Microsoft to improve delivery of city services?
Microsoft Services
Author:
Jan Hedlund, Architect, Microsoft Services
Publication Date:
December 2011
Version:
1.0
We welcome your feedback on this paper. Please send your comments to the Microsoft Services
Enterprise Architecture IP team at ipfeedback@microsoft.com.

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Using IT to Make Cities More Livable

2011 Microsoft Corporation
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Acknowledgments
The authors want to thank the following people who contributed to, reviewed, and helped improve this
document.
Contributors:
Eric Basha, Michele Bedford Thistle, and Alan Merrihew

2012 Microsoft Corporation. All rights reserved. This document is provided "as-is." Information and views expressed in this
document, including URL and other Internet Web site references, may change without notice. You bear the risk of using it.

This document does not provide you with any legal rights to any intellectual property in any Microsoft product. You may copy and
use this document for your internal reference purposes. This document is confidential and proprietary to Microsoft. It is disclosed
and can be used only pursuant to a non-disclosure agreement.


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Using IT to Make Cities More Livable

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Table of Contents
1 PROVIDING CITY SERVICES IN CHALLENGING TIMES ............................................................................................ 1
1.1 SOCIETIES IN TRANSITION ....................................................................................................................................... 1
1.2 STAKEHOLDERS IN GOVERNMENT ............................................................................................................................ 1
1.3 DRIVERS FOR CHANGE ........................................................................................................................................... 1
1.3.1 Enhanced IT Efficiency .............................................................................................................................. 2
1.3.2 Re-Engaging Citizens ................................................................................................................................ 2
1.3.3 Providing Social and Economic Opportunity ............................................................................................ 2
2 BREAKING DOWN THE SILOS ................................................................................................................................. 3
2.1 GOVERNMENT BECOMES SERVICE PROVIDER ............................................................................................................. 3
2.2 ALIGNING BUSINESS STRATEGY AND IT ..................................................................................................................... 4
2.3 BENEFITS OF A SMART-CITY STRATEGY ..................................................................................................................... 4
2.3.1 Complexity ................................................................................................................................................ 7
2.3.2 Focus on the Citizen .................................................................................................................................. 8
2.3.3 Examples of Citizen-Oriented Processes ................................................................................................... 8
2.3.3.1 Moving to the City ................................................................................................................................................ 8
2.3.3.2 Opening a Restaurant ........................................................................................................................................... 8
2.3.3.3 Coaching Citizens .................................................................................................................................................. 8
2.3.3.4 Planning the Commute ......................................................................................................................................... 8
2.3.4 Setting Priorities ....................................................................................................................................... 9
2.4 SUSTAINABILITY PROGRAMS, TECHNOLOGIES, AND INVESTMENTS ................................................................................ 10
2.4.1 Sustainability Initiatives in a Smart City ................................................................................................. 10
2.4.1.1 Environmental Sustainability ............................................................................................................................. 10
2.4.1.2 Social Sustainability ............................................................................................................................................ 11
2.4.1.3 Financial Sustainability ....................................................................................................................................... 11
3 WHY THE MICROSOFT ENTERPRISE STRATEGY PROGRAM?............................................................................... 14
3.1 ACHIEVE STRATEGIC BUSINESS OBJECTIVES.............................................................................................................. 14
3.2 DEVELOP IT INVESTMENTS ................................................................................................................................... 14
3.3 THE CHALLENGE AT HAND .................................................................................................................................... 14
3.4 WORKING ACROSS THE ORGANIZATION................................................................................................................... 15
3.5 MICROSOFT VALUE REALIZATION FRAMEWORK ........................................................................................................ 15
3.5.1 360 Assessment ...................................................................................................................................... 16
3.5.2 Initiative Planning .................................................................................................................................. 16
3.5.3 Value Realization .................................................................................................................................... 17
3.6 TOOLS .............................................................................................................................................................. 17
3.6.1 The Cranfield Benefits Dependency Network ......................................................................................... 18
3.6.2 Roadmap ................................................................................................................................................ 19
3.7 BIG-PICTURE LOOK AT THE ENTIRE IT INVESTMENT ................................................................................................... 19
3.8 DEPTH OF TECHNOLOGY UNDERSTANDING .............................................................................................................. 19
3.9 GAIN MORE VALUE FROM ENTERPRISE AGREEMENT ................................................................................................. 20
3.9.1 Case Study: City of Malm, Sweden ....................................................................................................... 20
4 RESOURCES .......................................................................................................................................................... 21
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5 REFERENCES ......................................................................................................................................................... 22


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Using IT to Make Cities More Livable

