Digital Transformation of Public Transit: A Challenge to the Management Culture
Changes made possible by information technologies create challenges for public and private transport organizations such as bus, subway or train operators, taxi companies and private driver networks. With typically less than 5% of their budget allocated to IT-centric initiatives and an obsession for infrastructure and equipment, it is no wonder that these companies perceive these changes more as challenges than as opportunities
Challenges and opportunities
Organizations that are well prepared to make the shift to digital turn these challenges into opportunities. Not only to improve their business results but also for the happiness of their workers and for a positive impact on society.
Let's explore the major digital changes in public transit.
Integrated mobility | Users want to go from point A to point B, regardless of the mode of transport or the operator. A user could for example take a subway from a first company, followed by a bus from a second company, followed by a taxi and even a car sharing.
Multi-channel passenger information in real time | Users want to receive harmonized information regardless of the device used, be it a tablet, a smartphone or a computer. This information should reflect the situation in real time, for example the location of vehicles and the conditions of the networks.
Dematerialization of payments and ticketing | Payments by card and cash, as well as tickets in cards and paper slips are gradually dematerialized, notably thanks to the NFC function of smart phones.
Monitoring of vehicles and equipment | The organization can monitor its equipment continuously, whether it is vehicles or fixed equipment. This makes it possible to anticipate and react more quickly to incidents, notably thanks to Internet of Things technology (IoT).
Smart advertising | Smart advertising is tailored and interactive, so users are happy to receive it.
Smart city | With the advent of the smart city, the transport organization works with municipalities and cities for better integrated mobility.
Through these six major opportunities, we discover a paradigm shift in the development of passenger transport companies. Instead of focusing on large infrastructure projects as usual, the biggest gains are now being made by using the existing infrastructure more intelligently thanks to digital transformation opportunities.
"Instead of focusing on large infrastructure projects, the biggest gains are now made thanks to digital transformation opportunities".
Changing management and leadership behaviors
The main challenge to take advantage of the digital transformation is not only technological, but also and above all cultural. The organization must develop management and leadership capabilities that enable it to anticipate and react more quickly to change and to progressively adapt its structure and ways of working.
Deciding quickly despite uncertainty
Testing a product quickly on the market
Accelerating project ROI
Facilitating relevant innovation
Simplifying the ways of working
Among the 6 capabilities above, the emphasis is on the speed of decision-making and on ability to innovate, that is, to test and develop new products and services for which the organization does not have experience. There is also a focus both external and internal. External on the customer experience, and internal on the autonomy of teams and the simplification of ways of working.
The behavior of managers and decision-makers is the main lever for developing these capabilities within the organization.
"Changing the behavior of managers and decision-makers is the main lever for agility".
These behavioral changes occur in different processes, functions and teams of the organization. For example, in investment committees, the management of portfolio initiatives and projects, resource planning, and perhaps most importantly in the transversal collaboration between different functions of the organization towards a common objective.
Key success factors for the Digital Transformation
Since public transport companies are usually rigidly structured into functional silos and hierarchical levels, and rely on formal governance, at first sight the work to be done to develop these capabilities may seem daunting. Fortunately, it is possible to make this transition gradually and generate benefits quickly. There are three key success factors for such a transformation.
Step-by-step, structured and context-specific approach
Transformation consultants co-develop the program with managers and decision makers to ensure that it addresses the real business issues of the organization. Similarly, transformation’s progress indicators are resolutely tied to business objectives. The program is spread over several phases, each of which generates profits, and combines advisory, training and above all in-action coaching.
Immediately apply to real issues
In order to ensure rapid results and stakeholder engagement, the program puts decision-makers, managers and teams immediately on real issues. Often, the best vector of transformation consists in major transversal projects linked to digital transformation opportunities, for example:
Opening the data to other operators and stakeholders in mobility
Virtual transit tickets on mobile phone
Continuous diagnosis of critical equipment status
Tools to facilitate the work of employees such as digital bus roadmap, alerts, accompanying passengers in stations and vehicles, etc.
Experience shows that in order to develop such organizational capabilities, it is necessary to change behaviors across hierarchical levels, functions and processes of the organization, typically encompassing lines of business, information technology and operations. The holistic approach ensures a profound and lasting impact, in other words a cultural change.
The development of these management and leadership behaviors integrates what is called Agility into the DNA of the organization - the ability to anticipate and respond better and faster to changes. As the pace of changes accelerates and the impact of changes amplifies on the road ahead, Agility becomes the key driver to succeed the digital transformation and to adapt continuously.
ABOUT THE AUTHOR:
Bruno Collet helps organizations benefit from agility, mainly in the area of digital transformation. He develops the Metamorphose framework to accelerate transformation results. His career has led him to collaborate with organizations in Montreal, Belgium and elsewhere, including the Société de Transport de Montréal (STM), National Bank of Canada, Loto-Québec and Proximus (formerly Belgacom). Holder of MBA, MScIT, PMP and PMI-ACP degrees, Bruno Collet is also author of a blog on agile transformation, and speaker at PMI, Agile Tour Montréal and Agile China.