Few understand this challenge as clearly as the Infrastructure and Cities experts at Siemens AG. The multinational technology company works with cities around the world to deploy a range of products including integrated mobility solutions, building and security systems, power distribution equipment, smart grid applications and low and medium-voltage products.
In his interview, Roland Busch, CEO of Siemens’ Infrastructure and Cities Sector and a member of the company’s Managing Board, explained that most existing cities tend to be focused on four types of megaprojects: improving connectivity, upgrading energy infrastructure, enhancing safety and security, and delivering environmental projects related to emissions, waste and water. “Our experience is that cities tend to face very similar problems no matter where in the world they are. The difference is in how they choose to respond to these challenges,” noted Mr. Busch.
Making long-term choices
For most megaprojects, technology will likely be one of the most challenging and complex aspects of design and delivery. “It’s a huge investment and one that needs to last,” noted Mr. Busch. “You have to be really serious about getting the right technology that is future-proven and can offer open interfaces that can adapt to new innovations and changes in the marketplace.”
Take the development of a smart grid system. Planners will need to consider a wide range of system characteristics that will ultimately help them decide which technology to invest in: How much do you want to invest? How smart should the grid really be? What kind of bandwidth will be required to run future applications? What is the business model for the grid?
“All too often we see cities making the business case work around a technology solution rather than selecting the technology based on the business case and future requirements,” added Mr. Busch. And while in some cases the technology purchasing decision comes down to budget, Mr. Busch cautioned that budget saved today may reduce the asset’s efficiency and revenue potential in the future.
Looking for experience
With significant uncertainty weighing down the decision, many civic leaders are seeking out best practices and benchmarks from peers around the world. “One of the big questions I get when I’m meeting with city mayors and civic leaders is about where they can find best practices that might help them with their local situation,” explained Mr. Busch. “Megaproject planners tend to recognize that the technology decision is complex and – where possible – they like to understand the experience of others who have taken this path before.”
The problem, of course, is that experience in megaprojects is rather hard to come by, particularly when it comes to technology. By the time projects are delivered, technology has often moved ahead, meaning that while lessons can be learned, direct duplication is often not an option. Finding individuals or consultants that can bridge the gap between strategy and technology solutions can also be a significant challenge. “We strongly believe that megaproject leaders must look for a strategic technology partner that can not only tie the technology together with the project’s overall strategy, but one that can also offer proven experience implementing similar projects around the world,” suggested Mr. Busch.
Taking a multi-dimensional view
In most cases, the first step to selecting appropriate technology for megaprojects starts with developing a holistic view of the objectives that need to be achieved both today and in the future. “Cities are increasingly discovering that they need to break down the silos between departments to ensure that they are making the best decisions for the whole of the city,” added Mr. Busch. “In the process, many are finding that they have choices and levers that they can pull to create a better environment for the megaproject.”
Rather than simply opting for a metro project, for example, civic leaders must weigh a broad range of options that may achieve the same result through different means. Traffic management, for example, can sometimes be solved by adding new metro capacity or laying down a light rail system. However, it can also be impacted by the introduction of congestion charges, the implementation of traffic management systems or the building of new roads and highways.
“Megaproject leaders have more choice about their technology decisions than they initially believe,” noted Mr. Busch. “In the end it comes down to understanding the objectives, taking a holistic approach and relying on professionals that can deliver global best practices and hands-on experience implementing similar projects around the world. Selecting a technology just for technology’s sake is an almost certain recipe for failure.”
By Stephen Beatty, KPMG in Canada