The modern business environment has resulted in numerous challenges that appear in the process of making business decisions. Therefore, managers, heads of institutions and other executives find technological solutions that can result in an increase in the number of relevant information and a more successful decision-making process. The Internet of Things (IoT) is one of the technological solutions that, based on a network of devices that communicate with each other, represent the basis for improved decision-making and the use of the obtained information with the basic purpose of achieving higher levels of development. The application of the Internet of Things (IoT) in the public sector results in decision-making that maximizes the benefit of the entire population, which also leads to the development of smart cities. The concept of smart cities is widely accepted around the world, and by using advanced technology, solutions are found on a daily basis that greatly simplify the public system. Primarily, we are talking about the administration that is becoming an e-system, communal activities that are manifested in the improvement of traffic, public lighting and waste disposal, as well as the rational use of limited resources and the creation of new energy. The concept has also taken root in Croatian cities, and 40 out of a total of 128 cities are already applying some of the possibilities offered by the Internet of Things in their operations, and they are also preparing future projects that would extend its application to a larger number of areas.