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1 Providing City Services in Challenging Times
The challenges that modern cities face are similar worldwide as citizens demand better service for their
taxes. Some cities respond to this challenge by focusing on empowering their civil servants. Smart cities
focus instead on empowering citizens with the right tools to connect to the right information.
1.1 Societies in Transition
The persistent fiscal and operational pressures on many cities and local governments today reflect
massive changes in societies around the world. Some regions are experiencing rapid population growth,
while others are seeing population declines. Governments are witnessing rising costs and increasing
pressures on resources such as labor, transportation, communications infrastructure, energy, water, and
other basics. Citizens are demanding better, faster, easier service from city government, regardless of
location, time, day, or method of communication. Citizens want to engage with city government as
consumersto interact as if the city was an online retailer or bank.
For many government entities, the constant search for fiscal and operating efficiencies produces
centralized and automated processes. Also, increasing competition for human capital in major
metropolitan areas pushes government departments and agencies to modernize.
The ideal organizational culture for government entities is one of self-sustaining innovation. Today,
public/private partnerships are launching ground-breaking technology initiatives with ever-improving
results for cities. These technology projects are realizing quantifiable success in advancing and
improving government services, leading to better return on investment (ROI) and opportunities to share
best practices in technologies.
1.2 Stakeholders in Government
Citizens typically want better accountability, transparency, and service delivery from city governments.
Elected officials and business people in many cities also demand operational changes. The business
driver for political leaders is often the need to deliver on campaign promises, which can cause radical
shifts in direction for IT departments when new officials are elected. Leaders in government
administration, management, and IT have to balance the expectations of newly elected officials with the
capabilities of the organization.
In addition, cities must implement state, national, and international initiatives. Regional business leaders
push for supporting incentives, limited bureaucracy, skilled workers, and growth. Cities also require
effective infrastructures to service internal and external needs over the short and long term.
1.3 Drivers for Change
City IT departments often have multiple competing mandates. Typically, they need to adopt leaner
processes and reduce IT complexity to reduce costs while enabling citizens to consume city services
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from the latest mobile devices. At the same time, cities need to support citizens who cannot use
electronic services.
1.3.1 Enhanced IT Efficiency
Cities are constantly pressured to become more efficient by improving their operations and streamlining
business processes. To better measure their success in these efforts, many government entities focus on
key performance indicators (KPIs) and scorecards, or they explore alternative structures such as shared
services, merged operations, and outsourcing.
A citys CIO often must choose between buying a commercial off-the-shelf (COTS) application and
developing a custom application to integrate with current systems and platforms, which can be costly.
Integration challenges are often why changes in IT and associated business processes can be slow and
expensive to implement. IT vendors do not always consider systems architecture issues, and COTS
applications often contain their own infrastructure capabilities instead of relying on shared capabilities.
The result can be chaotic when a developer must integrate the COTS application with a new system.
1.3.2 Re-Engaging Citizens
With so many citizens now using mobile devices, tablets, and PCs, cities can deliver personalized services
how and when citizens want them. It is easier than ever for governments to share information
transparently and appropriately because new technologies enable widespread distribution of relevant
data. Information sharing can re-energize political engagement and encourage wider participation in
public processes.
Electronic services (e-services) benefit citizens in ways that cities can measure in money. Unfortunately,
few cities today know how to quantify e-service benefits. To find out how one European city quantifies
the benefits of e-services, see the Setting Priorities section later in this document.
1.3.3 Providing Social and Economic Opportunity
By increasing access to digital services, government agencies foster innovation and personal success.
Many cities have no citizens left behind policies that use proxies or customer centers to support
citizens who cannot use e-services. These policies help citizens develop the skills and knowledge to
succeed in the new economy. Cities can adopt architectures in which customer centers have CRM
capabilities and are integrated with business-support systems to focus on the citizens perspective.
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2 Breaking Down the Silos
Most government structures have evolved by focusing on internal operations that support government
activities rather than on optimizing service delivery based on citizens needs. This evolution has created
vertically siloed applications that cannot easily exchange data with other applicationsan IT Tower of
Babel full of aging applications that only city employees, not citizens, can use. Smart cities consider the
needs of diverse constituents such as senior citizens, workers, students, and businesses and realize they
can be more efficient and effective by involving their constituencies and putting them at the center of
decision-making processes.
2.1 Government Becomes Service Provider
To reduce isolated data and business processes and to encourage better data-sharing and flow, well-
managed cities are establishing shared business capabilities, data-rich common infrastructures, and
service-oriented architectures. The challenge for IT is to prove that centralizing or restructuring services
is practical and useful, and to deliver a platform that enables the business changes that are often
required to support political goals. With the opportunities available from new technologies and a
strategic three-to-four-year roadmap, Microsoft can help a city create a common language and vision to
move ahead on shared infrastructure and e-services projects that deliver direct business value to city
departments, agencies, and ultimately, the citys population.
Such solutions do not always emerge from the creation of new services. By letting independent software
vendors (ISVs) and value-added resellers (VARs) reuse existing data and processes, cities can extend
their services with commercial applications. Allowing outside parties to integrate city data and processes
into commercial products often makes it easier for citizens to find and consume information when and
how they want it, such as online information about local traffic, public transportation, the status of
public services, and more. Citizens can use apps from mobile devices such as the Apple iPhone, Google
Android, and Microsoft Windows Phone. Cloud computingemploying remotely hosted servers, data
centers, and applicationscan help relieve city agencies of the costly burden of owning and maintaining
hardware and some software. Cities can easily enable cloud computing by using the Microsoft Windows
Azure platform, a set of cloud services and technologies that developers can use to manage data, create
e-services, and increase transparency.
1

Cities can provide many e-services directly, such as booking public facilities, granting permits, and
distributing health information. For example, a city resident could swipe an electronic ID card at a
municipal gym to open a reserved racquetball court, unlock a locker, and pay for a parking spot. The city
can use data from these transactions to adjust the gyms heating/cooling system based on projected
occupancy. Other scenarios include helping an entrepreneur who wants to open a restaurant or
enabling an elderly parents caretaker to find health and financial information.

