Working in the global financial capitals of New York and London over the past decade has given me a front-row seat to some major events that have changed the world for all of us. The collapse of the dot.com bubble, growing urbanization and globalization, concerns about climate change, the precipitous collapse of the global economy, and the rising ubiquity of computers embedded in everything -- these have all altered both perception and reality regarding economic, social, and political risks and opportunities.
But of all these events, the last one -- the emergence of a "smarter" planet -- provides the greatest opportunity to address the challenges of the "new normal" in which we find ourselves.
One of the major changes of the new normal is how public and private institutions define return on investment (ROI). In the past, when deciding where to invest money and other resources, ROI was defined in fairly narrow, financial terms.
Today, institutions must calculate ROI across various dimensions, depending on what their constituents -- clients, citizens, employees, investors, etc. -- are concerned about. This risk-reward equation creates tension between various economic and societal factors. Focus on cost, and environmental impact might increase and reputation might suffer. Focus on client value, and it may impact efficiency. Emphasize systemic impact, and client value may suffer. Focus on societal benefit, and cost may increase.
But now the complex, globalized, interconnected world we live in requires that we find balance between those factors while still delivering the same, or better, quality of products and services. It also provides the means to do so.
The key to creating this balance is the unprecedented ability to collect information in larger quantities than ever before. The ability to collect, process and share data is now abundant and cheap, embedded in just about everything: cars, appliances, cell phones, roads and rails, power grids, manufacturing systems, even clothing -- all of it interconnected.
Most importantly, we now have the processing power and analytics capabilities to sift through all that data. This allows us to extract meaning from it in ways we never imagined before, in real time, and predict or even predetermine future outcomes. From these insights, we can find new ways to reduce cost, lower waste, improve efficiency, increase productivity, enhance service to clients and other key constituents, and raise the quality of everything -- from products to companies and public institutions, to the environment, to economic systems, to the cities we live in.
One example of how a public safety organization in a major metropolitan city has redefined ROI comes from the New York City Police Department (NYPD).
The goals of the NYPD's Real Time Crime Center (RTCC) are near and dear to the hearts of every citizen of Gotham: prevent crimes before they occur, solve them faster when they do, and get criminals off the street quicker. The NYPD had plenty of information but needed a system that could comb through it quickly enough to spot patterns and problems.
NYPD's RTCC allows officials to analyze millions of local, state and national files, ranging from criminal records, parole files and 911 call records. Satellite imaging and sophisticated mapping provide a precinct-by-precinct view of the city. And analysis capabilities can track suspects to all of their known addresses and point detectives to the locations where they are most likely to flee.
In one case, an officer was able to retrieve a suspect's photograph via a handheld device following a narcotics bust and tie the suspect to a murder in Virginia. In another case, police were able to trace a cell phone number used in a previous 911 call back to a suspect in a series of thefts committed against elderly citizens; using the information they were able to confirm the suspect's identity and apprehend him.
Lower crime rates in New York City show the potential of an interconnected, instrumented, intelligent world being delivered in terms of real, tangible, multifaceted ROI. Those who embrace this vision first stand to gain the most.
How can you define ROI in your interconnected world?