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Internet Of Things: 8 Cost-Cutting Ideas For Government

Cisco says tech's new trend darling could mean $4.6 trillion in savings and revenue to governments worldwide during the next 10 years. Examine the ideas.
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The virtual connection of data from people, processes, and things -- the Internet of Things, or as Cisco calls it, the Internet of Everything (IOE) -- promises a world of new economic opportunities. Now a new study has put a value on that opportunity and concludes that the public sector could see as much as $4.6 trillion in IOE-related savings and revenues worldwide over the next decade.

The new study from Cisco is based on an economic analysis of 40 agency-specific and cross-industry uses of IOE. It looked at various ways that interconnected systems are expected to improve employee productivity, reduce operating costs, utilize public resources more efficiently, and create new revenue streams for municipal and regional governments. It also factors in potential benefits defense organizations around the globe might achieve through enhanced connectivity, using next-generation communications systems.

The estimate is separate from $14.4 trillion in additional value Cisco predicts the private sector will derive from new efficiencies and services resulting from data linkages over the Internet.

"If you look back a decade from today at the impact of the Internet of Everything, I predict you will see it will be five to 10 times more impactful than the whole Internet has been today," said Cisco CEO John Chambers during keynote remarks at the International Consumer Electronics Show. Chambers's IOE vision extends beyond the Internet of Things -- the networked connection of physical objects -- but doesn't encompass people or processes in the data mix.

To be sure, Cisco has an agenda with this study. It is making a big business bet on this trend. Still, the examples and data are intriguing.

In its report looking at how the public sector would benefit from the combined connection of people, processes, data, and things, Cisco identified five main drivers of potential value: the ability to increase employee productivity, improve military connectivity, reduce operating costs, enhance citizen experiences, and boost revenue. Altogether, the report highlights eight major areas where the public sector could expect to see IOE benefits: online smart parking systems, systems for managing gas and water resources, home healthcare systems, variable road pricing, telework, connected learning, and military systems.

Governments also have a role in driving IOE's potential benefits to citizens, through economic development initiatives and the creation of new services. Additionally, governments need to devise policies that help allocate resources such as radio spectrum and that support open data standards, the report said.

"IOE solutions have the potential to change everything," Martin McPhee, Cisco's senior VP for consulting services, said in a statement accompanying the findings. "Public sector leaders should act now to identify major IOE opportunities in their agencies, and begin by reimagining what is possible in an IOE world."

The study suggests that the IOE offers governments the opportunity to make significant advances in delivering services to citizens by gathering and analyzing data from sensors and other means and displaying relevant results on the web or mobile devices. Governments would also benefit from the ability to quickly grasp and review data used to manage certain activities or perform certain tasks.

Of the overall $4.6 trillion, cities around the globe that harness so-called killer apps might potentially realize a total of $1.9 trillion through improved energy efficiency in buildings, utility tracking, and highway toll management, Cisco said. The greatest municipal-level savings would come from smart buildings, with additional substantial savings to be realized from gas monitoring, smart parking, water management, and road pricing.

"With more of the world's population moving into urban centers daily, cities must become more flexible and responsive to citizen needs, while making the most of public resources," Wim Elfrink, Cisco's executive VP of industry solutions and chief globalization officer, said in a statement. "[IOE] is transforming how cities deliver services and how citizens interact with government."

Defense agencies around the world, meanwhile, might achieve up to $1.5 trillion in value over the next decade by capitalizing on shared communication systems and enhanced information sharing, Cisco said. Federal civilian agencies worldwide could realize as much as $472 billion in savings and efficiencies through better disaster relief, fleet management, and cybersecurity.

More than two-thirds of the value at stake for the public sector will come through the enhanced citizen-centric communications that IOE offers, Cisco said. The majority of those benefits will be delivered by cities.

Cisco's vision of IOE is not just a dream. The company has worked closely with Barcelona, Spain, over the past few years to make IOE a reality and transform the historic Catalan metropolis into a 21st century smart city.

Barcelona has moved most of its citizen service to a virtual environment that uses video and collaborative technologies to give citizens 24/7, interactive access to city government and has implemented an IOE-based approach to water management, smart parking, waste management, and city bus service.

"Only 1% of what can be connected is connected today," Elfrink said in a video about Barcelona's smart city achievements. "Imagine the possibilities. [IOE] has arrived and can change the world."

The following pages break down how Cisco says public sector leaders might begin to cash in the potential savings and benefits of IOE.

Image: Wikimedia Commons

Wyatt Kash is editor of InformationWeek Goverment. William Welsh contributed to this story.

