SNCF: high speed digital transformation

Posted On: 20th November 2018
SNCF: high speed digital transformation

This is the second instalment in our series about digital culture and its fundamental role in the digital transformation of companies. In the first article, Frederick Buhr, head of digital practice at Zalis, described the different phases from the cultural standpoint.

In this edition, we interview Mathias Vicherat – Deputy Managing Director for Strategy, Communications and Branding at the SNCF group, France railroad system.

You would think that a behemoth with €33.5B revenue and 150,000 employees would have problems moving fast in the digital age… Think again!

Frederick Buhr: “Bonjour Mathias, thank you for taking the time to contribute to Zalis' series about digital culture.  Recent articles and surveys published by McKinsey and Microsoft demonstrated that Digital Transformation is all about culture. What is your definition of digital culture and what are you doing to grow a strong digital culture at SNCF?”

Mathias Vicherat: “A few weeks ago, e.SNCF CEO Benoît Tiers kicked off the fourth stage of SNCF Group’s digital transformation programme, three years after its original launch. It was an opportunity to see how far we’ve come and take a closer look at what we’re doing to meet the challenges of the latest process of change, geared around the incredible potential of data mining.

Within SNCF, we’ve modernized our tools. Some 130,000 mobility employees now have smartphones or tablets, and Yammer, our corporate social network, is the busiest in France, used actively by 42,000 employees (out of 70,000 registered) every month.

We’ve put technology at the core of our operations, with drones, connected trains, on-board sensors, and artificial intelligence systems all helping to keep France’s rail infrastructure in good repair and provide predictive maintenance for trains and rail facilities. Not to mention our stations, which can now be operated remotely—escalator activation, for example.

Another sign of our commitment to a strong digital culture is our École Numérique, which has an on-line training hub that addresses each users needs with a personalised offer. Employees can choose from a variety of formats, including in-person training, digital learning, workshops, reverse mentoring and MOOCs.

Our employees have also begun to play an active role in their own career development. Since early 2018, École Numérique has offered an on-line catalogue of interactive training options as well as a database that staff members can use to record their new skills.

To date, over 2,900 employees in digital technology and IT have logged onto the École Numérique platform and taken training. We’re also launching a Digital Passport to make sure that all of our employees get the training they need.

Our '574' digital innovation centres are another powerful tool for transformation at SNCF. Five are already up and running in France, and we plan to launch another three. These incubators have a dual mission: help SNCF meet business challenges by incubating and accelerating projects help meet the cultural challenges facing e.SNCF and the Group in general by spreading a culture of digital technology and innovation".

Frederick Buhr: “One of the pillar of Digital culture is data. How is data managed at SNCF from a strategic point of view?”

Mathias Vicherat: “Data is crucial to our success; it’s a goldmine. We can extract enormous value from it, and it’s urgent that we put it to use, both to benefit our customers and to make SNCF more competitive. Data drives performance for all our programmes, and it shapes our corporate strategy and decision-making.

Our business requires us to track rail operations every minute of every day, and that translates into a treasure trove of data, including timetables, work performed on our 15,000 trains, 30,000 km of track and 3,000 stations. But SNCF also has access to data that customers give us to improve the travel experience, as well as information generated by customer and employee apps, such as predictive and geolocation data. The SNCF app is now the most frequently downloaded transport app in France, with 11 million downloads since it launched in 2015  and we lead the country in open data. All of this represents an extremely valuable asset, which we organize, protect and put to work.

As part of our Data Flux Voyageurs, for example, we anonymize customer geolocation data and use it to help passengers chart their itinerary more easily. Which in turn makes the SNCF app smarter and more personalized. Once users authorize us to track geolocation, the app can suggest their next destination and describe the best way to get there.

In January 2018 we launched The Rail Waze, based on an idea dating back to 2013. It’s a feature of the SNCF app that allows customers to report delays, crowded trains and trains that don’t show up. And it’s been a huge success: today we get nearly 3,000 reports a day.

On the network side, SNCF Réseau is creating a virtual replica of the French rail network. This is a key data project that will allow us to run all of our operations more successfully. Technicians 'scan' the network with Lidar, a remote sensing technology with automated reconnaissance software that can create 3D point clouds. More efficient data acquisition also makes the network more robust by making maintenance and engineering works more efficient.”

Frederick Buhr: “The travel industry has always been customer obsessed… How do you translate this advantage to extract value from the different digital channels you are using (social media campaigns, advertising, user experience when booking a ticket etc…)?”

Mathias Vicherat: “SNCF has the biggest media footprint in France — including on social media — with an average 5,000 mentions a day. We’re fortunate in that customers come to us to get traffic updates, ask a question about a railcard, or find out if their train is on time. Continuing an exchange with a client who contacts you directly on social media is the most advanced way to engage and personalize customer relations.

