Osaka City and Hitachi to Demonstrate Efficiency Improvement of Municipal Operations and Enhancement of Resident Services through AI Agents

Osaka City and Hitachi, Ltd. (hereinafter referred to as Hitachi) have recently conducted a demonstration using AI agents targeting general administrative tasks within city hall to improve the efficiency of municipal operations and enhance resident services. As a result, in the demonstration environment, the possibility of reducing application and review times for commuting allowance applications by up to approximately 40% was confirmed. The city plans to begin considering the city-wide introduction of AI agents from fiscal year 2026 onwards to further improve resident services.

Specifically, AI agents, tentatively developed by Hitachi, were applied in a demonstration environment to the processing of approximately 10,000 commuting allowance applications*1 annually by the General Affairs Bureau of Osaka City. The effectiveness was verified for the following four use cases:

Use Cases Verified in This Demonstration (1) Navigating applicants through the application process and input details in a conversational format (2) Supporting reviewers in checking application details (3) Supporting reviewers in determining approval or rejection (4) Supporting reviewers in refund calculations

As a result, compared to normal operations, a reduction in work time of up to approximately 40% was observed. Although there are still many challenges to address before full-scale implementation, the potential for significant improvements in employee work efficiency in the future has been confirmed.

Moving forward, Osaka City plans to leverage the knowledge gained from this demonstration to conduct further demonstrations on the application of AI agents to the review process for applications received through the administrative online system. Furthermore, with the aim of further enhancing resident services, the city is looking towards the city-wide introduction of AI agents from fiscal year 2026 onwards and is proceeding with efforts such as identifying challenges for implementation in the production environment and establishing operational rules and systems. Based on the results of this demonstration, Hitachi will support the introduction of AI agents to Osaka City and other municipalities facing similar challenges, contributing to further improvements in resident services by realizing operational efficiency.

*1 Documents in which employees declare their commuting routes and means of transportation to their workplace, as well as information on whether they have a commuter pass and its cost.

Background With the recent decline in the working-age population, labor shortages have become an urgent issue for local governments, necessitating reforms in municipal operations to achieve greater efficiency and labor savings. In addition, with the rapid advancement of AI, including generative AI, "AI agents" that can complete tasks on behalf of humans are gaining attention, and expectations are high for their introduction into municipal operations, which often involve many standardized administrative procedures.

Osaka City is advancing cutting-edge digitalization initiatives, including the establishment of a city-wide generative AI environment, under the Osaka City DX Strategy Action Plan*2. In light of these circumstances, Osaka City and Hitachi have been exploring the use of AI agents with the aim of creating an environment where employees can focus on initiatives to improve resident services through further efficiency and future automation of internal city operations.

This time, Osaka City's accumulated knowledge from past AI utilization was combined with Hitachi's expertise cultivated through building municipal systems and its skills in applying AI agents in various fields. Together, they explored use cases aligned with the concept of "Re-Design of Work"*3. With a future plan to expand the scope of application while confirming and accumulating results through a small-scale start, they demonstrated the potential for application to tasks such as receiving commuting allowance applications submitted by employees and scrutinizing and approving application details.