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Empowering cities to deliver tangible outcomes

By Amr Salem, CEO and Board Member, Quantela Inc.

City and government leaders around the world continue to invest in innovation as they grapple with ongoing economic, environmental, and societal challenges in their communities. A recent Gartner report found that government spend on information technology is set to grow 6.5% annually to $557.3 billion this year alone.

Widespread frustration

Yet, typically, technology providers have focused on selling technology and the public sector has focused on buying technology. The result is universal frustration. Public sector leaders do not wake up wanting to buy new technology, they want solutions to their challenges. Hence, the real value of any investment is not in the technology itself, but how the data that comes from the digitization is used to drive better outcomes. As IoT expands, outcomes business models (OBMs) – where customers pay for the result a product/service generates rather than the product/service itself - are gaining traction as a key enabler for cities to deliver a better, safer, more sustainable tomorrow.

Return of investment

Instead of investing in a new piece of software or hardware and having to figure out how to generate value from it, OBMs enable city/government leaders to ‘purchase’ only the outcome they want to make their city more liveable. For example, if the intended outcome is operational or environmental efficiencies, cities can digitize their lighting and save up to 70% of energy costs. But how can you invest or ‘purchase’ outcomes that you cannot necessarily measure – like safer streets - the constituent issues that really impact the people in your community.

Value where it matters

The answer lies in digitizing alternative assets to fund the outcome you really want. For example, a city might not necessarily have the budget to tackle a homelessness issue, but by digitizing alternative assets within the city – like lighting, traffic, or advertising – the city can generate new revenue to fund solutions like more affordable housing, more access to mental health, more administration resources to manage benefits etc, which in turn, help to get help to the people on the streets.

It is only through true partnership between public and private sector that the right outcomes business model can be agreed to tackle the unique challenges of any city and importantly, generate better outcomes for all.