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WKash
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WKash,
User Rank: Author
1/27/2014 | 4:23:14 PM
Boundaries needed
One thing gravitating toward the center of the Internet of Things is our cars.  Interesting to note Ford Motor Co. CEO Alan Mulally, speaking on behalf of the automotive industry, called on Congress last week to set clearer legislative boundaries for the auto industry to protect drivers' privacy as more cars utilize data for location tracking and other services.
WKash
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50%
WKash,
User Rank: Author
1/27/2014 | 4:23:12 PM
Boundaries needed
One thing gravitating toward the center of the Internet of Things is our cars.  Interesting to note Ford Motor Co. CEO Alan Mulally, speaking on behalf of the automotive industry, called on Congress last week to set clearer legislative boundaries for the auto industry to protect drivers' privacy as more cars utilize data for location tracking and other services.
michalbonino
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michalbonino,
User Rank: Apprentice
1/22/2014 | 12:53:41 PM
Re: Add on module
Why yell. Just program the water in the shower to stop after a certain time period or else change to all COLD!
WKash
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WKash,
User Rank: Author
1/21/2014 | 8:32:24 PM
Re: Road pricing
Watching the way people skirt toll roads now, it'e easy to imagine that variable pricing strategies may not generate the revenues municipalities think.  Toll rage may become the new road rage.
Stratustician
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Stratustician,
User Rank: Ninja
1/21/2014 | 10:07:52 AM
Re: Road pricing
I agree @Laurianne, I have a feeling if these systems become connected that they will become harder to dispute as there are no actual humans to interact with, as sometimes, especially when it comes to parking, there are circumstances which might affect the legitimacy of a ticket.  If we are now subject to "to the second" parking expiration, sure the government could make a lot of money, but at what cost to the rest of us?
David F. Carr
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David F. Carr,
User Rank: Author
1/17/2014 | 10:23:32 AM
Add on module
I want a an add-on to the water meter that ties into our home intercom and yells at the kids when they're taking too long in the shower.

Just sayin'
Thomas Claburn
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Thomas Claburn,
User Rank: Author
1/16/2014 | 4:38:26 PM
Re: Road pricing
The Internet of Everything means the Surveillance of Everything. Many of our assumptions are based on imperfect, leaky systems. For example, we accept speeding tickets but we count on being caught only occassionally. Speed limits look very different when the ticket arrives in an email the instant the limit is exceeded and the car is disabled until payment is tendered. That too is the Interent of Everything. It doesn't appeal to me.
WKash
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WKash,
User Rank: Author
1/16/2014 | 4:10:10 PM
How did Cisco arrive at $4.6 Trillion?
Not surprisingly, folks are wondering... "How did Cisco calculate the $4.6 trillion of public-sector Value at Stake for the next 10 years?"

Cisco's FAQ page on the study doesn't shed a lot of light on its assumptions, or its calculations, but here's what they do say:
"Cisco calculated the IoE Value at Stake for the public sector by taking a bottom-up approach considering the value created by 40 use cases — both agency-specific and cross-agency. Top-down analysis was also performed as a cross-check to validate the completeness and order of magnitude of the more thorough bottom-up approach. Finally, care was taken not to double-count value across use cases.
 
"IoE Value at Stake is based on net value: for each use case, we considered both the connections benefits
and costs. Our use cases reflect the projected result of the application of technology — in this case, public-sector transformation driven by the Internet of Everything. Cisco's Value at Stake calculation encompasses both agency-specific and cross-agency use cases."
 
Here are more details from its FAQ page:
http://internetofeverything.cisco.com/sites/default/files/docs/en/ioe_value_at_stake_public_sector%20_analysis_faq_121913final.pdf
 
Brian.Dean
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Brian.Dean,
User Rank: Ninja
1/16/2014 | 3:46:39 PM
Re: No way
I take that the figure of $4.6 trillion is only looking at the direct savings and only towards things that have already been implemented or implementable in the near future however, the indirect saving would be far beyond this estimate and if we take into account devices that have not yet been imagined than there is no telling just how much these connected things will save in the long run in the IoT.

It is good that connected learning is estimated to save at least $258 billion. I just hope that connected learning also provides the ability to learn in a much more efficient manner in terms of time spent to complete a semester.  
sam masud
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sam masud,
User Rank: Strategist
1/16/2014 | 2:07:33 PM
No way
How can Cisco--or anyone--put out any numbers with confidence regarding the IoE market or much would be saved with IoE?
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