Travel plans

The biggest issues for public transport companies over the next three to five years will be to provide customers with value-for-money services, increase safety and address environmental concerns.

Value for money involves providing passengers with the right information at the right time so they can make informed decisions about their travel arrangements, while also making pricing structures more simple.

Concentration on safety requires improving the management of infrastructure, such as signals and traffic lights, and boosting surveillance measures by deploying technology, including CCTV cameras to read vehicle number plates in specific danger spots.

The green agenda, meanwhile, is focused on encouraging customers to leave their cars at home and make more use of trains and buses to reduce their carbon footprint. At the same time, toll and congestion charging systems are tackling demand management on roads.

The Department for Transport set up a Transport Innovation Fund in 2004, with the aim of making a £200m yearly pot available to local councils for anti-congestion projects. So far, nine authorities have agreed to introduce pilots by 2009.

Simon MacWhirter, transport account director at consultant Capgemini, says after a long time, people are starting to understand that if they want good quality services, they have to pay for them.

‘Another key consideration is safety, which is a very emotive subject in transport,’ he says. ‘New technologies such as CCTV, GPS and Bluetooth are starting to change agendas, however, and allow organisations to do things that weren’t possible in the past.’

And it is in the area of more specialised IT systems that the bulk of transport expenditure appears to be going.

According to Philippe Martin, senior analyst at public sector research company Kable, the public transportation sector was worth about £878m in fiscal year 2006/07, but will grow at an annual compound rate of about 10 per cent to £1.17bn by 2009/10.

Martin says transport is the one area that is growing compared with other government sectors, even though it is a small market. While spend on IT in other areas will increase yearly by about four per cent, investment in transport market systems will jump by 16 per cent by 2010.

‘Transport believes in IT, but the growth isn’t coming from traditional back-end systems – it is in technical specialisms such as traffic and asset management,’ says Martin.

A key challenge in enhancing traffic management is that the UK’s transport infrastructure has suffered from under-investment, and capacity is unlikely to increase much in the future.

The country is too small to continue building new roads and airport runways indefinitely, and it is expensive to lay new railway track when margins are tight.

Jamie Houghton, an executive at IBM Global Services, says it is a general theme that supply of transport infrastructure can’t keep up with demand. ‘IT will play a more significant role in the overall management of transportation because demand will have to be handled more effectively,’ he says.

Houghton says there are two key ways to improve capacity planning. The first is to make pricing more simple through the use of electronic tickets, such as smartcards on public services and GPS to collect congestion charges. The second is electronic technologies that provide passengers with incentives to travel outside of peak hours or travel discounts.

But Mark Elliott, a senior executive at Accenture’s products operating group, says there are other reasons for the shift to e-ticketing.

‘There’s a desire to shift away from magnetic stripe tickets to smartcards and mobile phones, not least because of the cost of maintaining them,’ he says. ‘With electronic tickets, you can track each transaction, improve security and open them up to a broader range of services.’

Such services include price-capping, providing access to third-party facilities such as tourist attractions, and the addition of e-wallet capabilities. In the latter instance, for example, Barclays Bank – in conjunction with Transport for London – plans to introduce a credit card that passengers in three London Boroughs can also use as an Oyster travel card.

It will coincide with the launch of an ‘under £10 scheme’ that will enable travellers to purchase items such as coffee and a newspaper by touching their card onto a till without needing to enter their PIN number.

Another aim is to enable smartcards to operate across multiple modes of transport rather than just one, which is currently the case with Oyster and the London Underground system.

Various UK passenger transport authorities set up the Integrated Transport Smartcard Organisation (ITSO) in 1998 to develop and implement standards for interoperable smartcard ticketing. While standards are still immature, they are starting to be supported in new equipment – and bidders for the new 10-year South Western rail franchise, for example, were informed in April that they had to introduce ITSO-compliant ticketing systems from January 2009.

The second means of managing demand is to provide passengers with better information in real-time on their mobile devices or online, so they can plan their journeys more effectively.

Real-time information involves implementing technology such as vehicle tracking systems, telematics and CCTV cameras to monitor traffic flows.

Capgemini’s MacWhirter says it is about providing customers with information of any delays or cancellations. ‘If people are given information from different transport sub-sectors, which says that if they wait another hour to take this train or that bus, they’ll be able to hit this flight, it will allow people to travel more flexibly,’ he says.

To be able to provide such real-time information, however, a lot of back-end integration work will be required, both in terms of hooking up traditionally siloed systems and enabling applications in third-party organisations to communicate.

But integration work is likely to prove quite a challenge as the IT infrastructure of many transport organisations is ‘pretty old’, according to IBM’s Houghton.

‘Much of the existing IT is legacy and different systems don’t talk to each other, which means that adding support for open standards and middleware, for example, will become important,’ he says.

Financing the move towards real-time information will require a focus on cost-cutting, especially in the area of back-end IT systems. Kable’s Martin expects transport organisations, and particularly government agencies, to follow the lead of the Driver and Vehicle Licensing Agency and start exploring the benefits of shared service centres to handle administrative functions such as HR, payroll, procurement and customer service.

‘Outsourcing will be a continuing trend to cut back office costs,’ he says. ‘It comes down to an efficiency agenda and IT has a real part to play here.’

Back-end costs will also be controlled in a move from bespoke systems to vertical market packages. MacWhirter says transport is an asset-intensive industry, with high costs and low margins in every sub-sector.

‘As a result, organisations have two options – to put up passenger prices, which is tricky, or to reduce costs,’ he says. ‘This means that controlling back-end costs is becoming a key priority to finance improved services and maintain and manage assets.’

What the experts say about IT in transport

Two things will be important over the next five to 10 years. The first is to simplify travel so that people have access to improved passenger information and don’t have to understand which ticket they need at which point. The second is mobility, both for customers and operators. Putting mobile GPRS and 3G in the hands of staff is important so they can see the latest information immediately.
Dave Lynch, group technical director, Go Ahead Group

The future of IT in transport comes down to enabling the public to enjoy safe, fast and reliable journeys. Highway management is evolving and there’s now a much greater focus on improving outcomes for the travelling public, rather than just managing the condition of the asset. But the result is that there is a higher need for network intelligence to understand what’s happening and to manage things more smartly.
Gareth Griffiths, senior IT business partner for highways, MP

There is a growing focus on better control of information with regard to asset management. While many firms have had ERP systems in place for some time to manage back-office finance and procurement, there’s now a focus on linking this to front office CRM systems. Providing maintenance engineers in the field with mobile devices for an integrated flow of information is also a priority.
Simon MacWhirter, transport account director, Capgemini

The foundations for a web-enabled management of transport operations is being put in place. Over the next two to three years we will move from passengers being able to access information online to being provided with it in real-time on their PDAs or in their car.
Philippe Martin, senior analyst, Kable

The transport authorities are looking at how to get accurate customer data to understand how crowded different parts of the infrastructure are at different times of the day. But most transport authorities are split by transport mode and so the concept of a single view of the customer is quite rare. This means that the focus needs to be on thinking outside of customer silos.
Jamie Houghton, executive, IBM Global Services

There is a real need for integration, but that starts at the policy level, flows down to business operations and processes, and then finally on to IT, and it’s still very early days.
Mark Elliott, senior executive, Accenture’s products operating group