1
Windows Azure Platform for government cloud computing.
www.microsoft.com/industry/government/products/azure_platform/default.aspx
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2.2 Aligning Business Strategy and IT
Now is the time to improve the connection between business drivers and IT initiatives. Although every
project is intended to advance information flow and communication, sometimes it is unclear if progress
has been made. In fact, a recent study by McKinsey found that 71% of IT and business executives think
that IT must be tightly integrated with the business strategy. But only 27% of executives thought that
this actually happened in their own organization.
2

2.3 Benefits of a Smart-City Strategy
New technology provides better ways to measure key performance indicators (KPIs) that really matter
to citizens. These improvements let city agencies move toward a smart city model that puts the citizen
at the center of services.
3
In the smart city, government becomes a platform for citizen participation
rather than simply a service provider. Smart cities provide a central foundation for solutions that
support multiple services. They optimize the use of IT to deliver measurable value to stakeholders in
areas such as infrastructure, transportation, utilities, education, and buildings.
Today, city processes are optimized for the civil servant or the city agency, not the citizen, which is
reflected in the way cities deliver services. For example, to open a restaurant, a citizen must often work
with several agencies to get the necessary permits. A slow process in one department can delay the
citizens permit application. Typically, none of the other departments improve the quality of their
service by using the first departments process or the data that it generates.
Microsoft recommends a new way to deliver services and IT architecture. A Microsoft enterprise
architect (EA) can help identify business drivers using the smart city model and help determine what
projects are needed to transform the city. Microsoft can then assist the city as it develops a roadmap
and architecture to change siloed processes into citizen-centric services. For example, a Microsoft EA
can help a city take advantage of cloud computingservices, applications, and data storage delivered
online through powerful servers. Cloud computing can make IT systems scalable and elastic so that city
IT departments can add computing resources just when they need them. Using cloud computing, a city
does not have to own a huge data center or develop a massive application to launch a service that
millions of citizens can use. Also, third parties can use public data that the city stores in the cloud to
create value-added applications for citizens.
The following figure shows the state of many cities today, with functional areas that do not typically
share information. In a smart city, on the other hand, capabilities and services are shared across
departments so that they dont have to be recreated.

2
Michael Chui, Par Edin, and James Manyika. McKinsey Quarterly, November 2009. Time to Raise the CIOs
Game. (www.mckinseyquarterly.com/Time_to_raise_the_CIOs_game_2447)
3
Wikipedia. Smart city. (http://en.wikipedia.org/wiki/Smart_city) and Forrester Research, Helping CIOs
Understand Smart City Initiatives February 11, 2010
http://www.forrester.com/rb/Research/helping_cios_understand_smart_city_initiatives/q/id/55590/t/2
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Figure 1: Traditional siloed business model vs. citizen-first model with shared business functions
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Becoming a smart city improves efficiency, creates a positive environmental impact, enhances security,
improves health, and simplifies construction permitting. These results lead to a more livable, appealing,
and economically viable city that is attractive to new citizens and businesses. The smart city can meet
the highest expectations for environmental, social, and economic sustainability.
For a city to change from the traditional model to the citizen-first model, it must have a mandate from
elected officials to shift power from local agencies to a central governance model. Siloed applications
must be thinner in both infrastructure and business capabilities to lower the total cost of ownership
(TCO) of information systems. Such an approach will also increase openness and internal efficiency, and
help focus on citizens needs. In addition, transferring budgets and expertise from local agencies to a
shared IT service reduces TCO while increasing the value to all users of the information processes.
Business capabilities get shared to a higher extent, which helps reduce business and IT costs as well as
the complexity of IT.
To support a smart city citizen-first model requires a joint governance model to closely monitor
performance and manage investments by planning carefully and setting sound priorities. A city can use
the Cranfield Benefits Dependency Network and other planning techniques to understand and
implement what is needed.
A shared IT service organization must establish IT quality directives for technology implementations and
define reference architectures for business capabilities so that ISVs and local agencies understand how
to develop capabilities that will maintain a reduced TCO, increase productivity, and focus on citizens.
Table 1: IT characteristics of siloed architecturetraditional city vs. smart city
Traditional City Smart City
Buy or develop custom applications Invest in and reuse common IT and business
capabilities
Configure instead of buy or develop custom
applications
Slow and expensive to change, often because
of legal and procurement issues
Static services; seldom updated
Agile, quickly updated services
Lower total IT costs
Lower business costs
Simple for the city specialist who uses it often
Not simple for citizen or anyone outside the
city agency to use
Citizen at the center
Simple to use for all; user does not have to be a
specialist
Moves capabilities from specialist application to
customer care proxies that serve the citizen
E-service offloads part or all of the process from
the city specialist
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Traditional City Smart City
Data is expensive to integrate and reuse
Silos are not designed to follow integration
guidelines
Data easy for ISVs to integrate and reuse
Reference architectures and other guidelines
facilitate integration and reuse of data and
business capabilities
Higher data quality
Low common infrastructure costs; high total IT
costs
High common infrastructure costs; low total IT
costs
Not ready for cloud services Ready for cloud services
Citizen excluded from city processes Transparency, participation, and empowerment
of citizens
Use of city workers labor is lower
Less automation
Use of city workers labor is higher
Centralized customer-care centers that serve
many agencies, thus reducing business costs
Specialists do many non-specialist tasks Specialists offload non-specialist tasks