We cover every available channel, and we want to translate our intense focus on customers into personalized interaction at every point of contact.

Take OUI.sncf—it’s the website for everybody. Business people who want simpler, more efficient travel. Families that need extra services for a complex journey. And young people hunting for last-minute tickets at the best possible price. Obviously, it’s our job to adapt our offer to the customer’s profile.

It’s clearly what our customers expect, and we’ve responded by ramping up our offer to handle a variety of needs, including low-cost, high-speed travel with Ouigo, our Ouibus coach service and more. And we’ve added complementary offers to provide a door-to-door travel experience.

And by the way, OUI.sncf has an entire team that uses artificial intelligence tools to improve personalization. Of course, the challenge is to offer a consistent experience across all points of contact—which is why we’ve created our Feature Team, a cross-functional unit with specialists in marketing, products and data. Their combined expertise allows us to create a unique, comprehensive vision of our customers.”

Frederick Buhr: “Things are moving faster in the digital age, how did you structure your team and define the right process to accelerate delivery of projects?”

Mathias Vicherat: “To meet the challenges of rapid digital transformation and boost performance significantly, you need a team that can pull together and take decisions quickly. In November 2016, we built that team. Team e.SNCF now consists of some 3,500 employees in information systems, digital technology and telecommunications, all of whom previously worked in isolation. By pooling their skills, we’re better positioned to help our business lines marshal SNCF’s digital resources and put them to work. The goal is threefold: make the right technological choices, get projects moving faster, and strengthen our digital resources.

We want to scale up the agility that digital technology gives us.

To fast-track project delivery, we’ve adopted a “3-3-3” method:

3 days to get under way, by moving from an identified need to a qualified project
3 weeks to build a framework, by structuring every aspect of the project and drafting a preliminary memo or create a model
3 months of prototyping to develop a minimum viable product and experiment with it.

After that, we move into pre-production, where we test the solution on a larger scale in its actual environment. Then we help our IT divisions roll out the project and get it into full-scale production".

Frederick Buhr: “Can you give us an example of a digitally related experimentation which did not go too well at first but the data collected helped you turn around and succeed in the long run?”

Mathias Vicherat: “One of my favourite examples is Sirius, an iPad-based app that our drivers can use to access the full range of driving-related information, both before and during travel. It’s currently used by some 1,500 train drivers.

To keep the project moving in the right direction, we brought drivers, area specialists and developers to the table together. It took a lot of fine-tuning, but it all worked out very well in the end.

The biggest challenge came at the start, when we had to convince participants to change their habits and do things differently. That’s always tricky. And when you adopt a new tool—one that uses photos, easier communications, templates and more—you don’t always see the time savings you expected right away.

The other challenge was convincing our employees that it would benefit both them and SNCF to move from paper-based data entry to digital data entry. Harvesting data digitally generates greater value since it is easier to use.

Lying just below the surface is the challenge of changing the way our people do their jobs. That has to happen with each project, with SNCF Group providing support through training and education.”

Frederick Buhr: “What is a new technology you implemented that you are happy with and conversely, what technology did not meet expectations?”

Mathias Vicherat: “SNCF chose to focus on the Internet of Things to make our rail network safer and improve the quality of our operations and passenger services—by using predictive maintenance, for example. Here it wasn’t so much that the IoT fell short of expectations. Instead it was our way of approaching it and deploying it that got us off to a bumpy start. Which brings us back to changing our people, because this isn’t just about technology. It’s about how our employees do their jobs.

By contrast, many of our experiments with drones have been successful. For example, we now use drones indoors to inspect the roofs of our TGV train sets. We expect each of these trains to have a 30-year life, and when they’re 15 years old, we perform midlife maintenance: we take the entire train set apart, check all the components and replace or upgrade them as needed.

In the past, this full inspection meant positioning the train set under a catwalk. The maintenance workers had to harness themselves to the catwalk and proceed along the roof of the entire TGV. By using a drone, we save a full day of work. What’s more, our employees are safer and can focus on tasks that add more value. And we can get the train set back into service faster.

On 5 January 2017, we created Altametris, our drone subsidiary. Its mission is to use drones to help SNCF employees inspect infrastructure, collect data on the ground and in stations, and in general to monitor our assets and premises".

Frederick Buhr: “Thank you very much Mathias for a very thorough exchange on digital culture and transformation from the SNCF vantage point. You have an incredible breadth and depth of experiences in this matter and are certainly a model to follow for other large companies."

Posted By: BTG Global Advisory

Posted On: 20th November 2018

BTG Global Advisory is one of the world’s largest specialist independent financial advisory alliances.