The recent and rapid digitalization has made commuters and travelers expect new and modern solutions that makes it easier going from A to B. As a consequence, many public transport companies are looking into more data-driven solutions.
As an IT-consultant company that specializes in public transport, we know the pains and challenges experienced in connection with this. We also know how to work with these pains and challenges to find new, sustainable solutions. The goal is to arrive where your business can thrive and your passengers can travel both easier, safer and happier.
This is exactly what we want to share with you in this new series of articles. We hope to bring you on a journey, a journey towards a data-driven public transport that in the end is a win for all.
In this first article we'll touch on the topics that we've learned are the key steps when becoming data-driven within public transport. In the forthcoming articles these topics will be dissected by a team of our business consultants and top developers here at Stratiteq.
Can't wait? Get our free guide to our previously published paper on data-driven public transport here.
The three levels of data-driven business value
From a data-driven perspective there are three major levels of realizing business value, delivering three different types of outcomes.
1. Available and reliable
This first level is about establishing a foundation, where the key is to have available and reliable data. With the foundation in place you can start running reports and analytics on available data, most often historic data.
The expected outcome of this is to use the data for decision-making.
2. Optimized and automated
Having reliable data in place, the next level is to add automation capabilities. From a business perspective, there are two distinct types of automation:
- Process optimization where the gain is in minimizing or removing manual labor.
- Automation when adding new capabilities that can't be performed manually, for example managing real-time data.
The expected outcome of this is to minimize manual labor, to use man-hours for more qualified work, and to increase productivity.
3. Servitization and new business opportunities
The third level is servitization. This means to take the leveraged data and functionality, and package it to be used by the intended customer in their favorite channel; and in doing so possibly create new business opportunities.
The expected outcome of this is increased customer acquisition, satisfaction and retention, lowered costs, and the ability for customers to have access to your services when and where they need them.
The more data sources that are available, the wider the possibilities of serving the customer. A superset of all customer data, which includes virtually all information about a customer at your disposal, and their interaction with your services, can be described as a single view of a customer.
As the organization matures and adopts new technology and processes, effects from the change are creating business value and making an impact.
We're not proposing a big bang approach. It's better to start small, with one dataset or one process. Ideally the one that will deliver the highest business value or solves the biggest pain.
A step-by-step guide on how to level-up
1. Available and reliable: Establishing your capabilities
Basically, this means having access to data which is reliable. Usually you first need to gather data from different source systems, and then make the data available.
Common data sources for this are for instance ticket systems (validations, purchased tickets, etc), vehicle information (type, capacity, GPS time/location, etc), mobile app usage (trip searches, locations, and so on).
Unfortunately, the quality of this data isn’t always the best. Before it can be used, you need different types of processes to increase the quality. The cleaned up data is then usually stored in a data warehouse, accessible via a business intelligence tool.
At this level, the organization can follow up on key metrics via standardized reports and perform various types of analytics.
These are a few examples of common analytics and reports that public transport authorities and operators need to have. For many, this is a manual process. It requires access to several different systems, copying data, manipulating it in a spreadsheet tool, involving several people, and getting different results.
Being data-driven, in this context, means using data to create correct information, to be used for good decision-making by the organization.
2. Optimized and automated: Expanding your capabilities
So, how do you level up? The next step is to add capabilities that let you optimize processes and automate. There are several different types of automation. Their common trait is that they eliminate human limitations as much as possible.
Think of this as functionality that's created to work with the available data. This includes, among other things, data transformation, data combination, data calculation, artificial intelligence and machine learning.
Here we would like to talk about two different types of automation:
Process optimizations – to minimize manual processes, increase quality and productivity.
- Optimizing timetables
- Creating reports that are dependent on data from several systems, combining and calculating data periodically
- Automatic customer segmentation based on patterns
Automation – meaning work that no human being has ever been able to do manually in a timely manner, for example working with real time data, vast amounts of data and/or, complex data, and so on.
- Managing responses to real time requests from thousands of users per second
- Calculations dependent on big data (e.g. predictive occupancy)
- Complex queries spanning different systems, including different actors (e.g. interruption management)
These new capabilities are consumed in different ways. In some cases as a report or as a new data set that you can analyse in a business intelligence tool. It could be data that is sent to another system, used to serve the end users, or a combination of these.
These are but a few examples of the optimizations and automations that are possible. Investment cost for this type of capabilities varies a lot; however labor-intensive work that can be managed through automation often have a very short return on investment.
In order to illustrate what could be possible with automation, we will give an example in the following use case.
The example relies heavily on both process optimization and automation.
3. Servitization and new business opportunities: Capitalizing on your capabilities
The third level is servitization, meaning that you involve and invite users to become a part of your solution, in a way that offers them an added value. A central theme is simplification, as in lowering or even removing the barriers for the customer. In plain language – making it simple to understand and easy to use.
The services should be offered wherever the customer is. Today this practically always means through a mobile and an app. Made right, it's possible to let the customers do most, if not all, of the work and they'll be happy to do it.
The mantra for Servitization is Simplification!
One of the best examples of servitization is within banking, at least in the Nordic countries. Almost all services are available via the different banks' mobile apps, and there's almost no need to ever step inside a bank.
What does this mean for PTAs and operators in the realm of public transport?
Some of these examples are fairly common these days and many people expect or, to some extent, demand that these types of services are available.
Which digital services you can offer is of course directly related to the data that you have available, how you're processing it, and how you've made it available to others.
The total value from each level is not always easy to calculate. As a starting point, consider all the manual man-hours you could possibly do without, allowing your employees to focus on something more important.
Summary: Going from data to business value, across the three levels
In the example above we're using two data sets to derive value from. We have ticket data and APC data. The two are put into the data platform. Let's have a look at how this corresponds to the three levels.
Available and reliable
The data is now directly available and accessible through a BI tool which allows you to create reports and do basic analytics. This information can be used for decision making, to better utilize the fleet and improve timetables, in order to both cut costs and improve customer satisfaction.
Optimized and automated
The same data can be used to calculate the likelihood of fraud. For instance, if there are more people aboard a vehicle than there are validated tickets. The number of potentially fraudulent passengers can then be passed on to fare inspectors who enter the specific vehicle.
This way you get a deterring effect at a fraction of the cost by pinpointing in real time where to go. The results are cut personnel costs, curbed fraud, and increased ticket sales.
With clever automation and algorithms, the same data can be used to predict the occupancy on vehicles. Passengers can then look in their app and choose their level of comfort, by deciding in advance on which departure to take.
This could potentially allow the public transport authorities and operators to flatten the curve, by minimizing peak demand during morning and evening rush hours, and use the fleet better throughout the day.
Stratiteq delivers several different types of services within public transport: strategy, business, technology and data development. The common denominator is that we always strive to make a true business impact together with our clients.
In a series of blog posts during 2021, we'll dive deeper into all of the concepts discussed above. Next up is an article about "Public Transport 101", where we talk more about what is necessary to do in order to achieve the type of analysis that is most important to any public transport authorities.
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If you would like to get in touch with Stratiteq to discuss our services within Public Transport, you are welcome to reach out to me.
Industry Lead Public Transport
+46 (0)73 369 99 34