To change from a traditional city to a smart city, a citys IT department needs a political mandate to
transform support systems and how city employees serve citizens. If this transformation is done
properly, the TCO of IT will be lower and employee productivity and citizen satisfaction will be higher.
But to make such a change, the IT department must centralize some employees, resources, and services.
2.3.1 Complexity
IT can be and often is a key enabler of improving citizen services and government efficiency. But IT
departments and the IT industry need to address several obstacles to achieve such improvements and
efficiencies.
Many people are aware of Moores Law, which posits that the number of transistors in an integrated
circuit (or microchip) will double about every 18 months and thereby reduce the cost of computing
hardware by an equivalent amount every 18 months. Fewer people are aware of this laws corollary:
Moores Flaw, which posits that IT systems double in complexity every 18 months and will eventually
overwhelm all the advantages of Moores Law.
The IT industry cannot continue to add complexity to the experience of citizens, outside agencies, and
city employees. The IT industry must reduce complexity by making technology easier to use, and by
ensuring that solutions work in harmony with each other and with those who use the technology.
The consumerization of IT also increases complexity for city IT departments. Citizens expect to use their
favorite mobile devices to interact with the city, and city employees expect to bring their own devices to
work. IT departments often focus on supporting devices from an infrastructure standpoint, but just
allowing a device to participate is not enough. City IT systems must adapt to the user experiences,
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operating systems, form factors, and hardware capabilities of many new devices annually. It is
tremendously difficult for cities to meet that charter. Again, IT needs to steer ISVs toward eliminating
silos and publishing open data to the cloud to let external application developers build comprehensive
applications for a variety of devices.
2.3.2 Focus on the Citizen
Many cities have optimized the performance of siloed applications for the internal processes that
support their agencies core business activities. Its not easy, or sometimes even possible, to integrate
such siloed applications with applications that support other business processes, outside parties, and
citizens. Interaction with external users is too often point-to-point and paper-based.
2.3.3 Examples of Citizen-Oriented Processes
The following scenarios illustrate how a city can use technology to focus on the citizen rather than on
the city process.
2.3.3.1 Moving to the City
A potential resident of a city often wants to know what others think of the city and its services such as
schools, housing availability, building permits, social benefits, commuting services and traveling
statistics, bike, car, and public transportation facilities, and health care services. The city might not
control all of these services, so the city needs to interact with other agencies and private service
providers to give potential residents the information they need.
2.3.3.2 Opening a Restaurant
A potential restaurant owner needs to get all the permits that the city requires to open the restaurant,
such as liquor permits, environmental permits, permits for outdoor seating, fire-code permits, and
more. Often these permits come from different agencies in the city or local government, and the
inability to obtain any one of them can prevent the restaurant from opening for business. A technical
solution that eliminates siloed agency processes can make it easy for the restaurant owner to apply for
all the permits online in one place.
2.3.3.3 Coaching Citizens
A citizen with special needs may require a personal advocate or one-to-one counseling to help them in
some way. For example, they might need to manage anger or substance-abuse problems, obtain
education, exercise, find a job, or learn the local language. A citizen coach web portal could put such a
citizen in touch with the right mentor to obtain the services they need.
2.3.3.4 Planning the Commute
A citizen may want to know how conditions such as snow, accidents, public transportation delays, street
maintenance, and sports events will affect the commute to and from work. A smart city shares this
information with internal and external public agencies, private service providers, and ISVs that can
develop applications to meet the needs of the commuter. There is no conflict between the need to
improve internal efficiency, reduce TCO, and put citizens first. When information can flow openly and
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securely, the citys needs are met. A smart city strives for 100 percent digital information and flow
between systems and users. This approach encourages open government, which is now the law in
Europe. In 2003, the European Union released a directive that mandates open information in the public
sector. European cities are required by law to obey this directive.
4

2.3.4 Setting Priorities
Many cities have difficulties in setting priorities, because it is hard to measure benefits to citizens in
terms of money. The city of Stockholm has implemented a two-part model that quantifies how much the
city and its citizens will benefit from a proposed e-service. Stockholm will likely fund an e-service if it
gets good scores in the following areas:
How well the e-service supports the citys KPIs. The higher the score, the better the chance that the
e-service will meet the citys main objectives.
How much the e-service will measurably benefit citizens. Stockholm quantifies this benefit by
multiplying the number of expected users of the service by the expected value in Swedish Kroner
(SEKs) for each citizen to calculate the e-services estimated value to all citizens.
The Cranfield Benefits Dependency Network (BDN) model that Microsoft EAs use also examines the
contribution from IT capabilities that exist or need to be deployed to meet business objectives. In a
smart city, many IT investments generate good ROI because they serve business objectives across many
organizational units.
This approach is not accepted everywhere. Many citizens complain that, for example, road construction
takes too long to complete or interrupts traffic. Many cities respond that it is too expensive to make city
employees or outside contractors work around the clock. But this response ignores a key externality that
cities should calculate: the cost to citizens when the flow of traffic is interrupted. Having tens of
thousands of commuters stuck in traffic is quantifiably costly.


4
European Commission. Public Sector InformationRaw Data for New Services and Products
(http://ec.europa.eu/information_society/policy/psi/index_en.htm)
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2.4 Sustainability Programs, Technologies, and Investments
There are many popular definitions of
sustainability, but the most frequently quoted
is from the report Our Common Future by the
World Commission on Environment and
Development, often named for its chairwoman
as the Brundtland Commission.
5

