Go-Ahead Group’s Digital Roadmap: An Interview with Craig Ellis, CTO
The transport sector is hugely competitive and companies are fighting hard to win their customers' loyalty. Margins are often wafer thin and rising infrastructure and operating costs continue to bite - as was evident in the recent collapse of a string of European airlines. The emergence of digital challengers – most notably Uber - poses a further competitive threat, and traditional transport operators are being forced to radically improve their customer experience and accelerate innovation in order to remain relevant.
PAC recently caught up with Craig Ellis, the Chief Technology Officer of the Go-Ahead group, which is one of the largest transport operators in the UK with more than one billion journeys completed each year and £3.5bn in annual revenue. The company operates both train and bus services, in the UK and internationally, and as Ellis explains, it sees technology as critical to its future direction.
PAC: What do you currently see as the biggest challenges for the transport industry?
Craig Ellis: One of the major challenges for Go-Ahead is that we are quite often operating on aging infrastructure and systems, especially in our train business where most of the signaling systems on the rail infrastructure is decades old. This makes increasing capacity a major challenge for us. Another challenge is the public perception of the franchising model, which right now, is not always good for a number of reasons. Therefore, the major question for us remains: how can we grow our transport networks and their capacity while at the same time keep our customers happy?
So far, we have made progress, and over the last ten years have doubled the number of passengers but now we are looking at technology and the ways we can use it to increase capacity even further. From a competitive standpoint, disruptive forces like Uber offer Mobility as a Service, and we can see more and more incumbent carmakers like Ford also moving in the same direction. We need to recognise them and introduce our own services which can meet customer demand as we have recently done in Oxford with our DRT experience (https://pickmeup.oxfordbus.co.uk/) . Trains will continue to be the primary form of transport for many, but we need to make sure that the customer experience is at the expected level.
PAC: How important are digital technologies to the future strategy of Go-Ahead, and what do you see as major challenges of technology adoption within a large transport operator?
CE: We are being digitally disrupted because our customers are demanding digital services. For example, they want to be able to use smart cards on trains, which at the moment is only available in the Greater London area, so we need to respond and try to be ahead of their expectations. We recently introduced contactless payments on buses which was a great success, but we are constantly focusing on the implementation of smart ticketing solutions. We also launched digital platforms such as mobile apps, where customers can see timetables and real-time information about their service. We see technology as a tool for innovation, and we're constantly trying to improve our operations in that way. The latest efforts include projects with iBeacon technology, which allows people to get on the bus, get recognised by our system, and get charged once they disembark - this should provide a seamless journey experience. We are also working with IoT solutions by deploying sensors on trains and platforms that collects information. For example, the occupancy of carriages, which like a parking garage, can show where spaces are available.
PAC: What is Go-Ahead Group’s approach to cloud computing?
CE: Cloud is great when it comes to flexibility, as multiple applications can be easily scaled and implemented, as nobody really wants to run datacenters. For now, we play with non-critical elements in the cloud, such as Office 365 in Azure. On the other hand, my main concern with cloud is security and migration, especially when we're moving franchises, like in the case of London Midlands. Therefore we still have on premise core systems, but I expect to significantly increase adoption of private cloud deployments over the course of next five years.
PAC: Passengers have a growing number of transport options available to them. Do you see this disruption as a threat or an opportunity for Go-Ahead Group?
CE: We see it as a massive opportunity, and we went live with our own propositions. As noted earlier in the article, in Oxford we launched our demand responsive offering, PickMeUp, which serves the eastern arc and provides an on demand mini bus service to areas not served by traditional bus routes. All bookings are made through an app and the technology is supplied by VIA.
We also launched Hammock (https://www.ourhammock.com), a startup which focuses on providing smart ticketing and smart payments consultancy services to other players in the market in the UK and globally. Some of the services that we provide include expertise around smart ticketing solutions, the use of VR technologies for training drivers, blockchain expertise as well as knowledge around digital twins.
PAC: How important is collaboration with niche technology innovators and startups for Go Ahead Group? Also, do you see a change in culture within your organisation as it becomes more digital-centric?
CE: We see it as very important especially as a part of innovation. We started our Billion Journey Project accelerator (https://billionjourneyproject.com) for the startups in this area, which is proving a major success and which ten companies are currently going through. Apart from enabling innovation we definitely see technology shifting our corporate culture, but at the end of the day you need to remember what are the challenges you are trying to solve. Ours are transporting passengers from point A to point B and our employees see and feel that technology can really help, which makes them keen on using it fully.
PAC: What are your expectations about the future of transport and how do you see the UK transport sector evolving in 10 years time?
CE: We will see autonomous vehicles playing a massive part in the first mile and last mile of logistics/fulfillment processes which I expect won't disrupt rail transport, but will reduce congestion. Secondly, I expect to see the take-off of the digital railway concept over the next ten years which will mean increased capacity, and the adoption of intelligent traffic management systems like in the airline sector. I really expect to see the rail sector moving away from traditional signaling and control systems, and the industry will begin to trust the new systems and technologies available (ETCS), to get more capacity and capability. We have already improved the capacity on the Thameslink service, and we will be working further on digital payments, digital wallets and apps, and potentially the introduction of autonomous vehicles in some rural locations.
PAC: Which technologies will have biggest impact on the transport industry in the next 1-2 years?
CE: In the short term I think the most important technology innovation will be the ideas that enable the concept of digital wallet, as governments want to get rid of paper tickets. We should see digital payments across all services in the next two years which will possibly be based on blockchain technology. New technologies will enable the collection of even more data and the major challenge for us will be understanding the data to ensure we get the right insights.
In PAC’s view, transport companies are leveraging technology more than ever in order to differentiate, improve their bottom line and to develop new services and business models. On top of technology, PAC sees the power of ecosystems as the key to the door of long term growth in transport sector. More about the latest technology developments in the UK transport sector can be found in PAC Transport Insight Analysis (subscription required).