London: Navigating digital, transforming transport

  • June 4, 2015
On June 4, twenty of the UK’s transport leaders gathered for the Global Infrastructure Initiative London Roundtable, an engaging discussion on the impacts of digital on the transport and infrastructure sectors. McKinsey & Company convened the roundtable, in partnership with the Albright Stonebridge Group and Spencer Stuart.

Context: Across industries, customer experiences are being redesigned to be “omni-channel”, personalised and seamless. Simultaneously, we are seeing massive efficiency gains in operations, driven by big data, advanced analytics, sensors, and hyper-connectivity. The roundtable focused on how transport leaders can successfully navigate digital transformation and capitalize on the opportunities, while managing the threats from new disruptive businesses?

Some of the key themes included:

  1. Defining digital opportunities within the organization. Optimizing digital investments requires clearly defining the problems we are trying to solve. The customer is the obvious place to start by managing reputation, digitising ticket sales, and loyalty programs. However, digital can also help reduce the cost of managing assets over their lifecycle. The group heard how Bombardier will reduce the lifetime cost on Crossrail’s rolling stock through sensors and remote monitoring.
  2. The bar on managing reputation and customer information online is very high. Many participants described how quickly service disruptions are tweeted and shared online. Staying ahead requires significant and dedicated resources.
  3. Digital could be powerful in smoothing peak demand. The group was excited about using real-time travel information to educate customers about how and when they should travel. Several participants pushed that, for this to work, the information must be truly multi-mode and designed to the needs of passengers, not the transport providers.
  4. The business case for digital is often negative, but companies still need to invest. In many instances, digital business cases will be unprofitable. However, investing in well-defined and useful digital initiatives is often a necessary cost of staying in business. Companies should be using the lens of thinking 30 years ahead, in order to prepare themselves for the changes that are likely to play out over the next 5 years.
  5. The market for digital talent is not liquid. There are relatively few experienced digital managers in the UK and many of them are reluctant to work in 'old economy' companies. Attracting millennial staff is a challenge and linking purpose to infrastructure job opportunities is worth pursuing. Additionally, transport leaders need to get digital into the DNA of their organizations by embracing a digital culture and providing internal mentoring and training opportunities.
  6. Leveraging social media to communicate with customers and stakeholders. A massive opportunity exists for politicians and public sector organisations to use social media to engage the public to get support for projects and policies. No one is doing this well thus far.