Top Banner

PwC Middle East, digital transformation is about creating new technology-enabled business models

PwC is one of the leading professional services networks in the world, helping to build trust and solve some of the region's most important problems. The firm works with governments and enterprises in the Middle East to completely transform their business models and embrace digital transformation.

Smart Cities World Forums magazine managed to secure an exclusive interview with Mr. Hazem Galal, PwC partner and global leader for Cities and Local Government.

In a fascinating, informative and engaging interview the charismatic smart city expert declared that whilst digital transformation is about taking existing processes and models and making them more efficient. For him, digital transformation was more about transforming and creating completely new business models.

In addition to this, Galal outlined his definition of a smart city, the role digital platforms play in enabling cost-effective and efficient smart cities, and how creating resilient cities was a key component in order to protect smart cities from the increased threat of cyberattacks.

You've previously said that technology is a really important enabler in a smart city, but that technology doesn't define it. So what is your definition of a smart city?
There is no universal definition of a smart city. However, a smart city is an interconnected community where people are able to work, live and play in ways that were not possible in the past without the enablement of technology. Having said that, technology is only an enabler. For a smart city to thrive, we need the right ecosystem in place. Take smart financing for instance. If we do not have the right governance mechanisms that would enable us to work across the different layers and departments within that government, the potential for smart financing would not be realized. Similarly, if you don't have the community's involvement to update the technology and smart services, you can't really have a smart community or a smart city.

In your expert opinion, what is the role of digital platforms in enabling cost-effective and efficient smart cities?
Digital technology and digital transformation are allowing organizations to conduct their business in ways before unimaginable. We've seen the sharing economy and that has only been enabled by digital transformation. Now we've had sharing economy models before in the mobility vertical and we all know about CAREEM and Uber, for example. However, the question becomes what is the next sharing economy in buildings, office spaces or residential spaces beyond the typical models of BMB. What does it mean in terms of maximizing the utilization of some of the assets in the infrastructure that we have invested so much money in?

When I think about digital transformation, it is not only about taking existing processes and existing models and making them more efficient. Yes, there is room for that. But I think about it more in terms of transforming and coming up with completely new business models.

We talk about software as a service, but what does infrastructure as a service look like? What does that mean for a city that can't afford to manage its own water system or energy system? Can this be outsourced and managed remotely, outside of the city boundaries, in a command and control center sitting somewhere else in the world? If it can, then this is a real example of digital transformation.

The 4th Industrial Revolution promises huge opportunities for driving cities' sustainable development. However, what do cities need to do to implement a balanced strategy that gives consideration to social, economic and environmental factors?
These again are state-of-the-art technologies that are emerging, and when we think about the impact of any one of these technologies and the potential benefits, we have to do a complete assessment that looks at the triple bottom line, which is of course environmental, economic and social.

When we talk about introducing and leveraging AI, for example, we look at the medical field, which is one of the most established fields. Now obviously there is an important part in leveraging these algorithms and giving an expert opinion, but would patients be willing to actually interact only through a natural language interface with a machine? In my opinion, there is always going to be a need for a human doctor or a human element. So while it's very efficient from an ability to analyze and make informed decisions, could it become an intelligent assistant for a human doctor to allow it to make better informed decisions?

These are the kind of trade-offs that we're going to have to make. In addition to this, we then have to ask, what does the future of work look like? How can we shift the human intelligence into areas that add value to, and leverage machine learning, AI and predictive analytics so that we're able to bring a wealth of knowledge into the human decision making process?

Do you think the smart city market will continue to evolve in MEA, and if so, can you identify to us where the greatest potential for growth is?
When we think about the smart cities market it's not as it used to be ten years ago, when it was all about smart mobility and erecting security cameras to promote smart safety. We're starting to take it beyond that.

