LNER is progressing toward its digital goal by cultivating internal talent and collaborating with cutting-edge companies, and its experiences offer lessons for all enterprises.
How can you bring about change in a sector that has historically been connected with massive infrastructures and embedded operational processes? That is the central question in digital transformation.
The answer, according to London North Eastern Railway (LNER) Chief Digital and Innovation Officer (CDIO) Danny Gonzalez, is to put technology at the centre of everything your company does.
He asserts that “we truly believe that digital is vitally crucial.” “We must provide experiences that live up to or surpass the expectations of our clients.”
Fulfilling that agenda is no simple feat. The rail trip, according to Gonzalez, is “completely full” of potential problems for a traveller, from purchasing a ticket to arriving to the train station to encountering delays on the train to having trouble leaving the station once they arrive at their destination.
LNER aims to fix pain points across customer journeys, but it must make those changes in a sector where legacy systems and processes still proliferate. Gonzalez claims that some of the equipment in use is frequently older than 30 years.
He claims that spreadsheets and a staggering amount of paper are still used in many areas of the rail sector.
“Our work is about looking at how things like machine learning, automation and integrated systems can really transform what we do and what customers receive.”
Gonzalez claims that the work focuses on how technology may be utilised to enhance how the company runs and how it provides services to its clients.
Gonzalez refers to this as LNER’s North Star, a detailed blueprint for digital transformation that “gives everyone a focus on the critical things to do.”
As CDIO, he has assembled a digital directorate of 38 skilled professionals, stepping away from traditional railway processes and governance in favour of innovation and the development of original responses to difficult problems.
A railway firm giving more permission for workers to attempt things and fail is unusual, he claims.
Since 2020, the digital directorate has introduced more than 60 tools and tested 15 proof-of-concepts with the help of its ecosystem of business and startup partners.
One of these ideas is an in-station avatar that has been created in conjunction with Deutsche Bahn AG, the German national railroad business.
Customers could engage in free-flowing conversations with an avatar at a designated booth at the station during an experiment run by LNER in Newcastle. The avatar was integrated with LNER’s booking system to provide consumers with the most recent information on service availability. Following the trial’s success, LNER is currently seeking to acquire a complete solution for wider distribution.
The company is also working on what Gonzalez refers to as a “door-to-door” mobility-as-a-service application, which will keep customers up to date on the travel situation and provide hooks into other providers, such as taxi firms or car- and bike-hire specialists.
It’s important to ensure that the entire journey is integrated, he argues. As a customer, you feel in control and are confident that we will address any issues that arise during the process.
LNER is making significant investments in machine learning technologies for its operational activities that take place in the background. Gonzalez’s team has tested a few noteworthy ideas that are now entering production.
One of these is a tool called Quantum, which enables LNER staff members reroute train services in the event of a disruption and lessen the effect on passengers by processing enormous volumes of previous data.
“Quantum uses machine learning to learn the lessons of the past. The historical decisions that have been made and how they have affected the train operation are examined “He claims.
“It calculates hundreds of thousands of possible outcomes that might occur if particular actions are made. When there is a service disruption, it is radically changing how our service delivery personnel manage trains.”
Gonzalez’s team uses the three horizon model developed by consultant McKinsey to recognise and take advantage of emerging technologies. This transition spans three crucial areas and enables LNER to evaluate prospective development prospects without sacrificing current performance.
The “large, meaty items” that are crucial to daily operations, such reservation and booking systems, are the focus of horizon one, while the “developing opportunities” that the company is presently scouting fall under horizon two.
Gonzalez claims that horizon three, which McKinsey thinks has innovative ideas for long-term profitable growth, is the current focus of much of his team’s efforts.
He claims that method entails providing teams a lot of latitude to experiment, test theories, and genuinely comprehend how the technology functions.
FutureLabs, an accelerator where LNER collaborates with the startup community to see if they can assist advance digital transformation in novel and interesting ways, is essential to our endeavour.
Gonzalez explains that the company “goes out with major problem statements across the industry and asks the innovators to come and help us solve our challenges – and that’s resulted to some of the most impactful things that we’ve done as a business.”
FutureLabs has already achieved ground-breaking outcomes. The “door-to-door” mobility service and the Quantum machine-learning tool have both been created with the assistance of startup partners JNCTION and IOMOB.
LNER recently completed the third cohort of its accelerator and is now looking for fresh creativity. Selected firms get money and mentoring to create and expand digital solutions.
Gonzalez claims that this focused strategy gives LNER’s relationships with and investments in the startup ecosystem structure, which gives it a competitive advantage.
It’s not like other places I’ve observed, where innovation projects frequently include “spray and pray,” he claims. The startups we work with have a considerably higher success rate because they are clear about the issues they are attempting to address.
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Gonzalez’s counsels other experts to be very specific about the issues they’re aiming to resolve through digital transformation.
“Identify your priorities and include the business in the process. It’s crucial that the company is aware of the benefits that digital technology can offer in terms of how you operate as a corporation “He claims.
“The fact that our board recognised that rail needs to improve its digital proposition is fortunate for us. However, we’ve worked hard to develop an awareness of the problems that existed and the fixes we required if we’re going to compete in the future.”