COMMENT
degree I’ve not seen in other businesses. We’re moving to value-centric areas and we are now – and I’ve not seen this globally – we’re providing services for the whole of the industry.”
Train metering
A prime example of that is the recent pro- ject to move to electricity billing using on-train metering together with GPS tech- nology, measuring acceleration and decel- eration. Network Rail charges TOCs for the electricity their fleets use, on both the overhead and third-rail traction networks. These bills, totalling around £250m a year, have in the past always been worked out using modelling and estimates. But using GPS to get more accurate data is proving beneficial to all.
Swientozielskyj and his team, who devel- oped the idea, think that by using it, costs can be brought down by anywhere from £25-40m a year. The data could also prove very useful for the operators, who can use it to alter driver behaviour and in other ways.
The project, required by the ORR, was pi- loted from April 2010 with 50 trains and went live in the middle of last year with 160 – a rare example of different parts of the industry working together in the interests of everyone.
‘A GREAT SUCCESS STORY’
Shared services expert Joel Roques, European Ad- visory managing director for consultants The Hackett Group, has supported and offered advice to the Net- work Rail team over the past few years. He is deeply impressed with the turn-around they have achieved, telling RTM: “Network Rail is of course in its own ‘bub- ble’, where it is effectively owned by the Government, but acts and trades like a private company, which has probably allowed them to be a bit more aggressive in the way they approach shared services.
“Steve has been very instrumental in setting up and run- ning the finance shared services centre for Network Rail – it’s a great success story in the public sector. They’ve applied all the principles and best practice from around the world. They have a clear understanding of Network Rail’s business needs.”It’s not just about saving costs on the process level: it’s about improving the standard of information you give back to the organisation, so it can take better decisions.”
The calculations involved are obviously complex (the current rules’ glossary of terms and definitions alone runs to four pages) – covering different rolling stock, with different fuel efficiency, on vastly dif- ferent routes. It required a lot of IT innova- tion, but it is hoped that more efficient train operation following analysis of the data will also help cut track maintenance costs.
It has not yet been rolled out network- wide, but it can only be a matter of time.
He said: “We’re sure the regulator will push more TOCs down this road, because ultimately the taxpayer pays that extra, un- necessary money.”
An incentive for operators is seeing ex- actly how much electricity they are being charged for throughout the year, rather than standard charges based on modelled consumption followed by a potentially large ‘wash up bill’ at the end of each year, he says.
People power
Swientozielskyj and his team are not just number-men: they have backgrounds in organisational change, consulting and peo- ple management more widely. Swientoziel- skyj himself spent six years with what was then Price Waterhouse, for example, be- fore getting into the rail industry in 1993.
He said: “The transformation of finance shared services involved a focus on people: talent pools and apprenticeships, for ex- ample, and more recently the Investors in People scheme. That’s been to engage our
staff and for them to understand what we were doing and why.
“We thought we were pretty damn good as a management team, but when we got the feedback, it was clear that we could do a lot better – that was actually quite a painful revelation.
“There were some quite clear signals there for us to improve, and if you’re going to carry people you’ve got to listen to them.”
Risky business
The emphasis on business shared service is almost always on cutting out processes and automating everything there doesn’t need to be manually. But doesn’t the lack of human input and checks introduce an element of risk?
Just the opposite, he argues: “You could argue you’re improving risk. When we had manual systems, our rate of paying things correctly on time was 15%.
“We put in a level of automation, and got that to 80%, quite rapidly, then pushed that to 85%, which is world class level. Suppliers get paid on time, on-the-dot, if they stick to the process.
“The next level takes that technology, which is almost artificial intelligence, even further. If you scan an invoice in, if it thinks it is an ‘I’, the system will learn it is not an ‘I’, it is a ‘1’, so you don’t need that manual intervention constantly – it just learns it and does it.
“We are now yielding rates of up to 96% of our suppliers being paid on time, no prob- lems whatsoever. The technology has actu- ally driven that. I’d say we’re the best, and that’s us paying things in a controlled way.”
The global trend in the private sector, at the biggest companies, is now towards merg- ing all back-office shared service units: not just finance, but also HR, IT, procurement, and so on. This could be the next step for Network Rail too.
Swientozielskyj said: “We are looking now to develop a business services model, basi- cally pulling all those things together. That’s quite hot at the mo- ment and we have a cross-functional team looking at that.”
Steve Swientozielskyj
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rail technology magazine Dec/Jan 12 | 17
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