Building an eTicketing Business Case

Research by Accenture shows that although benefits like customer convenience are clear, the overall business case and financial consequences supporting the implementation of eTicketing is anything but.

eTicketing creates a significant change in transportation businesses and operational models. The resulting transformation goes beyond “just a technical system” and affects everything from front-end service to back-end support. Accenture’s experience shows that the successful implementation and operation of eTicketing requires the different players—often from both public and private sectors—to gain a shared perspective on benefits and challenges, communicate effectively and behave differently.

A solid business case lays the foundation for this joint endeavor. Without it, public transport operators cannot convince key stakeholders (often elected officials) to provide funding for eTicketing projects. And if the business case is done imprecisely—with only a partial view of what it takes to successfully plan, deliver and sustain systems—the consequences can be substantial.

Related Services

• Fare Management for Integrated Electronic Ticketing
  
  

Related Research & Insights

• Smart Card Technology in Public Transportation
• Maximizing the Potential of Road-User Charging
  
  

While creating a solid eTicketing business case may be complex to formulate, it is certainly not impossible.

Before even beginning the endeavor, it is critical to establish a lead—the “champion”—on either the contractor or buyer side. Champions should be those organizations that “own” the most customers or have the greatest stake in the overall investment. It is the champion that will infuse the right level of energy and commitment to ensure the delivery of a solid business case, since the champion will have the most to gain—or to lose. If there is no clear lead, eTicketing organizations need to agree upon one central entity to drive business case development.

To successfully create an eTicketing business case that articulates the benefits and realistically gauges the costs, organizations will need to steer clear of some common pitfalls. Accenture research reveals one major stumbling block is too narrow a focus on one factor at the expense of other issues.

Most often the focal point is on infrastructure such as gating systems, ticket vending machines and hand-held inspection devices. But if a business case focuses strictly on infrastructure issues, then the rest of the eTicketing picture is overlooked or underestimated. In some ways, getting the physical infrastructure is the easy part. Getting a grip on the eTicketing business context is more complex as you need to consider processes, behaviors and technology issues that surround the infrastructure.

Another common mistake when planning for eTicketing involves “siloed” business cases that reflect too heavily the interests of only one organization. To build a solid case, a composite overview of the costs and benefits across all major players in the value chain is essential. And while the overall business case might be positive, for some players the opposite may well be true. At this point, it is essential that the champion steps in to push the overall business case forward and acts as an intermediary among the participants.

There is no “one-size-fits-all” business case for eTicketing. The exact solution can only be determined based on specific considerations of demographics, existing physical infrastructure and end-user need. Based on our in-depth experience from strategic planning to the successful implementation of eTicketing solutions, Accenture has built a framework to navigate through this initial and crucial phase.

Because all eTicketing efforts are unique, there are many choices to be made. And each one carries potential ramifications that will influence the final ratio of investments, operating costs and benefits, and thus, the outcome of the business case. But despite the uniqueness of each situation, there are some universally valid questions to be considered:

• What are the advantages for the different operators? Are there strong, solid benefits to be achieved? What is the investment required to enable this new system?
  
  
• How exactly does an eTicketing system address revenue generation? Will new customer insights and loyalty potential be created? Can price differentiation increase revenues and yield?
  
  
• How big a factor is reducing fare evasion?
  
  
• Think of your overall operations: Can cost savings be realized and—if so—to what magnitude? What are the efficiencies inherent in an automated eTicketing-based system? Back-end support for an eTicketing system can be provided in-house or it can be outsourced—which makes most sense?
  
  
• What is the impact on customer convenience, the environment and safety? How is this valued against required investments?
  
  
• What other interventions are embedded, such as security and fleet management systems?
  
  
• Will the public embrace the introduction of eTicketing? What is required to create such a reception?
  
  
• Should eTicketing be leveraged for public transit only, or are there additional uses that could be considered? Are there potential partners outside the industry that are ready to invest?
  
  

The answers to these and other critical questions will be fundamental since they will reveal the choices you take and the business case you will develop.

Another key requirement for developing eTicketing business cases: create a multi-disciplinary team to draft the plan. The ideal approach for creating an eTicketing case involves a multi-disciplinary team that includes the key functions touched by the new system: from engineering to IT and back-office support. Additionally, eTicketing will have a major impact on the customer—so the customer contact team as well as sales and marketing should be very actively involved early on.

Making the case for eTicketing can be a daunting process. A low estimate of cost can sink a project in mid-launch while an over-estimation can kill an eTicketing effort before the ink on the business plan dries.

While each business case has its specific aspects and numbers, there are success factors universal to most eTicketing efforts. Business plans need to take a broad perspective on costs and benefits for the multiple entities involved and they need to focus on the entire spectrum of issues from customer experience to revenue generation, infrastructure investments and back-end processes, to safety and security.

The effort demands an unprecedented level of collaboration across disparate parties, and requires a champion—one organization that will drive the process. Getting it right will not only reveal the value of the initial investment, but will also serve as a road map for implementation.