2.4.1 Sustainability Initiatives in a Smart City
Development that meets the needs of present citizens without compromising the needs of future
citizens is important for the prosperity of all cities, whether theyre smart or not. Sustainable
development requires competencies in three spheres: social, environmental, and financial, often
described by their synonyms as the three Ps or triple bottom linepeople, planet, and profit. In the
city of Malm, Sweden, IT programs are sorted by citizens first, then internal efficiency and lower TCO,
but are related to sustainability, among other goals.
2.4.1.1 Environmental Sustainability
Energy-efficient housing. Smart cities can buy back and return to the electric grid any power
generated by solar panel arrays, heat drill holes, and other small-scale and home-based electricity-
generating facilities.
Efficient transportation. In most cities, its hard for citizens to learn how to travel while generating
the least amount of emissions, or to find safe routes for biking. Smart cities use geodata and publish
constantly updated information about current traffic conditions and transportation alternatives so
citizens can better plan their travels.
Power grids. Many households in Europe only have a 240-volt power input. Updating these
household electric systems allows citizens to charge electric cars at night while using electricity for
heating, washing, and other uses.
Cloud services. Many cities can take advantage of cloud computing, which reduces the number of
hardware components and therefore the energy needed for IT systems.
Digitizing and eliminating paper. Converting paper documents into digital documents reduces the
number of trees cut and the energy required to produce, transport, and dispose of paper. Digitizing
paper documents is a prime example of the benefits of dematerializationdoing more with less by
reducing the amount of materials needed in economic processes.
6

Unified Communications (UC). Dematerializing the daily commute by empowering people to
telework and meet via electronic conferencing can help government agencies reduce their
environmental impact, reduce facility operating costs, ensure continuity of operations, improve

5
Wikipedia, The Brundtland Commission (http://en.wikipedia.org/wiki/Brundtland_Commission)
6
Wikipedia, Dematerialization in economics (http://en.wikipedia.org/wiki/Dematerialization)
Sustainability defined:
Sustainable development is development that
meets the needs of the present without
compromising the ability of future generations to
meet their own needs. The Brundtland
Commission, 1987
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employee health, morale, loyalty, and retention, and more.
7
Cities can also use UC to make expert
officials available to citizens conveniently and cheaply.
2.4.1.2 Social Sustainability
Integration of immigrants. Well-designed e-services can help immigrants find jobs or housing, learn
a new language, and become productive citizens.
Citizen coaching. Better automation can help people who have difficulties in using online tools take
advantage of government e-services.
Spending more time with family and community. Using IT for telework provides city workers with
more time to spend with their families and communities, which can help make them better parents,
family members, and citizens.
Scheduling and using facilities. Citizens can use e-services and smart cards to reserve sports
facilities and enter secure buildings without using physical keys.
Elder care. Its expensive to move people into elder care. By using IT services, more health care and
advice can be brought to the elderly at home. Care specialists can use UC to connect to the elderly
to supplement in-person care. Doctors can use electronic vaults to store patients health
information, and when its in the vault patients can share it with their care team. And health portals
built on collaboration platforms can provide a foundation for more streamlined and efficient
information sharing among healthcare professionals.
Information Lifecycle Management (ILM). Citizens need to trust that personal data will be retained
and destroyed properly and managed securely. Maintaining the privacy of personal information is
often required by law. Maintaining robust ILM policies, operations, and infrastructure can help
ensure privacy.
Education. Schools can use UC tools to bring authoritative speakers into classrooms even in remote
areas.
Welfare and unemployment insurance. E-service portals can explain to welfare recipients what they
must do to apply and what kinds of benefits they will receive.
Security and safety. Most people are afraid to walk in neighborhoods that they think are dangerous.
Providing open, reliable statistics about crime in all areas of a city can help make its citizens feel
more secure.
2.4.1.3 Financial Sustainability
Open data. The cloud provides new ways to deliver services and information to cities and
communities. Open datagiving citizens and software developers access to public dataallows
developers to create useful applications that can reduce agency costs and resources. Open data
applications enabled by the cloud are often the most cost-effective way to provide the richer, more
personalized experiences that online users and mobile device users want.
Business Intelligence (BI) software. Success in sustainability is especially hard to measure. BI
software makes measuring it easier. BI software helps cities make more informed decisions about
sustainability initiatives by aggregating many sources of data into an understandable format.
8


7
U.S. General Services Administration, The Benefits of Telework, September 2008
(http://archive.teleworkexchange.com/pdfs/The-Benefits-of-Telework.pdf )
8
Ryan Dochuk, Microsoft Corporation. Business Intelligence and Sustainability: Getting Smarter About
Sustainability. (http://download.microsoft.com/download/7/B/7/7B76F413-0152-4BD9-BB64-
6BC5D32E70CB/23348_A_BI_environmental_sustainability_CDN_Business_Advertorial_FINAL.doc)
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E-services. City services such as paying a utility bill or traffic ticket, applying for a city job, finding
community resources, checking on the status of a permit, registering to vote, reporting a lost pet,
and more can easily be done online. E-services such as these are relatively easy for cities to
implement as interactive transactions.
The Balanced Scorecard (BSC). The Balanced Scorecard helps organizations consider non-monetary
factors such as environmental and social qualities in the calculation of organizational success.
Service-oriented architecture (SOA). Two keys to sustainability are reuse and sharing of services.
SOA provides a way to share and reuse applications and systems as services, thereby encouraging
and simplifying their sustainability.
Electronic Identity Cards (e-IDs). By using e-IDs, citizens can identify themselves just once to submit
information to multiple government agencies or to use government e-services.
Customer Relationship Management (CRM) software. CRM software makes it easier for city
officials to manage relationships with citizens sustainably.
Document and case management. The right technologies can greatly simplify document and case
management while reducing the consumption and printing of paper.
Information technology matters to citizens and cities. IT enables a city to add value and make life easier
for citizens in multiple ways. The following table shows some of the technologies and IT-enabled
services that can help put citizens first, improve internal efficiency, and reduce TCO of IT while
promoting social, environmental, and financial sustainability.
Table 2: Enabling technologies and services in smart cities
IT Priority/
City Priority
Social
Sustainability
Environmental
Sustainability
Financial
Sustainability
Citizen first
Customer Relationship
Management
Business Intelligence
The Balanced Scorecard
Citizen coaching
Sharing of data with
external ISVs who create
apps
Electronic identity cards
Business Intelligence
The Balanced Scorecard
Document and case
management (digitizing)
Unified Communications
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Procurement
Ecological city planning
Environmentally
sustainable housing
Biking services
Travel planning
Open data to reduce
TCO
Business Intelligence
The Balanced Scorecard
Document and case
management (digitizing)
Unified Communications
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Procurement
Private and public
clouds
Service-oriented
architecture
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IT Priority/
City Priority
Social
Sustainability
Environmental
Sustainability
Financial
Sustainability
Internal
efficiency
Customer Relationship
Management
Business Intelligence
The Balanced Scorecard
Document and case
management (digitizing)
Unified Communications
Translation services
Document and case
management (digitizing)
Unified Communication
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Information Lifecycle
Management
Tablets
E-Learning

