For each of our markets we have considered the business imperatives, business trends, and the impact that emerging technologies and solutions may have in addressing these.
Imperatives
GENERATING MORE REVENUE
The recession has changed the shape of passenger transportation, as it has with many other markets. On one hand, businesses and consumers are economising and spending less on luxury travel; on the other, the recession has driven some consumers to ditch their cars in favour of public transport, which is not responding accordingly either in quality of service or in terms of costs (in Spain, the highest increases in regulated services have come from transport tickets). Governments must reduce the personal cost (time / money) of moving to boost economy.
Massive growth has been seen in some areas where there has been investment — for example Virgin West Coast trains in the Uk has recently announced 26% growth after increasing frequency of service, making the journey faster and more reliable, and making more competitive advance fares available. Much of this will have been at the expense of air travel.
However, large investments are required in passenger transportation, and these take a long time to see returns. This current climate is not so conducive to this business model. There is limited cash to invest (vehicles, ticketing, security, technology) and innovate.
Loyalty and cross-selling are clear opportunities for increasing revenue. However, the increase in self-service is reducing the amount of direct contact with the customer at a time when organisations are trying to increase loyalty. knowing the customer enables organisations to better capitalise on retail opportunities both during travel and when transferring between journey stages, while at the same time enhancing the customer experience. It also enables organisations to offer different travel experiences to suit different needs and pockets — for example, a more expensive ticket could enable faster flow through an airport / port / station. New services on top of normal incomes could play a key role (publicity from merchants, services for customers like WiFi connectivity).
CAPACITY PLANNING
Providers of all types of transport systems in, for instance, the Uk are under immense pressure to increase capacity. With expansion being a lengthy and expensive process, providers are seeking to make the most of their existing infrastructure and IT may well provide the answer. In air travel, we are seeing an increased focus on yield, revenue management, and also on load factor, which is an indication of capacity utilisation. Additionally, optimisation between passengers and cargo is important.
Expansion or not, the number of people using public transport is changing — in some areas it is rising, in others, such as air travel, it is falling. Managing the ever-changing number of people travel and assets required to transport them is being ever more complex and IT will play its part in managing that increasing complexity.
SECURITY
Expect to see the biggest security innovations in buildings such as ports and terminals, rather than on the transport itself. For the time being, enhancements are tending to be manpower-related rather than technology- related. Expect to see airports as the industry leaders, with changes being more profound when the security risk changes.
Some of the recent technological advances include biometric-enabled doors.
Business trends
REAL TIME
The passenger has become hungry for real-time information to be available, enabled by mobile technology. It seems there is an endless appetite for mobility, but this type of information is not forthcoming — primarily because the business case is not understood.
Trains are continuing to see a burgeoning of uses for real-time technology, such as catering terminals providing stock information and other real- time information. The biggest driver for real time is the challenge of ticket authentication. With new modes of ticket delivery (such as printing at home), staff on the train must be able to reliably authenticate tickets and prevent the reuse of single-use tickets or e-tickets.
SUSTAINABILITY
Despite predictions that the credit crunch would kill sustainability, it is still very much on the agenda, but focused on how it can help with saving money and increasing capacity and efficiency. The reduction in the consumption of fossil fuels is a strategic target for the EU, for economic and environmental reasons. The EU is going to define a catalogue of ‘good practices’ for mobility. These undoubtedly will include boosting the use of collective transport for individuals and the optimisation of systems for management and exploitation.
From a brand perspective, the amount of energy that is being put into promoting brands as Green varies greatly from country to country — for example, the French passenger would seem to be more interested than a British or Spanish passenger in whether or not a brand has a sustainability agenda.
THE RIGHT SKILLS
The industry is seeing a fall in the level of skilled engineers and new graduates. The image of transport as lacking glamour may be to blame for this, or perhaps the complexities that come with the not-quite-public, not-quite-private nature of many transport organisations. The comparatively high remunerations for contractors may also play a part in the decision of many who leave organisations, plus the transferable skills from this industry are in demand in others. Add to this loss of skills through the retirement of skilled engineers, this further demand a focus on the renewal of teams.
The ambition of governments to invest heavily in transport infrastructure demands that the right expertise is available throughout the investment lifecycle. In the Uk there are skills gaps in heavy engineering making both design and build difficult. Also, with intelligence becoming an increasingly important tool it the train operator’s kitbag, developing analytical skills amongst staff is vital and we can expect to see retraining for some in
this area.
Finally, economic pressures are leading companies to offshore low-value work, particularly airlines. This is leading administrative staff to fear for their jobs, only to be exasperated by the automation of some tasks such as ticketing. Transport-related strikes can be found across Europe.
EFFECTS OF TICKET EVOLUTIONS
Migrating tickets from paper to new fulfilment media brings costs savings through shifting the cost of sale onto the consumer, but presents new challenges in the shape of authentication, validation, and transaction. Each new option brings a new need and challenge: more automatic ticket machines require more space in already overcrowded stations; self-printing of tickets or e-tickets may remove the issue of space in ticket halls but are harder to validate than paper-based methods, and smartcards can be prone to hacks or to bad code and read errors.
