The research project presented in this paper is being conducted in collaboration with Dublin City Council and Intel Corporation, and is focused on the development of a Smart City maturity model. This paper focuses on the research methodology that is being used for this study, i.e. Action Design Research (Sein et al. 2011). Particularly, we will describe why this recently proposed methodology is suitable for our research, in comparison with Design Science Research (March and Smith, 1995; Hevner et al. 2004) and Action Research (Baburoglu and Ravn, 1992). Furthermore, we will focus on the problem formulation stage to systematically investigate the topic. A systematic literature review based on the 8-steps method proposed in (Okoli et al. 2010) is presented to explore the factors required to evaluate the environmental and socioeconomic sustainability impact of Information and Communication Technology (ICT) solutions at a city level. Furthermore, Grounded Theory principles were adopted to structure the Smart City ecosystem, and identify the areas in which ICT-enabled services have an impact on the city’s social, environmental, and economical performances.