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What do telecommunications and rail have in common?

October 19, 2018
Author: Peter Cochrane OBE

What do the telecommunications and the rail industries have in common? Peter Cochrane OBE, Futurist and former CTO at BT Group shares his thoughts on how both industries are facing the same challenges when it comes to meet customers' needs.

The rail revolution started more than 100 years ago, with the need to transport passengers faster than vehicles, and so the rail industry started its operations. Today, both the telecoms and  rail industries are largely deregulated and are experiencing new challenges to continuously meet rapidly changing customer needs. 

Becoming customer-centric

From a commercial perspective, there is a parallel between the two sectors. 25 years ago, European telephone companies decided to stop engineering legacy businesses to become customer-centric organizations. The rail industry is in a similar state today, where we see new companies like Amazon and Airbnb popping up in the travel industry – and railways now have the opportunity to embrace the same level of customer-centricity. 

"Having a true ‘customer first’ culture and thinking like a service company will help rail thrive and compete with new players already grasping this opportunity."

On the other hand, rail travel faces more challenges than just becoming customer-centric, the infrastructure is a show stopper when it comes to innovationTaking the UK rail industry as an example, one barrier to progress is that government contracts are not long enough for companies to invest in rolling stock, which immediately limits their investment strategy. Whilst transformation on this scale is expensive and time-consuming, prioritizing government investments is essential to driving evolution in the rail industry. 

A similar situation happened when the telecoms industry decided to install optical fiber in their entire  network to digitalize it. Investments were expensive at the beginning, but this rewarded telecom companies with a platform that allowed them to offer more innovative solutions and service to customers.

Looking at other industries for inspiration

When looking for inspiration, the automotive and aviation industries are perfect examples of pioneering innovation. For instance, when it comes to cars, technology is vital to complete a journey seamlessly: with for example new enhancements that can assist the driver if an accident happens. And when it comes to air travel, travelers demand technology that keeps them informed on the go. 

Whilst there is a certain amount of innovation present in the rail industry, operators need to continue collaborating with other modes of transport to help passengers avoid delays and adapt to volatile appointment schedules to their journey. For many people, simple A to B journeys are the exception, life is now more complex and real-time routing changes are slowly becoming the norm.

To sum up, the European rail industry is now embarking on a journey of evolution, but is held back by a lack of ambition and the missing ability to take long-term decisions to make a big difference in the travel scene. 

"I do believe that there is a huge opportunity for railways to become innovators and going beyond customers needs. After all, if the Japanese and Chinese can do it, then surely Europe can do it!"  Peter Cochrane OBE, Futurist and former CTO of BT

 

 

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