Customer Relationship
Management
Business Intelligence
The Balanced Scorecard
Document and case
management (digitizing)
Unified Communication
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Information Lifecycle
Management
TCO of IT
Unified Communications
Customer Relationship
Management
Service-oriented
architectures
Web services
Electronic identity cards
Document and case
management
(document digitization)
Unified Communications
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Information Lifecycle
Management
Electronic identity cards
Document and case
management (document
digitization)
Unified Communications
Infrastructure
improvements (modern
operating systems,
virtual private networks)
Information Lifecycle
Management
Electronic identity cards
Service-oriented
architecture
Private and public
clouds

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3 Why the Microsoft Enterprise Strategy Program?
Moving from an infrastructure of isolated data stores, processes, and systems to a model of joint
planning, governance, and execution requires a determined effort. The Microsoft Enterprise Strategy
Program (ESP) is dedicated to providing strategic, focused advice to governments. This program helps
Microsoft government customers optimize the value of technology investments, innovate on the right
strategies, drive new service opportunities, reduce costs, and mitigate risks. These engagements create
a common understanding and language between IT and other parts of an organization. Enterprise
strategy and architecture services help organizations understand how to better use technology to
deliver results that are tied to strategic drivers.
Microsoft Services uses solutions that involve open standards and encourage reuse of current and non-
Microsoft technology. Roadmaps provide a high-level tool for discussions and decision making. Using
these strategies and tools, government organizations can make better IT decisions, increase the speed
of positive change, and control costs.
3.1 Achieve Strategic Business Objectives
With a Microsoft EA in place, a citys IT department can better identify and prioritize the most beneficial
opportunities for IT and process improvement. Programs like ESP give an IT department a more holistic
view of strategy, processes, information, and IT assets. An EA is a specialist that connects a network of
people with relevant experience to design processes that accelerate time-to-value for IT changes. EAs
take an enterprise-level approach to linking the mission, strategy, and processes to an organizations IT
direction.
3.2 Develop IT Investments
An IT portfolio can be underused in a city-scale organization. The ESP is designed to help a city extract
the most value from its IT assets and use them to build a platform for operational strength that can be
dynamic enough to support changing business requirements. A Microsoft EA can set up oversight and
drive adoption to help ensure the value of IT investments is realized.
3.3 The Challenge at Hand
Because technology is constantly changing, Microsoft EAs constantly educate themselves about new IT
trends and opportunities. For example, with more and more people using advanced devices and
Internet-based communication methods, IT technologies are more consumerized than ever.
9
In other

9
Gartner, October 20, 2005. Gartner Says Consumerization Will Be Most Significant Trend Affecting IT During
Next 10 Years. (www.gartner.com/press_releases/asset_138285_11.html); Ziff Davis, May 25, 2011. The
consumerization of IT: is resistance futile? (www.zdnet.com/blog/btl/the-consumerization-of-it-is-resistance-
futile/49390)

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words, consumer technologies that people start using outside of work often evolve and mature to
become valuable tools at work.
Microsoft EAs can use the Microsoft Research departmentone of the worlds best-funded and most
advanced IT research facilitiesto stay informed about IT and societal possibilities. EAs are also
equipped with networks of contacts and a personal knowledge of world-class consumer products and
services. Microsoft EAs and their contacts are uniquely positioned to surmount information barriers with
big-picture assessments that include the future as well as the present.
3.4 Working across the Organization
The Microsoft methodology includes an evaluation of an organizations key challenges, people and
processes, application capabilities, and technology platform, as the figure below shows. By approaching
information flow from these complementary angles, EAs have often driven breakthroughs in efficiency
and cost saving.

