Fare Management for High Performance— a strategic approach to ...

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Figure 1: Taking a holistic approach Building a strategic road map Designing a strategic road map is a fundamental first step—but one that too many organizations ignore, usually in the interests of trying to accelerate the process. 4 Key Tasks Key Deliverables Understand business context Define value levers • Conduct Public Service Value/Shareholder Value Analysis • Review current conditions review and processes • Outcome/Shareholder Value model • Current conditions review and baseline Analyze requirements Develop options • Assess technology and solution landscape • Develop requirements and use cases • Perform option analysis and develop solution set • Undertake feasibility check • Develop business case(s) • Outline technology roadmap • Technology assessments • Solution ‘long list’ • Business case for short-listed solutions • Technology Roadmap Define and confirm approach Develop implementation plans and frameworks • Develop solution architecture • Build organization models • Determine commercial and financial models • Develop governance approach and model • Finalize Strategic Roadmap • Strategic Roadmap and supporting materials Define Value Explore Options Develop Strategy
As a result, those responsible for taking key decisions often have insufficient evidence to validate their choices. And in projects like these, which involve so many stakeholders, this omission can prove fatal. As Jeroen Kok, CEO of Trans Link Systems (TLS), the company that was established to bring a nationwide eTicketing system to the Netherlands, observes: “These projects don’t fail on the technology; they fail on decision making.” Define value It’s critically important to define not only why the organization might want to undertake the journey to develop more advanced fare management capabilities, but also what the final destination might look like for all stakeholders in the initiative. Because most public transportation systems are not fully commercial, self-funding ventures, new structures should incorporate an evaluation framework that reflects public service value, as well as the shareholder value methods more appropriate for private entities. The key here is to determine what the scheme’s end users value most highly, as well as what will deliver optimum value for the organization. When the Finnish Ministry of Transport and Communications was considering a charging system that would reduce road use at peak periods—congestion charging—in Helsinki, Accenture worked with them to develop an evaluation framework that incorporated and balanced the desired outcomes of all stakeholder groups. Similarly, in Italy, we worked with Trenitalia, the national rail company, to evaluate not just the potential economic benefits of an integrated fare management initiative, but also the broader public costs and benefits—passenger safety and satisfaction, as well as the impact on Trenitalia’s accessibility goals. Explore options If an organization is to establish a compelling business case to secure stakeholder buy-in before proceeding with a fare management transformation, it’s vital to take a long-term view of what available solutions can achieve, as well as likely future developments and requirements. Technologies, after all, are constantly changing. This approach should encompass people, processes and technology—and proceed in harmony with a solutions design for the business organization and operations. Critically, the design should include clearly defined specifications for both current and future fare management solutions so that organizations can move forward in the knowledge that they are wellpositioned to manage developments in fare media technology and security, as well as constantly evolving customer demands. In 2006, for example, Accenture spent five months conducting a global market and vendor benchmarking and analysis exercise for Societe Nationale Chemins de Fer Francais (SNCF), the French national rail operator, which was reviewing eTicketing technologies. The exercise confirmed the volatility of the market and, by helping the client understand the full range of options, reduced the risk of adopting technologies that could rapidly become redundant. Develop strategy Fare management systems are huge undertakings, with significant longterm implications for business processes, organizational structures and customer relationships. And there are many issues to consider. Resistance to change is just one aspect of the challenge that fare management systems pose. Failure to review and update business models impacted by new technologies is another. Introducing multi-operator smartcard ticketing without adequate revisions to fare and tariff structures between operators, for example, could confuse customers as well as alienating operators. If organizations want to avoid these threats to their business, they must take actions beyond merely selecting a strategy and instead move to fully enable that strategy by developing the detailed implementation plans and operational frameworks to support success. Strong governance models are crucial. In fact, they are an ongoing necessity, from the early stages of bringing together different viewpoints and coming up with a workable longterm strategy, all the way through delivery to the actual operation. The Trans Link Systems (TLS) project, for example, was the Netherlands’ fifth serious attempt to introduce a nationwide electronic ticketing and payment system. Its predecessors all failed to reach agreement between the country’s nearly 20 different, and often turf-conscious, public transport operators. So TLS was careful to get its governance structure right upfront. The company also helped ensure operator buy-in right through to the launch of what became the world’s first “single card access” to all forms of public transport, by holding regular workshops and meetings for all the participating agencies, and sharing progress reports and key issues with all relevant decision makers. 5
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