Not a single industry can escape digital transformation. One might naively expect that a railway company is immune to the effects of digitization. After all, transporting people or freight is something very physical, you cannot digitize the trains, the passengers or the goods. Yet, here too, radical changes are taking place. Recently I had the pleasure of having a number of conversations with Michel Kunz, Head of Asset Management and Technology at the Swiss railway company SBB. Their track record in digital transformation is formidable, as the interview below shows.
Just like in any other line of business, customer behavior is a prime consideration in the turnaround of transportation services. Railway customers have more choice when it comes to travelling now that more long-distance coaches are competing with trains, and they expect transparent communication about their individual journey.
Jaques Boschung: Tell me, Michel, what are the goals of the digital transformation at SBB?
Michel Kunz: Well, offering a seamless end-to-end experience is pivotal to the change that SBB is going through. This means more collaboration with other platforms such as Uber, busses, trains, taxi services… Working with these partners turns public transport companies into mobility integrators, offering door-to-door services to their customers.
Customer experience is very important to any company. Is the transformation at SBB also geared towards reducing costs?
MK: Reducing cost by automating, is another axis of digital transformation in the transport sector. While the final arrival date of driverless trains is probably less punctual than Swiss trains, fully automated trains will allow railways to reduce the distance between trains, let more trains run per hour over the same infrastructure and, hence, increase capacity without extra investment in physical infrastructure. This is quite ambitions, as the Swiss railway system is already one of the densest in Europe, with a train every two minutes on the main tracks. In comparison: Spain has a train every 20 minutes.
Automation also plays a big role in making trains and stations safer places. Cameras, for instance, check that platforms are not getting too crowded and, if this is the case, software driven by Artificial Intelligence will alert personnel to this situation.
JB: What role can technology play in transforming your business?
MK: As the example of the cameras shows, technology is pivotal to many of the changes at railways. Offering a better customer experience necessitates a thorough insight into customer behavior and expectations, and in capacity and occupancy rate, i.e. right down to the level of the train carriages. The Internet of Things (IoT) and mobile tracking technology make that possible. In the case of SBB, our telecoms division is currently building an IoT network. The more information we can get, the more we can automate. The responsible handling of data is of central importance to SBB in all its activities. Data protection is a top priority and is guaranteed at all times.
JB: People are usually very resistant to change. How do you cope with the ‘people aspect’ of this major transformation?
MK: Workforce transformation is the third aspect of our change program, besides offering a better customer experience and automation to drive down costs. We need to ensure that the railway’s workforce can absorb the changes that technology brings. All personnel have to be able to use new technology. To give just one example: by equipping technical staff who check the physical state of the rails and the infrastructure with mobile devices like tablets, the necessary repairs can be reported much faster than in the old way of working. Of course, all these controllers need to be trained to work with these devices. With all 33,000 SBB employees now being equipped with smartphones, this makes assigning staff, informing them about changes and publishing work instructions much easier.
JB: Switzerland is not the biggest country in Europe, yet it plays a central role in the European railway network. How does that affect your strategy?
MK: Our digital endeavor proves you don’t have to be a huge company in order to drive change or implement innovative technology. While Switzerland may not be part of the European Union, its railways play a central role in the European rail network. With so many trains passing through Switzerland, SBB needs to be on top of every new technology that any one of its partners is exploring. That way, SBB not only sets the European standard in punctuality and traffic density, it also charges ahead when it comes to innovation.
As this example from SBB clearly demonstrates, IT transformation is the driving force in an overall change strategy for public transport companies as well. However, IT transformation always goes hand in hand with workforce transformation. This applies to any industry, even to sectors where it is less easy to turn products into services. One thing is clear though: you also need the necessary drive to make this metamorphosis happen. How come SBB is so successful in its turnaround? Michel Kunz has the final word on this: “Swiss companies don’t only talk about it, they do it.” As a Swiss citizen myself, I can only agree with that statement!