The real challenge for transport operators of all types is not so much investing in the right fulfilment media, as ensuring the reliable validation of the tickets. Not all operators are moving at the same pace, so interoperability between different operators is an issue, as is the cost of upgrading to new technologies. 2D barcodes are becoming popular, but not all gates can cope with this, mobile tickets, or smart tickets. Until this is entirely dealt with, it is unlikely we will see a mass shift to newer methods.
THE BUSINESS OF PASSENGER TRANSPORT
The use of Near Field Communications (NFC) for the payment of multimodal transport services will be a key area in the success of new media and is expected to be seen initially in urban and metropolitan areas, which represent more than 75% of the total transport system.
Charging the travel cards will generate flows of liquidity for financial institutions. This will reach a point where the public administration responsible for transport will generate tenders for managing these flows and the recharging of the cards.
THE REMOTE WORKFORCE
In the Uk, call centres are being relocated to remote locations, particularly India. India is able to offer true remote support, 24/7, with the capability to expand and contract at short notice — for example when the weather is causing severe travel disruption.
FURTHER COST OPTIMISATION
Costs are being lowered through the formation of partnerships and alliances, and through outsourcing. Transport companies are continuing to be impacted by external influences that are increasing their internal cost while their revenues stay behind. This trend is set to continue. They must find new ways of doing and structuring their business. Extensive cost reduction programmes include process redesign, smart IT, and new organisation structures.
RESOURCE OPTIMISATION
Automated optimisation systems are becoming more and more important in the quest for higher capacity. With cuts in the size of the workforce, as much as 20% in some areas, optimising the available manpower becomes ever more crucial. Further, the workforce itself is improving its own productivity through better rostering.
OPENING UP OF COMPETITION ACROSS EUROPE
As the rail transport market is gradually opening up in continental Europe, former state monopolies need to reorganise their activities, separating infrastructure from transport operations while abiding to the new rules of competition. Most operators also consider this opening as an opportunity to develop internationally, entering new markets with selected partners.
Impact technologies
Business Intelligence (BI) and smart analytics could allow significant improvements in passenger optimisation, while Global Positioning Systems (GPS) technology could allow such precise tracking of vehicles to allow increased train frequency and more stable bus frequencies.
Vast assets from signals and track to buses and trains can be better managed with new Next Generation Enterprise Asset Management (Next Gen EAM) technologies including remote sensors, GPS, and radio- frequency identification (RFID). These will ensure the state of an asset is available in real-time, along with its location. For workers in remote and difficult environments, this is key to ensuring their safety.
RFID readers will have remote reading of up to one metre and will require new standards and new devices – cards and mobile devices. This will be key to the traceability of passengers (origin-destination), allowing for optimisation of routes and enabling improvements in mobility policy definitions (urban and metropolitan routes).
Remote workers and customers will benefit greatly from the new mobile applications, giving them vital remote access to information from anywhere and on any mobile device. These can also streamline ticketing and enhance the traveller’s experience throughout their journey.
Self-service ticketing will also make use of technologies such as NFC for smartcard and mobile payments (mPayments), giving the opportunity for enhancing customer loyalty through Customer Relationship Management (CRM) applications. This technology can also be used for ticket-checking, to make travel quicker and slicker for the passenger. NFC is marked as an opportunity to enable self-service customs for passenger flows at airports.
In today’s environmentally conscious climate, replacing paper tickets with mobile ticketing will both reduce paper usage and alleviate the need to dispose of tickets with non-biodegradable inks or magnetic strips.
The ability to take an educated view on future requirements is vital in a number of areas, including enabling operators to manage capacity, directing customers to spare capacity to ensure that people are on seats, whilst ensuring services are available for customers to travel where they want, when they want. BI is of great value here.
As our climate changes, asset maintenance schedules will need to be remodelled to take into account new extremes. Climate Change Modelling will be key in giving organisations the necessary foresight to prepare for change.
Anti-terror and anti-sabotage initiatives will require Identity and Access Management (IAM), which can be achieved through role management and information risk dashboards. Biometrics will play a key part in this. Security will also be enhanced through new technologies such as body scanners, where there is a fine balance between the need for security and an individual’s right to privacy.
Wireless networks such as 3G (and later 4G) and WiFi will operate in parallel to bring data to remote workers. Technology selection at any location is likely to be based first on availability and value. These wireless networks will also provide personalised services for passengers, initially on planes and trains, and later on buses.
In-vehicle technology along with wireless connectivity will enable the status and location of vehicles to be monitored remotely. It will also enable real-time information to be made available within the vehicles.
Integrating Geographic Information Systems (GIS) with other tools such as BI or Enterprise Content Management (ECM) will enable users to quickly find location-based knowledge, content, or intelligence.
Remote workers will use wearable computing devices to enable them to access information without the device impeding their work.
Social media software will play its part in delivering information about services to users focused specifically to their needs. For example, social networks could present an individual with real-time information relating to their normal travel patterns or enable passengers on the same journey to find each other. Other Web 2.0 technologies, such as wikis and blogs, could be used to make information available to all employees, which is particularly important when the workforce is becoming more virtual.
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