What does a housing program look like leveraging 3D printing? What does a housing program look like leveraging recyclable building materials and modular ways of designing and delivering buildings? These are all the things that we're starting to see right now. What does the circular economy look like in terms of full recycling of wastewater, and making sure that this integrates with the value chain of agricultural businesses? These are the types of circular economy and shared economy models that are going beyond the initial or first generation of smart cities.

Internet of things and AI have been the predominant strategic technology trends that have driven digital transformation in 2017. Do you see new tech trends such as Blockchain playing a bigger role in digital transformation in 2018?
AI is not a new technology. Thirty years ago when I graduated with a degree in computer engineering and computer science, AI was there and expert systems existed. What is new is the processing power that we have right now, and again the ability to take AI from the lab environment to real-life use cases and applications that are able to redefine healthcare and redefine other industries like retail and tourism.

However, the challenge in all of these emerging technologies is how do you hedge your bets, and how do you make sure you're able to combine them in a seamless way? What does AI look like for a building permits process coupled with Blockchain so that you can do the authentication and which enables you to derive some intelligent decisions about the use of land in a given city and how to best optimize the land? Traditionally, the use of land was determined by urban planners, which was fine. But what does the urban planner of the future assisted by AI look like in terms of really optimizing the use of a piece of land?

What do organizations in the GCC region need to do in order to combat better against cyber attacks?
One of the side effects of technological advancements are of course the vulnerabilities that these may bring with them. Resilience is of course a very important feature of a truly smart city. Resilience means the ability to defend both manmade disasters like cyber attacks as well as natural disasters.

Increasingly, with the proliferation of cyber attacks and natural disasters, we see cities realizing the importance of resilience and the vulnerability that comes from the use of technology. It has never been more important to create the defenses and mechanisms, and to even have business continuity plans that can depend on manual processes if things go wrong. .

For a smart grid, the question is how do you invest in micro grids as an insurance policy to back-up your critical infrastructure? For cybersecurity, how do you take it to the next level and not be subject to all these cyberattacks that are happening as we speak on nuclear installments and command and control centers in cities? It is indeed a prerequisite; to build a resilient city to make sure you have all of these policies and technologies in place.

Dubai aims to make 25% of all transportation trips in the city ‘smart' and ‘driverless' by 2030. It has embraced autonomous driving technology. How much of a key component is mobility in any integrated smart city vision and plan?
Mobility of people and goods is a key building pillar in any smart city. However, when we talk about autonomy, we can't talk about private autonomous vehicles because we're not solving the problem. We need to talk about autonomous public transportation vehicles. We need to talk about autonomous ways of delivering goods so that we're getting gradually away from the car-centered model which is not a very sustainable model for us to build our cities around.

We're talking about autonomous shared vehicles and we're talking about reducing the number of trips you have to make as part of a redesign of the city to have compact neighborhoods so that people are working and playing and living within a smaller radius. You're basically trying to eliminate the need for trips, so it's not just about deploying autonomous vehicles on the roads as a solution.

Can you outline to us what PwC's primary objectives and goals are for 2018?
I'll take that on three different layers. Globally, we will continue to be a trusted advisor for a lot of the innovative cities that are transforming themselves using technology. We recently just finished the smart city roadmap for Hong Kong that is now publicly available. Hong Kong partnered side by side with PwC on a really ambitious roadmap which hopefully will become the blueprint for other cities in Asia and China. At the regional level, we're seeing a level of maturity as a lot of the decision-makers and city managers are taking smart cities to the next level, beyond talking about it and experimenting with pilots, to actually doing large-scale smart city implementations. We are definitely seeing this in the UAE and we're seeing this now in Saudi Arabia and in North Africa with Tunisia and Morocco. We're also seeing the rest of the GCC countries embrace this, maybe not at the same rate as the UAE, but it's overall very positive and encouraging. Then at the local level here within the UAE and Dubai, we'd like to continue our collaborations with the key players here like the Smart Dubai Office, and also the national level entities that are looking at smart technologies like the TRA.