Figure 2: Microsoft Enterprise Strategy Approach
3.5 Microsoft Value Realization Framework
The Microsoft Value Realization Framework (VRF) is designed to address the following common
customer concerns:
Business strategy and goals may be well-understood, but the IT strategy and prioritization of
activities is not always traceable to the business strategy and the value of IT investment is not
clearly demonstrated.
Value prediction is based on best guesses, with little if any basis in historical evidence.
The value of IT investments is seldom measured, and the value of IT is not quantified or tracked.
IT activity may be slow to reflect changes in the business strategy.
Customers do not believe they get the best ROI from their investment.
IT departments usually understand the issues and strategies of their businesses, but they often struggle
with how to show that their activities align with business strategy. The traceability of IT projects to
business value often disappears in the shifting activities that are part of normal IT efforts. The value of IT
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activities is hard to demonstrate in terms of what IT activities are trying to achieve, and its difficult to
predict value for upcoming activities without consistent measurement and value-related data collection.
Part of the problem is that IT is often perceived as slow to react to the business. It often has many
projects underway, and it can be challenging to determine which should come first and deliver the most
benefit. With the right business-IT alignment, value traceability, and project prioritization, IT can better
demonstrate the ROI of its activities. Traceability links IT activities to business strategies and implements
transparent measures that are relevant to the business. This combination directly predicts the value of
IT, aligning it with business objectives, and demonstrates value realization.
The ESP consists of three initiative types, each based on work done before, as the figure below shows.

Figure 3: Microsoft Enterprise Strategy Program
3.5.1 360 Assessment
This assessment is a high-level planning initiative that identifies the key business strategies, objectives,
and drivers. A series of assessments are identified and executed that are designed to pinpoint
opportunities to use technology to support business goals. The end result of a 360 assessment is a set of
prioritized opportunities that the customer approves for detailed analysis and planning.
3.5.2 Initiative Planning
Each major initiative that results from the 360 assessment leads into an initiative planning project. These
projects focus on completing the detailed planning that is necessary to execute the project. The
deliverables for an initiative planning project define the plan for proceeding, the underlying architectural
changes, a business-case analysis, and a value-realization plan for measuring the realized benefits.
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3.5.3 Value Realization
This initiative provides the oversight and governance processes to monitor the completion and adoption
of the initiative as it moves beyond the planning phase. A key aspect of value realization is to measure
and report the benefits realized against the projections made in initiative planning.
3.6 Tools
The Microsoft Services ESP team uses several models and tools to understand and make
recommendations to a government customer. The VRF approach always starts with understanding WHY
a change is required, plus the benefit to be derived from the change. Next is the identification of WHAT
needs to change in the business to realize the change, qualified by any restrictions on WHERE the
change will be made (in business functions through to geographies).
HOW change is implemented is described through programs that work on people, process, and
technology. From objectives to technologies, there are stakeholders WHO own the current state; these
stakeholders will have to participate in the change and be responsible for realizing the value. WHEN all
of the change activities are aligned and dependencies are understood, the organization can finally
describe a plan of action and begin to enact the change.
The VRF methodology uses the core models to capture, analyze, and structure the relevant information
into a coherent and actionable plan. It is a structured approach to organizing and analyzing customer
data and developing a value-driven program of change.
Table 3: Microsoft ESP models and tools
Model Component Library Source
IT Portfolio Assessment
Provides a framework with which to analyze and categorize investments
in the IT portfolio. This model can be used to align IT spending with
organizational goals, and to compare the contributions of different
applications to the strategy.
Benefits Dependency
Network (BDN)
Provides a structure to define the traceability from business strategy to
IT implementation.
Business Capability
Comes from Microsoft Services Business Architecture (MSBA), a unique
approach that Microsoft developed and that uses the concept of
capabilities to define a business architecture.
IT Services
Visually represents the current state, future state, and impact of
projects.
Conceptual Architecture
Helps users understand the problem domain, and often breaks it down
into simpler domains and the relationships between them.
Roadmap
Describes the transition from the current state to the desired state. In
the VRF format, the roadmap also clearly shows the relationship
between business objectives, new services, and technologies.
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3.6.1 The Cranfield Benefits Dependency Network
Microsoft EAs use the Cranfield Benefits Dependency Network (BDN) methodology, shown in the
following figure, which captures and expresses what an IT department must do to support user needs. In
a siloed city IT department, functional owners dont rely on shared IT and shared business capabilities.
Business opportunities and commonalities are not recognized. By iteratively filling out the BDN, a city IT
department can better understand external and internal business process drivers, strategic objectives,
and benefits that can be expected as results of business changes. It can also help them understand what
enabling changes and technology stacks need to be in place to support those changes. By looking at
missing technologies and investment options in technology and common business functions, the
business case for a change may be even better than before.
Also, discussions between the city IT department and city decision-makers can foster agreement that
leads to the development of better, more cost-effective business solutions. By adding shared
infrastructure services and shared business functions to the new architecture, business support systems
may be faster to deploy, less expensive, and yield a better ROI.

Figure 4: Cranfield Benefits Dependency Network
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3.6.2 Roadmap
The program of IT change is described on a roadmap that links the timeline of business objectives with
the delivery of new IT Services and deployment of technologies. The citys IT department creates a first
iteration of the roadmap and commits to deadlines based on deployment capacity. In parallel, the
Microsoft EA looks at the maturity of the citys IT services, which helps the IT department understand
weaknesses and gaps in its services. The figure below shows a typical city IT roadmap.

