Fare Management for High Performance: A Strategic Approach to Benefit All Stakeholders

For the first time in human history more than half the world’s people live in cities. As the conduit to services and employment for the vast mass of these populations, urban transport systems are critical to economic growth and social inclusion. Yet maintaining mobility in rapidly growing and steadily decentralizing urban environments is becoming more and more difficult—especially as governments come under mounting pressure to reduce vehicle emissions.

These challenges assume still greater urgency in uncertain economic times. A global downturn can change travel patterns, of course, and constrained credit conditions could temporarily delay investments. But while the impetus to sustainability may also temporarily weaken, investments in land transport are by definition long-term. And the drivers of long-term change—technological, environmental and customer—are just too strong. Moreover, as in the private sector, economic adversity provides a strong incentive for transport authorities and operators to boost competitiveness and achieve high performance through improved cost management and better customer service.

Electronic fare collection facilitates mutually beneficial connectivity. Equipped with “smart” (electronic) media, passengers and drivers enjoy swifter, simpler, safer travel. Automated account management provides operators with the detailed, granular view of traveler activity, trends and mobility behavior that can enable service improvements, increase customer satisfaction, drive revenues—and build high performance in today’s turbulent markets.

Related Services

• Fare Management for Integrated Electronic Ticketing
• Fare Management for Road-User Charging
• Operational Excellence in the Public Transportation Industry
• Organizational Strategy and Transformation in the Public Transportation Industry
  
  

Related Research & Insights

• Building an eTicketing Business Case
• Maximizing the Potential of Road-User Charging
• Smart Card Technology in Public Transportation

Automated, integrated and interoperable fare collection—the Accenture Fare Management Solution—promises to revolutionize both public transport and private road use for travelers, operators and transport authorities.

A truly interoperable electronic payment capability—both multi-modal and multi-operator—can provide an extended service platform that travelers can use for broader applications throughout their daily journey. Such a capability can facilitate parking, fuel purchase and other retail activities. It can enable effective access control in congested or protected zones.

And it can have wider public service applications as well. Indeed, once accepted, such a capability can actually help change public attitudes, encouraging more sustainable transport, as well as providing a tool for easing traffic congestion.

For all their desirability, successful fare management systems are enormously difficult to build—not least because transforming to a more automated world requires the collaboration of multiple stakeholders, each of which will have their own particular concerns.

Technology, of course, is a key enabler of any fare management system. And innovative use of new technology, if deployed and integrated with care, can offer travelers more choices and greater flexibility by providing the means to perform processes in more efficient and creative ways. Technology, however, is just one aspect of long-term strategy. Processes and people are just as important to successful delivery—and can be major stumbling blocks if not tackled systematically as part of the strategic road map to becoming a high-performance business.

Successful system design should address all of the following:

• Customer requirements
• The business case
• Multiple stakeholders and governance
• Technology
• The environment

Building a Strategic Road Map
Designing a strategic road map is a fundamental first step—but one that too many organizations ignore, usually in the interests of trying to accelerate the process. As a result, those responsible for making key decisions often have insufficient evidence with which to validate their choices. And in projects like these, which involve so many stakeholders, this omission can prove fatal.

• Define value—Because most public transportation systems are not fully commercial, self-funding ventures, new structures should incorporate an evaluation framework that reflects public service value, as well as the shareholder value methods more appropriate for private entities. The key here is to determine what the scheme’s end users value most highly, as well as what will deliver optimum value for the organization.
  
  
• Explore options—This approach should encompass people, processes and technology—and proceed in harmony with a solutions design for the business organization and operations. Critically, the design should include clearly defined specifications for both current and future fare management solutions so that organizations can move forward in the knowledge that they are well-positioned to manage developments in fare media technology and security, as well as constantly evolving customer demands.
  
  
• Develop strategy—To avoid threats to their business, organizations must take actions beyond merely selecting a strategy, and instead move to fully enable that strategy by developing detailed implementation plans and operational frameworks to support success. Strong governance models are crucial. In fact, they are an ongoing necessity, from the early stages of bringing together different viewpoints and coming up with a workable long-term strategy, all the way through delivery to the actual operation.
  
  

Platform Services
The technologies that can help satisfy travelers’ as they clamor for speed and convenience are constantly evolving, but capturing the opportunity they present is not straightforward—largely because the business case and commercial structures that could accommodate these technologies have yet to crystallize.

What’s more, while technologies hold tremendous potential, they cannot help transport authorities avoid the big issues that underlie any fare management initiative: Customer convenience; accessibility and social inclusion; operator revenue assurance; and trust.

Sustainability
Transport authorities and operators are coming under mounting pressure to deliver a sustainable transport system—a tough proposition given short-term pressures on cost, capacity and winning the next franchise, pressures that intensify in an economic downturn. The good news is that well-designed fare management systems can make a significant contribution to tackling both short-term challenges and the longer-term goal of sustainability, thanks largely to the sophisticated customer relationship management that they enable.

By making public transport more convenient to use, such systems capture more users, reducing the carbon footprint of each passenger kilometer. This is generally better for the environment—a key goal for practically all the transport authorities and operators Accenture works with.

Accenture understands these challenges better than most. As specialists in delivering innovation that works, we have real-world knowledge and experience of the business processes, software and technology infrastructure solutions— both mature and evolving—that can help companies achieve high performance.

The Accenture Fare Management Solution takes a strategic and holistic approach to the challenges of fare management in today’s tough markets. It starts by designing a strategic road map that takes account of the views and interests of the multiple stakeholders whose buy-in is essential to the success of any fare management system.

It offers the flexibility to accommodate diverse additional users and players with a set of service platforms that incorporate open architecture, common standards and scalability. And because it helps improve the trade-off between capacity and demand, it can lead to better yield management—the key to sustainable transport provision, both public and private.