Moving to a digital future( 8/5/17 )
Digitization is both a challenge and an opportunity for companies. With the possibilities provided by Big Data, Bombardier uses fresh ideas from the start-up scene to reinvent itself and the whole concept of mobility.
It has been a long time since Verner Baird was standing at a ping-pong table. Now, unlike 30 years ago, this IT specialist does not use a ball and paddle, but his laptop and his team. Baird is CIO at Bombardier Transportation and is responsible for the company’s digital transformation. That is why he takes his team out of the office to meet the start-ups, meaning young, innovative companies. “It might seem odd to be sitting with a group of people around a ping-pong table and work on a project for Bombardier,” Baird admits. “But it is exactly this contrast that releases creativity and energy.” And this combination is called for to succeed in the digital future.
Big Data, the term generally used to refer to the global data cloud, leads to changes in mobility. Nowadays, just building good trains is no longer enough. “Beyond arriving reliably on time, passengers now want to be connected to the Internet throughout the journey,” says Verner Baird. And to take them from A to B in all comfort is becoming increasingly challenging because more and more people move to metropolitan areas and use mass transit. By 2050, more than two-thirds of the world’s population will live in cities, according to a study by the German Federal Ministry of Education and Research. “Traffic in the large cities is increasing, and so is the probability for traffic jams,” says Baird. These are not only a nuisance for road users but also an economic problem, as computer scientist Prof. Dr. Stefan Jänichen of the Technical University of Berlin explains: “In the 22 largest German urban areas alone, traffic congestion indirectly costs 7.5 billion euros per year. In view of this figure, a more efficient use of transport routes is important both economically and ecologically.”
Find your bearings in the data jungle
To better understand and coordinate public mass transit, Jänichen has studied the data streams of transport companies with colleagues from the Karlsruhe Institute of Technology. The results have been published in the “Smart Data Business” study. According to Jänichen, they hold valuable information for transport companies and urban planners: “This data enables us to provide more accurate forecasts for future traffic flows, so that operators could plan their capacities much more effectively.” And data comes from anywhere: every train, tram, bus generates data – thanks to cheaper sensor technology, which is increasingly installed. “You can gather millions of data points during the entire service life of a train and then better understand how the train and its systems behave,” explains Baird. As a result, defects can be detected more quickly and the state of both vehicles and the rail network improved in good time – digital real-time monitoring of the infrastructure, so to speak.
Passengers tweeting about traffic obstructions via their smartphones also provide valuable information to transport companies: Where are the major bottlenecks? Which lines are under particular stress at which times? “Subject to proper analysis, the volume and diversity of data streams holds an enormous potential both for operators and for us manufacturers,” says Baird, “and ultimately, it also pays off for the passengers.” The goal is for the reliability and availability of trains to increase, so that more people can travel in greater comfort and safety: in the future, on a single platform, they should be able to find out when their train is arriving or where their bus is at the moment, and also to shop online and pick up their shopping at the nearest station – or to have a rental car waiting for them at their destination. “It will also be a matter of course that your ticket is automatically paid for when you get on the train,” says Verner Baird. “Straightforward and cashless.”
Successful with start-up strategies
The Bombardier specialist has ambitious plans for the company and has to change direction in a number of fields for this purpose. He and his team get ideas and inspiration from young start-up entrepreneurs. But what does a start-up do differently – and better, too, in some ways? Mohamad Chehab, one of Baird’s employees, knows the answer. He runs the Bombardier start-up programme and is looking for potential collaboration partners (see interview). “The main difference lies in the speed of implementation and in the decision-making process,” according to Chehab. “Start-ups are dynamic and able to realize ideas more quickly – also failing sometimes – and then manage to rapidly succeed with something new.”
This approach gives established companies like Bombardier the opportunity to test new concepts at a small scale, prepare feasibility studies and familiarize themselves with new business fields. Reinventing yourself does not happen overnight. And that is precisely what Bombardier intends to do, as Chehab says: “In the future, we will no longer be just train manufacturers, but providers of a new kind of mobility services.”
By the year 2050, over 70 percent of the world’s population will live in cities.
It will be a matter of course that your ticket is automatically paid for when you get on the train. Straightforward and cashless.
Verner Baird, CIO and Digital Leader at Bombardier Transportation
“Innovation is a risky business”
Digitization requires a change of mindset. MOVE spoke with Mohamad Chehab, head of Bombardier Transportation’s start-up programme, about what large corporations can learn from small businesses.
Why does Bombardier need small start-ups?
It is essential for us to work with start-ups. On the one hand, we learn from them and their way of thinking and working. We get to know new business models that will shape the world in the future. On the other hand, this gives rise to new partnerships that, ideally, benefit both sides. Finally, we have something to offer, too: our expertise, our experience, our contacts.
What experiences have you had so far with start-ups?
We are very pleased and astonished at how much progress we are making. Staying in touch with the start-up scene is one of the pillars of our digitization process, which we launched in mid-2016. The search for start-ups that might be suitable for a partnership began in November 2016. By March of 2017, three partners had already been found.
What kind of projects are they?
One of the start-ups deals with the security of industrial networks. Another one focuses on the technical monitoring of railway infrastructure. They use new analytical methods to not only identify but also prevent damage. The third start-up is developing an Internet platform connecting different types of passenger transport, such as trains with rental cars or rental bikes.
What can traditional companies learn from start-ups?
It is more easily possible for start-ups to fail. They can then quickly adapt their projects, improve a few things and give it another go. In the business world, it is not that easy to say, “Okay, let’s try, but it may go wrong.” Innovation is a risky business. But if it works, the yield can be very high.
How does the digitization process affect Bombardier?
If we do it right, we can achieve a lot. Faster implementation of innovative ideas and new business models, and ultimately more benefits and value for our customers and the customers of our customers.