Figure 5: Sample roadmap
3.7 Big-Picture Look at the Entire IT Investment
A city that uses the services of a Microsoft EA is not limited to evaluating only Microsoft products and
services. Microsoft EAs are experienced at helping cities continue to get value from all IT investments,
whether they came from Microsoft or not. A Microsoft EA engagement is conducted objectively to
develop recommendations that support the best interests of the city and its stakeholders. Microsoft
software supports open standards and interoperability.
3.8 Depth of Technology Understanding
The variety of software applications and servers associated with Microsoft and its partners is vast. EAs
are familiar with not only past and present computing solutions, but look to the future with continuing
education and exposure to new IT concepts. With a breadth of accessible subject matter experts and
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technologies, Microsoft EAs bring an exceptional level of background and knowledge to the support of
government customers.
3.9 Gain More Value from Enterprise Agreement
Microsoft EAs are trained in Microsoft licensing details as well as high-level licensing opportunities. A
city that has purchased multiple licenses can often gain savings after the EA assesses the citys assets.
3.9.1 Case Study: City of Malm, Sweden

Mapping IT Services in the city of Malm, Sweden
City. Malm, Sweden has about 19,500 employees and 1,100 managers. Ten people work in the
citys IT department. Malm worked with the Microsoft Services Enterprise Strategy and
Architecture group to learn how to optimize its IT services for its citizens.
Challenge. To create a common vision of the organization's IT solutions, benefit more from
purchased licenses, and prioritize future service offerings.
Solution. Malm entered into a three-year agreement that lets the city benefit from strategic
advice from Microsoft. The agreement includes ongoing consulting with a Microsoft EA.
Result. The expected result is to optimize business benefits across the city by using the Microsoft
platform across the city.
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4 Resources
Additional Microsoft offerings that customers can use:
Microsoft Unlimited Potential. A company-wide effort to bring together business and philanthropic
approaches to make technology more relevant, accessible, and affordable. It encourages close
collaboration among businesses, local governments, educational institutions, and community
organizations. To learn more, see:
www.microsoft.com/about/corporatecitizenship/en-us/about/unlimited-potential
The Child Exploitation Tracking System (CETS). A highly secure, web-based software solution based
on Microsoft technologies that enables government and law enforcement agencies to collaborate
on investigations into the exploitation of children, consistent with existing legal agreements. CETS
helps investigators easily import, organize, analyze, share, and search information and evidence
from initial point of detection all the way through to investigation. To learn more, see:
http://en.wikipedia.org/wiki/Child_Exploitation_Tracking_System
The Microsoft Security Cooperation Program (SCP) helps organizations around the world reduce
the risks of system attacks by working together to better respond to computer security incidents.
The program provides a structured way for governments to collaborate and exchange information
on security initiatives in high-impact areas such as computer incident response, attack mitigation,
and citizen outreach. To learn more about it, email SCP_team@microsoft.com.
The Microsoft Local Language Program (LLP) extends the benefits of Microsoft technology to users
around the world in their own language. The program builds partnerships with governments,
universities, and local authorities. The primary goal of the program is to preserve local languages
and cultures through technology. But the benefits of this program extend far beyond simple
translations. To learn more, see: www.microsoft.com/unlimitedpotential/programs/llp.mspx
Open Government Data Initiative (OGDI). The OGDI is a cloud-based collection of open government
software assets that enables publicly available government data to be easily accessible. Using open
standards and application programming interfaces, developers and government agencies can
retrieve the data programmatically for use in new and innovative online applications or mashups
that can help improve citizen services, enhance collaboration between government agencies and
private organizations, and increase government transparency. To learn more, see:
www.microsoft.com/industry/government/opengovdata/default.aspx
Government workplace modernization. The advent of personal computing created a disruptive
effect on technology in the enterprise. Today, consumerization of IT is having the same effect on
government agencies. Microsoft government workplace modernization solutions seek to improve
information workers productivity through innovative technologies and optimized process
management. To learn more, see:
www.microsoft.com/government/ww/public-services/solutions/Pages/workplace-
modernization.aspx
Connected solutions for government. Microsoft solutions connect citizens, agencies, policy makers,
and government workers to information and each other to make better decisions, foster improved
services, and achieve higher levels of efficiency and accountability. To learn more, see:
www.microsoft.com/government/ww/public-services/solutions/Pages/index.aspx
The Windows Azure Marketplace. A global online market where customers and partners can share,
buy, and sell finished SaaS applications and premium datasets. To learn more, see:
www.microsoft.com/windowsazure/marketplace
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5 References
Michael Chui, Par Edin, and James Manyika. Time to Raise the CIOs Game. McKinsey Quarterly,
November 2009. (www.mckinseyquarterly.com/Time_to_raise_the_CIOs_game_2447)
Smart city. Wikipedia. (http://en.wikipedia.org/wiki/Smart_city)
Helping CIOs Understand Smart City Initiatives. Forrester Research. February 11, 2010
(www.forrester.com/rb/Research/helping_cios_understand_smart_city_initiatives/q/id/55590/t/2 )
Public Sector InformationRaw Data for New Services and Products. European Commission.
(http://ec.europa.eu/information_society/policy/psi/index_en.htm).
The Brundtland Commission. Wikipedia. (http://en.wikipedia.org/wiki/Brundtland_Commission)
Dematerialization in economics. Wikipedia. (http://en.wikipedia.org/wiki/Dematerialization)
Dochuk, Ryan. Business Intelligence and Sustainability: Getting Smarter About Sustainability.
Microsoft Corporation. (http://download.microsoft.com/download/7/B/7/7B76F413-0152-4BD9-
BB64-6BC5D32E70CB/23348_A_BI_environmental_sustainability_CDN_Business_Advertorial_FINAL.
doc)
Gartner Says Consumerization Will Be Most Significant Trend Affecting IT During Next 10 Years.
Gartner, October 20, 2005. (www.gartner.com/press_releases/asset_138285_11.html)
The consumerization of IT: Is resistance futile? Ziff Davis, May 25, 2011.
(www.zdnet.com/blog/btl/the-consumerization-of-it-is-resistance-futile/49390)