Navigating digital transformation in rail – this company is doing it right

The rail freight industry wants to embrace the digital revolution; the IT firms are standing ready to facilitate this transformation. Still, the transformation is painfully slow, and the two industries are only gradually moving closer together.

There is no lack of products, equipment or tools that can give the rail freight industry that push it has been talking about for years. No, it is a matter of having the right people onboard, because just having an app or working from a cloud, that does not make you a digital company, says Ingo Paas, CIO at Green Cargo.

Green Cargo is a Swedish rail freight company known to be a digital industry leader. It is, among others, working with Ab Ovo, an IT firm facilitating the rail freight industry. When asked how one could better understand the digital transformation rail companies are going through, Ab Ovo pointed in the direction of Green Cargo. “They have some really exciting cutting edge projects going on.”

Ingo Paas

Monstrous IT system

Had we asked this question two years ago, the answer would have been entirely different, Paas starts off. He entered the company in 2019, after hesitating if he wanted to take the challenge at all. The company was everything but digitally transformed. “In fact, it has a number of highly complex and outdated IT systems in place.”

“The company had 140-150 applications, but none of them were properly maintained. None of the systems were in good shape, and above all, the capacity to invest in the IT systems, in terms of money or human resources, was not there. There was a general belief that the companies’ mainframe and SAP system must be replaced, which Paas disagreed with.”

Everything changed

Everything has changed in the last two years, he continues. “If you would have given the digital transformation a rate, the company would have been at zero two years ago. Today, we are making enormous progress in digitizing core processes, where I would say we are between level 5 to 6 on a scale of 10.

“We are 100 per cent digital when it comes to the foundational capabilities required to drive a sustainable digital transformation. I would rate Green Cargo’s digital capabilities at level 9, based on external feedback.”

What have they done?

The first thing the company did, was building a digital foundation in the cloud, with the emphasis on foundation. Because, as Paas explains, digitalisation is more than just moving things into the cloud. “If you do this right, you can really accelerate digitalisation and start to innovate at the core of the business.”

“Building the digital infrastructure in the cloud provides us with greater autonomy and independence building the future. We are running and integrating multi-cloud platforms that are highly reusable, simple to use and cost effective. We are now able to build any application, integration or analytics capability we want. We can do this cheaper, better, faster and more sustainable than any partner could do for us.”

Digitising the business

With those capabilities in place, Green Cargo started to digitise at the core of the business. With that, Paas refers to the in-house developed customer portal, hybrid apps, intelligent analytics, predictive analysis and the implementation of a European strategy.

“For example, we had a problem with heat generation in the brakes of the trains. We developed an application where we could determine the heat of the brakes with sensors, and build a solution to inform the train driver if action was required.”

Green Cargo and Ab Ovo intersect at the core of the business concerning the planning of our most critical resources: train drivers and locomotives. The processes are managed based on the DELMIA Quintiq platform. This is an application where the complex timetable of both sources is combined.”

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Green Cargo train

Mindshift

Although Ab Ovo and Green Cargo have been partners for years, most of the digital developments have taken place in the last two years. With this shift in strategy, the Green Cargo team was open to all the possibilities, instead of thinking that all this could not be done. It was a cultural change, a mind shift, narrates Paas.

“It is all about getting things done, rather than trying to plan every detail and trying to be perfect. We started off with what we had, build up confidence, made many changes rapidly and bit by bit we were able to accelerate. We have become a highly effective development organisation that is rapidly evolving.

“We hired junior and senior developers and completed the teams with consultants. We now have 3 agile teams and may soon establish a fourth team. We are now at the point that we potentially could sell our integration platform as a product to others, but will continue to focus on our mission to return Green Cargo to profitability.”

Just do it

According to Paas, a lot of European railway companies are willing to invest in digital solutions, but we have not seen any other player doing something similar with these technologies. “But if you build a digital infrastructure first, there are no limits to how far you can go as the technologies and platforms will bring unlimited innovation capabilities to further accelerate and drive the digital transformation.”

“When we started our transformation, we did not have answers to all our questions. From a leadership point of you, I had a sense of urgency to transform IT to better support the business transformation. We just went ahead with it, and it brought us where we are today. In the end, it is all about the right people, trust in the team, trust in yourself, some bold decisions and a bit of luck.”

Ab Ovo

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