A borderless future: Transforming the customer experience in the rail industry
By Anne Pruvot, infrastructure & transportation services, Accenture
By 2019, the EU’s rail traffic will be deregulated. What issues does this raise for the operator and their customers?
Imagine this: A rail service to suit all budgets, where a traveller with just one electronic ticket can enjoy a swift, safe and sustainable journey to just about any destination on the network.
Thanks to a combination of deregulation, common standards for train control and command systems, and the extension of high-speed track, much of the world’s rail industry – and its passengers – stand on the threshold of just such a bright and borderless future.
The European Union’s national train companies are now free to pick up passengers in other countries as long as the journey originates in their domestic market; and by 2014, the ability to conduct a journey between two domestic points will be extended to foreign companies.
High-speed lines are starting to facilitate faster, cleaner travel between major cities from Spain to Finland. So much so that on some key routes rail travel is fast gaining market share as a low-cost, low-carbon alternative to both air and road transport. As more countries sign up to the European Rail Traffic Management System (ERTMS) cross-border interoperability looks set to become a reality right across the continent.
Yet few national rail operators are in a position to optimise these exciting new opportunities – or give their customers the integrated rail transport experience that they increasingly demand.
Most European rail companies still operate their own schedules, booking platforms and ticketing, so it’s impossible for a customer to book and pay for a trip involving several carriers in a single transaction. What’s more, few of Europe’s train-traffic fleets are fully fit for purpose. Saddled with ageing or otherwise inadequate rolling stock, and mired in often fractious disputes with the companies that run rail infrastructure, some operators struggle to keep trains running at all – let alone on time and on budget.
By 2019 all rail traffic within the European Union will be deregulated – opening up the marketplace to a wide range of new providers, including airlines and private equity players. In order to compete, today’s rail companies require a new and transformational approach to doing business – an approach that will help them meet the needs of the modern rail passenger and position both rail traffic and infrastructure operators to become successful players in a rapidly globalising marketplace.
They will need more efficient business models, better fixed asset and rolling stock maintenance, and above all, considerably better customer relationship management.
New models, new solutions
New business models are already taking shape. Witness the Public Private Partnership (PPP) financing model that has enabled high-speed train traffic through the Pyrenees between Figueres in Spain and Perpignan in France. Meanwhile, significant increases in both high-speed and regional traffic account for most of the 21 percent increase in cross-border traffic within the EU over the past decade. Despite relatively slow progress toward continent-wide technical standardisation, rail traffic and infrastructure operators have found novel ways of circumventing the challenges of diverse track gauges and signalling systems. Case in point: The train axle system with variable gauge wheels that enables the Paris-Madrid service.
Much more, however, needs to be done. Rail companies now need to reconfigure their own operations, intensifying efforts to develop the leaner, low-cost operating models that have already helped transform much of the airline industry. They also need to implement the sort of rolling-stock maintenance solutions that have so improved customer service at Metro de Madrid, leveraging best practices from other industries and leading-edge technologies to minimise project risks and reduce project timelines and costs.
Most urgent of all, perhaps, are new initiatives for customer interactions. Customers across Europe are clamouring for more reliable, more affordable and more efficient rail services that enhance mobility, especially between and within cities. They require flexible rate structures and seamless, interoperable ticketing systems – the sort of E-ticketing interoperability that travellers within the Netherlands now enjoy, but Europe-wide.
Providing such a service will involve overcoming deep regional rivalries and other major political hurdles – but the means of delivering it are already available. By leveraging analytics-driven solutions that offer better customer information and customised campaign management, and by pursuing distribution initiatives that make the most of best-in-class technologies, rail companies will be able to improve their own revenue management and respond with speed and agility to the constantly escalating requirements of their customers.
(Caption on blog landing page: The ICE German high speed train is seen after it arrived at St Pancras station in London, October 19, 2010. REUTERS/Andrew Winning)