Technological advancements in the transportation industry have been accelerating for decades, but the rate of change has reached a new top speed as passengers look to engage differently. As travel rebounds in the post-pandemic era, new behaviors and expectations for seamless travel demand that transportation leaders rethink how they use technology to address passengers’ needs and desires.
The challenge doesn’t lie in the technology itself, though; rather, it's the fact that new technology has implications for the structure of the entire organization. To manage these implications effectively, it’s imperative for the back office—all of the functions that go unseen by the passenger, from billing to marketing, dispatch, and more—to evolve.
Consider, for example, the case of a large urban transit agency that’s striving to move to contactless transactions. The implications are far-reaching: Ticket vending machines will become obsolete, creating potential opportunities for conductors whose job it is to collect tickets to develop new skills, move into new roles, and take on new responsibilities. On buses, contactless payments will enable all-door boarding in some cities, which eases congestion but poses new challenges for bus operators and creates the potential for fare evasion. The agency will also need to build a new system, which will disrupt the entire organization, impacting employees from finance to logistics and customer service.
More so than in any other industry, the future of transportation looks radically different from today. From rail and transit to road tolls, airlines, and more, the future is intermodal, autonomous, more sustainable, and smarter than ever—it’s one where technology works together imperceptibly to give travelers a single experience, door to door. And with the future of transportation infrastructure likely to be funded through a user fee run through the back office, leaders can’t afford to let the back office stagnate.
In this new era of experience in transportation, organizations must modernize their operations to move more nimbly, enable greater efficiencies, and ultimately enhance the passenger experience. Here’s what you need to keep in mind along the way.
Your operating model should be nimble
In general, many organizations in the transportation sector have been reluctant to change, or slow to do so. They’re accustomed to doing or building something and having it remain in place for decades. But in 2022, businesses must adapt to contend with ever-accelerating changes brought on by seamless access to information, technology advances, the free flow of capital, and other factors.
Leaders must visualize how people, structure, processes, governance, and technology and data—the essential components that comprise your operating model—connect to make change possible. Your operating model sets the foundation for your organization’s ability to transform, and it must be able to evolve to facilitate new ways of working and meet new passenger expectations. Consider how you can design an operating model that will allow your organization to change little and often, manage risk, and drive the greatest value relative to business needs. One way to do this is to implement agile practices to build more “forgiveness” into your operating model. Another way is to integrate insights into your operational strategy, and leverage data and analytics to inform operational decision-making. For example, in partnership with a state turnpike commission, North Highland created an enterprise data management strategy and roadmap which included a disciplined insights framework that aligned dashboard metrics with the desired insights and key performance indicators. The data framework helped support the commission’s business strategy and enabled smarter and faster decision-making, including at the operational level.
Equip your people for the new (and continually evolving) status quo
When evolving your operating model, you’ll inevitably transition from a manual back office to one that’s more automated. As you move from cash to cashless transactions, for example, billing and accounting for millions of transactions can no longer be managed manually. It’s even possible that entire departments will need to be redeployed to other activities and take on new responsibilities. That will require a focused investment in reskilling and upskilling your back-office teams. Many organizations are already developing training programs, such as corporate universities and apprenticeships, to build a workforce fit for a tech-centric future. Importantly, reskilling and upskilling should not be a one-time event, since passenger expectations will continue to evolve, alter back-office operations and ways of working, and require new skills and expertise from your employees.
While it may seem near impossible to predict the skills and expertise that will be required of your workforce in the future, tools like scenario planning can help you identify potential future workforce needs and make informed, strategic decisions and investments in learning and development.
Leverage data to drive improvements
The voice of the customer has always been important, but the rise of multichannel communications makes it easier than ever to gather an incredible amount of input. Data is one of any organization’s most strategic assets, and this is no different for transportation agencies. Consider leveraging structured and unstructured data across multiple touchpoints and channels. And ensure that you’re closing the loop: If, for example, a customer has complained about a faulty road toll via the call center, mobile application, or social media, make sure that you can not only ingest that feedback but also rationalize it, prioritize it appropriately, and circle back to let the traveler know how you’re addressing the issue. This can’t be done in a silo; the back office must be able to share data between operations, finance, product teams, and customer service to make this a reality. This will require new levels of partnership, governance, and cross-functional budgeting and ways of working.
As we look to the future, we know that the volume of data in the hands of transportation organizations will continue to increase exponentially. That’s because of developments such as connected and autonomous vehicles (CAVs), smart cities, Vehicle to Everything (V2X) communication, smart mobility solutions, complex back-office and enterprise resource planning (ERP) systems, and the union of LiDAR technology, the Internet of Things (IoT), and telematics to enhance data collection.
Just like physical assets (roads, bridges, etc.), data should be managed, maintained, and harnessed. The impressive volume of customer data now available must also be protected and applied to understand changing preferences and measure operational efficiencies. Ultimately, richer insights power the personalized experiences that customers expect. With all of this in mind, where to store data and how to keep it safe are critical issues that shouldn’t be an afterthought.
Manage change—and do so sooner than you might expect
Change requires forethought and intentionality. Before rolling out a new back-office system that shifts ways of working, leaders must take a people-centric approach that engages employees, drives understanding, nurtures adoption, and protects against change saturation. Do this by prioritizing change management in your upfront planning process. If you wait until you start rolling out changes to explain the benefits and kick-start training, chances are that your workforce will already be confused. In fact, change management is so important to the success of any transformation, that over one-third (34 percent) of transportation leaders in our research say effective change management/adoption is an obstacle to successfully executing transformation strategies.
Evolving toward the future
The future of transportation is right around the corner, and it looks nothing like the airports, transit systems, and toll road experiences of today. The future turns transportation itself into an experience—one in which the customer is able to seamlessly go from one place to another, regardless of the type and number of modalities they employ. By modernizing the back office and building an organization that is made for change, industry leaders can keep up with customers’ changing preferences and expectations and deliver a truly enhanced travel experience.
