Outsourcing your operations and maintenance within public transportation is becoming a popular trend, particularly in rail. Within North America, 74% of commuter railroads outsource some element of their operations or maintenance. So, what’s the impetus for this trend? Why would you outsource your operations or maintenance? How does this decision impact your ability to improve your service?
In 2018, the Transit Cooperation Research Program published a report highlighting the different factors that go into deciding to outsource your railroad’s operations or maintenance. The four primary factors in contracting out work came down to:
- Ownership or control of the railroad
- Commuter rail agency governance
- Agency capability and capacity to perform the primary functions for commuter rail
- Railroad employee considerations
Sometimes outsourcing is beyond your control. Other times it comes down to preference or thinking a private entity will take advantage of efficiencies because of their ability to keep up with rapidly changing technology. Whatever the case, there are important software and data decisions to consider when deciding whether to outsource your operations or maintenance.
Know Your Software and Data Options
When considering whether to outsource your operations or maintenance, you have a few options when it comes to your software and data:
- Keeping software and data in-house – state in your requirements that the operator and maintainer (O&M) use your software. By having full transparency and oversight of your data and software, you will:
- Fully understand your contractor’s activities
- Guarantee contract compliance
- Collect relevant and accurate data
- Analyze data as deemed best by you
- Ensure data privacy
- Confirm proper maintenance of your assets
- Control an in-house system of record
- Full transfer of control to an O&M – if your primary concern is your contractor’s performance (based on a handful of KPIs) and you aren’t interested in data ownership, then this option may be the best for you. The private sector might be able to utilize their speed of procurement and experience of industry best practices to gain serious operational efficiencies
- Somewhere in the middle – this one is simple, pick what’s best for you. This option is a hybrid with some tools in-house and some with the contractor
Knowing the Ownership of Your Software and Data Matters
If you decide to outsource your operations and maintenance, the biggest thing to consider is the ownership of the data and software. The software matters because it is used in your daily operations and is going to be the source of your operational data. Data is part of any business, and it’s used in nearly every business decision. Analyzing your data can help you make better decisions, improve your efficiency, and create a better experience for your riders across all your transportation services.
Data gives you the quality information needed to make informed decisions. If you don’t own your data, you might not be able to fully access it in ways that allow you to harness its value to make those strategic decisions affecting your employees or passengers. An extreme example of not owning your data is social media sites. Your data isn’t actually yours with these sites. You can’t control if Facebook, Twitter, or any other site decides to change their algorithm or delete one of your posts. If that happens, there isn’t a way to get that information or data back. The same thing could happen to you with an O&M if you haven’t put something in the contract to state otherwise.
On a much larger scale, if you don’t own your data, it’s incredibly difficult to integrate it with other data sources and review your business and services with a holistic approach. Your long-term planning and understanding of your assets’ condition and lifecycle, and the changing service levels could be greatly affected since you won’t have historical data to analyze trends.
Your Data Considerations
There are definite benefits to outsourcing your operations. But, the most significant thing you need to remember is that you need to be more aware of your data. How you get that data is up to you.
The easiest way to make sure you control your data is to control the software that generates the data. However, there are other things at play that could prevent you from owning or controlling the software. Whatever the case, here are a few things to remember when considering outsourcing your operations or maintenance:
- Create a data strategy for your organization and align your O&M contracts with it
- Who brings the software? And who’s responsible for and owns the data?
- What are the data sharing and format requirements?
- Understand what happens when the contract ends and if ownership of data is transferred along with the assets and operations of service
If you control your data, you control your railroad’s future. Don’t leave that in someone else’s hand.
If you want to know more about how O&Ms or P3s might affect your data and software, check out this whitepaper on Who Owns Your Software & Data in a P3? A Deeper Look at the Technology Aspects of P3s. Or if you want to learn from an O&M, check out our Transit Unplugged episode featuring Steve Butcher, Executive General Manager, Rail for John Holland.
Marcelo Bravo has dedicated his entire career to rail and transit with over 25 years of experience in the industry. Previous responsibilities have included the delivery of passenger rail cars from cradle to grave, Enterprise Asset Management (EAM) software, and management consulting to transit authorities and railroads, in both North America and abroad. As the Industry Solutions Manager for Rail, Marcelo is in charge of the rail market strategy for North America, which encompasses the Trapeze Rail Enterprise range of offerings.
Paola Realpozo is the product director for rail solutions at Trapeze Group North America. Paola is responsible for ensuring that Trapeze's enterprise rail solutions are continuously evolving to meet the changing needs of their customers and the market.
Prior to joining Trapeze Group, she was director of marketing at LILEE Systems where she was responsible for LILEE’s global go-to-market strategy within the rail and bus space. Prior to LILEE Systems, Paola held various marketing, program management and product development roles within RailComm, Mexican Class 1 railroad Ferromex/Ferrosur, Mabe, and ITX Corp.
Paola co-authored a paper, “Condition Based Monitoring for Mainline Power Switch and Interlocking,” that was presented at The American Railway Engineering and Maintenance-of-Way Association (AREMA) Annual Conference.
In 2010, Paola received an MBA from the Simon Graduate School of Business in Rochester, NY, and a Bachelor of Science in electronic and communications engineering from the Monterrey Institute of Technology (ITESM) in Mexico City, Mexico.