Insights & Opinions How to put the UK’s railways back on track by transforming the customer experience By creating a compelling retail experience, backed by open, component-based systems, the nation’s rail operators can greatly improve revenue generation and cost efficiency By Nick Chisnall, Fujitsu “ The recent McNulty report on value for money in the UK rail industry brought home what many in the sector knew already: the UK’s railways are considerably more expensive than those of its European counterparts – and there’s plenty of room for improvement. Sir Roy McNulty’s recommendations include tripling the length of franchises offered to train operating companies, as well as improving co-ordination and co-operation among the various organisations collectively charged with delivering UK rail services. McNulty contends that if his package of measures – which also covers a range of regulatory, employment and cultural issues – is implemented in full, then the industry could make savings of £1 billion a year by 2020. Longer franchises are certainly welcome. With more time to recoup investments, the move will give operating companies a far greater incentive to focus on longer-term operational efficiencies and measures that improve their The rail industry must take on board the latest developments in the wider retail industry to dramatically improve customer experience customers via multiple channels. But being able to offer and build on such services quickly and effectively without breaking the bank depends on the back-end technology being open and flexible enough to add new partners, services, channels and so on, without having to rewrite systems from the bottom up – which means taking advantage of shared services and standard components. Getting on the right platform The rail industry, by contrast, is still some way behind the retail sector when it comes to integrated multichannel retailing and other customer-pleasing innovations. Traditionally, operators have developed isolated “stovepipe” systems to handle ticket sales in different channels. These systems could not easily talk to one another, meaning it has rarely been possible to offer customers a seamless retail experience that is consistent whatever combination of channels or devices they choose to use before and during their journey. Similarly, such systems have prevented operators from introducing more innovative retail ideas and partnerships that could boost custom and revenues. customers’ experience. At Fujitsu, we believe there are two key elements to realising these benefits. One is to work with technology partners that have the experience and expertise necessary to take advantage of new systems and services in a way that’s flexible enough to adapt to an uncertain and rapidly evolving market. The other is that the industry must take on board the latest developments in the wider retail industry to dramatically improve the rail retail experience for customers. But to deliver the kind of improvements and efficiencies McNulty says the industry needs to achieve, this must change. Because of their improved retail experiences elsewhere, customers are coming to expect a similar level of service innovation from every organisation they deal with. If the rail industry fails to give them a compelling retail experience there is a real risk that people will vote with their feet and only opt to use the train when they have no alternative. These goals are inextricably linked. In the retail sector there has been a shift towards providing ever more convenient, personalised and integrated services for All change, please However, the industry is beginning to embrace the kind of changes necessary. Already, transport-owning groups uk.fujitsu.com Insights & Opinions bidding for franchises have to outline how they will drive increased retail revenues. And they’re starting to identify retailing as not merely something they need to do, but as something that could be a real differentiator for them. For example, Merseyrail was the first UK operator to adopt Fujitsu’s STAR ticketing system. This has allowed Merseyrail to revolutionise its concourse ticket retailing, by replacing old-style ticket offices in several stations with its own retail store, M to Go. It sells the full range of Merseyrail and national rail tickets together with hot and cold snacks, sweets and other convenience items. The system was easily integrated with that of Merseyrail’s retail partner to automate functions such as stock control and replenishment. The retail units remain It’s vital to ensure systems are both flexible and future-proofed against technological advances by being based on open standards www.raileasy.co.uk both use Fujitsu’s Rail Information Booking Services (RIBS) as their gateway to access central rail industry information. They offer an improved booking experience to help passengers balance price, ticket flexibility, journey time and on-train facilities. The websites are set up to accommodate a national roll-out of mobile, self-print and smartcard tickets as these are made available on routes by train operators. For others still, it might be about introducing customer loyalty schemes. And then there are also opportunities to improve services by, for example, delivering up-to-date personal travel information or bespoke travel itineraries to customers’ mobile phones, or to have that information printed for them on the concourse at the touch of a smartcard. Again, by using standard, component-based systems at the back end, all this becomes far faster and simpler than it ever was in the past. The express route to success It is vital to ensure systems are flexible enough to meet operators’ specific demands in specific circumstances – and are future-proofed against technological advances (by being based on open standards). For rural operators, the focus might be on reducing costs by replacing staffed ticket offices with smart electronic kiosks. Such systems can also bring other efficiency benefits. STAR, for example, can produce valuable reports from real-time information that help managers evaluate business performance in different areas so they can take quick action. The system can analyse sales data to give advance warning of potentially fraudulent transactions. There are also new marketing opportunities. By marrying business intelligence data from point-of-sale systems with mobile and social media applications, operators can market directly to customers, upselling and cross selling relevant services, while delivering contextual messages about the purchased service (e.g. delays/cancellations). The result: a vastly improved customer experience. Innovative ticket vending machines (TVMs) are another option. Fujitsu’s new Ticket on Departure solution (ToDler) integrates the rail retail components of STAR with TVM kiosks to allow quick access to tickets via multiple touch points, giving customers a flexible, queue-busting service. Overall, the benefits of this approach are so compelling that we at Fujitsu believe its widespread adoption is imminent. In fact the only question that remains for rail operators is whether they want to be on the fast track to this exciting future – or experiencing severe delays. Another approach is to use an online rail ticket booking system. The websites www.MyTrainTicket.co.uk and l About the author: Nick Chisnall is Head of Rail at Fujitsu UK & Ireland open whenever trains are running, making the shop convenient for passengers, improving the station environment and creating additional jobs for rail staff. What next? l Contact Fujitsu: [email protected] l ” Visit our website: uk.fujitsu.com REF: 3346 Fujitsu Services Limited, Registered in England no 96056, Registered Office: 22 Baker Street, London, W1U 3BW Copyright © Fujitsu Services Limited 2011. All rights reserved. No part of this document may be reproduced, stored or transmitted in any form without the prior written permission of Fujitsu Services Ltd. 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