The demand for Business Intelligence (BI) in the transportation industry is palpable. Tackling volatile costs, tighter regulations, and the pressure to chase sustainability, requires transportation companies to leverage data to identify and snap up opportunities for growth. While increasing liberalization and globalization have opened new avenues for expansion for transportation companies, they also need to understand and tackle evolving geo-political regulations and risk due to heightened exposure to factors not under their control.

Business Intelligence has proven to be exceptionally useful to tackle such challenges. It helps companies gain clarity about their transportation costs, and hence give them the ability to control it more effectively. BI also helps them identify negative trends and pre-empt them before their impact is felt, while also providing them with the opportunity to explore opportunities through the analysis of alternate scenarios. Naturally, BI for transportation is not a new phenomenon. In case you want to know more about its history and impact on the industry, read our previous blog about it here.

Despite such evident advantages, the adoption of Business Intelligence in the transportation industry has been lower than expected. In this post, I’ve analyzed the five main factors that contribute towards low BI adoption rates. If your organization operates in the transport sector, read and see if these challenges resonate with you.

Challenge #1: Multiple sub-industries with mutually incompatible data items

There’s a lot to transportation industry than meets the eye. The word ‘transportation’ is at best an umbrella term for a variety of activities that must be synchronized together to take people and goods from A to B. There’s workforce management, Computer Aided Dispatch (CAD), Automated Vehicle Location (AVL), Depot management, fare collection systems, fuel management, maintenance of vehicles, and planning and scheduling of transport. All these systems depend on or deal with immensely varied factors.

For instance, while workforce management would require HR and recruitment solutions, fare collection would require fintech, while planning and scheduling of transport would require tie-ups with civic and administrative bodies. Synchronizing such disparate systems, isolating data points that impact sub-systems, tracking their impact across the value chain, identifying irregularities, and thereby reaping operational insights, can be complicated beyond imagination.

Challenge #2: Legacy IT systems that can’t be integrated

Globalization has catalyzed exponential growth in the transportation industry. The demand for greater focus on logistics management resulted in clients outsourcing their transportation requirements to 3PL organizations. However, in order to maximize their profitability and the value of their products, they need their transportation partners to optimize routes, timings, stops, etc. Businesses view 3PL companies as strategic partners that can optimize the supply chain, reduce the cycle time, and enable them to market their customer responsiveness as a competitive differentiator. Therefore, businesses have been demanding that their 3PL partners use IT systems to collaborate with them and to conduct their business.

While highly integrated BI solutions are available today, they are a comparatively recent development. The truth is that most 3PL organizations have already invested in a haphazard collection of mutually incompatible solutions. These solutions generate data that remains in silos. As a result, this data fails to contribute towards developing the Big Picture insights.

The Forrester Wave Transportation Management Solutions, Q1 2008, states: “The typical legacy TMS has been so heavily customized that it’s impossible to maintain, support, and change. For companies with new business models, especially ones that include international and multimodal expansion, these system limitations can quickly stifle those efforts.”

Challenge #3: Unreliable data

Multiplicity of IT systems and solutions raise questions about the quality of their governance. Furthermore, most such solutions have multiple users. In the absence of appropriate validation processes, the authenticity of the data becomes questionable.

The Forrester Wave Transportation Management Solutions, Q1 2008, further adds: “Performance KPIs are usually present, but often they’re unreliable and not being used. Analytics often rely on Excel downloads, and extracting meaningful conclusions is challenging at best. Faced with these limitations, planners’ hands are tied when it comes to finding new efficiency gains.”

Business Intelligence demands exacting standards of authenticity for data. Transparency is a must while reporting requirements can become stringent on demand. For instance, organizations must fulfill requests for information at short notices and be willing to factor additional qualitative indicators. Unfortunately, the data currently offered by most transportation companies, often fails the quality test.

Challenge #4: Defining the questions

Most BI tools offer their users self-service capability. However, that’s exactly where practitioners usually get stuck. To understand the context, the transportation sector works 24X7 across the globe. Companies must deal with numerous evolving rules and regulations daily. They often struggle with forecasting, planning, and meeting targets. Reporting accurately and on time to the management is a challenge by itself. And when they do, it is hard to figure out the factors that matter.

Business Intelligence requires its practitioners to ask clear questions. In the absence of clarity regarding what’s important, organizations are unable to take the first step i.e. defining the answers they seek in order to get the answers they need. A whitepaper by Matellion states that over 30% of 10,000+ respondents chose the delivery of self-service reporting/analytics as their biggest management information challenge. Clearly, users of BI struggle to gain the clarity that would help them sift through the deluge of information streams, identify factors that actually impact performance, and then frame questions that elicit actionable insights.

transportation graph

Courtesy: Matellion

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Keep Moving Forward with Aptude

Aptude is your own personal IT professional services firm. We provide our clients with first class resources in a continuous, cost-containment fashion.

Our support services will free up your senior IT staff from the overwhelming burden of day-to-day maintenance issues. Now they’ll have time to launch those new projects and applications you’ve been waiting for. Simply put, we can free up your resources and contain your costs. Let’s have a quick chat to discuss our exclusive services.

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Challenge #5: The human angle – Conflicting perspectives and priorities

A report by McKinsey states that the creation of a global supply chain involves more than reconfiguring operational assets and making long-term strategic bets about production-and supply-related risks. It states: “Significant organizational challenges are involved, too, since the decisions and activities of a company’s supply chain group influence (and are influenced by) the sales team, marketers, and product developers, among others. The result is a host of thorny trade-offs… Supply chain, sales, and marketing managers invariably view such trade-offs through the lens of their own responsibilities—and this perspective often leads to disagreements or misunderstandings.”

When functional groups are unable to understand their impact on one another, disagreements are likely. When there are disagreements, priorities become unclear. And when priorities become unclear, the objective of Business Intelligence becomes questionable. Eventually, BI fails to move the organization forward because the individuals that comprise the organization don’t have consensus about where exactly they want to go!

Business Intelligence for transport – What exactly will make it work?

The potential of BI in transportation will stagnate if organizations are unable to transcend these challenges. The key, I feel, is to go around them rather them tackling them head-on. For instance, by employing an agile approach, companies could reallocate their resources on-demand, and hence give priority to people and processes that matter at a particular time, rather than setting down a restrictive priority list for the year or for the quarter.

In addition, organizations need to employ a highly customized, and yet versatile approach towards their digital transformation. Companies that have invested in legacy system have no choice but to move towards technologies that support collaboration and scalability, such as cloud. Companies that have already made that move, can work towards developing more intuitive solutions, by soliciting feedback and opinions from the frontlines. After all, every crisis starts off as a seemingly insignificant issue that your customer care comes across. Doesn’t it? This approach would also ensure that voices across departments and teams are heard, recorded, and mathematically analyzed, so that organizational priorities are defined by hard numbers instead of opinions voiced in the c-suite.

Lastly, organizations must strengthen quality management within the organization as well as in their extended partner network. By having eyes and ears open at every level, the integrity of the data could be maintained. Moreover, trends could be identified in time, so that opportunities for growth are snapped up while warning signs are addressed before they impact the bottom line.

I’m curious: What has been your experience in implementing BI for transportation? Please share any input in the comments below!

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