Seizing the opportunities of digitalisation
Digitalisation has long been making inroads into all business segments at Deutsche Bahn (DB)1. The DB Group is tackling a range of cutting-edge fields, including digital customer platforms, Work 4.0 and automatic train operation. Manuel Gerres, who is responsible for new digital business models at Deutsche Bahn, explains the opportunities of digitalisation and what role having the right partners plays.
Deutsche Bahn is advancing digitalisation in three areas. First, it is using apps and other digital platforms at the interface with customers to make it as convenient as possible for them to access products and services. The aim is to show all routes from A to B digitally to offer the right solution to every customer – commuters, business travellers and vacationers, as well as industrial customers needing to transport their freight. Instead of being informed only once, customers receive dynamic information throughout their journey or along the entire transport route. This approach is crucial.
Second, front-line and administrative processes are being digitalised to make workflows faster and more reliable, making DB’s products even more customer-friendly. Deutsche Bahn will invest around €1 billion in digitalisation projects alone by 2018.
The third field is DB’s collaboration with in-house and external startups to develop new data-driven business models. Deutsche Bahn Digital Ventures GmbH (DB Digital Ventures), a company established in November 2016, is laying the groundwork by systematically promoting and investing in start-ups. This is a strategic step for DB. It allows DB not only to invest in digitalising its core business, rail, it also makes it possible to invest more heavily in new digital business models in mobility and logistics. DB Digital Ventures aims to step up partnerships with start-ups and simplify the acquisition of equity interests in companies. Some €100 million in additional venture capital has been set aside for investment between now and 2019. Another of DB’s objectives is to encourage in-house entrepreneurship. Deutsche Bahn employees have the chance to realise their own business ideas within an ideal framework as an entrepreneur.
Why should start-ups choose to partner with DB? Virtually no other company houses so many current mobility trends under one roof, including connected transport, car-sharing, ride- sharing, bike- sharing and scooter-sharing. Only DB offers this range and there are three more advantages to partnering with DB. The first is its vast treasure trove of data. DB’s open data portal makes 35 million pieces of data available, giving developers and entrepreneurs opportunities we can’t even begin to fathom. Second, it connects startups to customers. Each day 7.5 million passengers take DB trains and buses in Germany alone. Third, DB has the expertise and experience to make it easier for entrepreneurs to understand the industry. In short, by providing access to data, customers and the market, DB offers ideal conditions for start-ups to put prototypes through their paces and get their business models off the ground.
DB benefits because these partnerships help DB bring innovations to market more quickly and better adapt to customers’ ever more rapidly changing needs. It has already established contact with over 400 start-ups through DB mindbox in Berlin, its co-working space. DB mindbox is also home to DB Accelerator which develops marketable products with approximately 30 start-ups so far. DB Accelerator and BEYOND14356, the new corporate start-up accelerator programme and a partnership of DB and the US company Plug and Play, are working on making improvements in DB’s core business and on implementing new business models and products outside of rail transport. Both programmes give young entrepreneurs three months to prototype a new marketable product for DB customers. They are provided support in the form of workshops, mentors, work space and €25,000 in start-up funding.
Efficient rail operations and advantages for customers
Passengers and rail freight customers already experience improvements thanks to digital technologies. DB’s entire fleet of ICE trains has been equipped with a new, powerful Wi-Fi system. DB Navigator, DB’s train travel app, lets customers view the car sequence of all ICE trains in real-time. The digital line agent app uses push messages to inform commuters throughout Germany about delays and route alternatives in the regional transport network. Some functions of these DB apps can also be controlled by voice with Apple Watch and Amazon Echo.
Industrial customers already have the option of tracking freight transport services in real-time, including information such as temperature fluctuations and vibration in containers. In the future, logistics chains will be further streamlined and expedited in cooperation with DB’s partner uShip. Digital technologies are being used in each of DB’s business units to generate noticeable benefits for all customer groups.
DB is also planning to take advantage of fully automatic train operation. This will be a challenge in Germany’s complex hybrid network, in which ICE, freight and regional trains travel at different speeds and at different intervals, but it will allow trains to travel more closely together. Not only will this make train operations more reliable; it will also enable a larger range of rail products and services and improve the rail mode’s appeal. The DB Group has set out to be a technology leader in this field. DB has begun to gather experience through three pilot projects. It is testing one main-line locomotive and one fully automated hump locomotive in rail freight transport. It is also preparing to test special sensor and camera technology on a regional rail line in Saxony. Automatic train operation will be introduced in several stages. This calls for new technologies and a new legal framework, and DB is involved in both of these areas so that it can play an active role in shaping this cutting-edge field.
The same is true of autonomous driving on the ro ad. Smart, self-driving vehicles are ideal when paired with trains and enable customised mobility solutions on demand in major cities and rural areas. Self-driving shuttle buses were tested for the first time in Berlin and Leipzig in late-2016. Deutsche Bahn intends to use autonomous driving to improve door-to-door mobility and make seamless travel chains a reality.
The logistics industry will benefit from driverless vehicles, too, which will enable greater capacity utilisation, automated fleet control and more flexibility on the customer and forwarder side. That’s why DB is also testing truck platoons, or convoys of trucks, which travel in the slipstream of the lead truck.
Employees will remain the key to success in the digital age
Professions are changing as a result of new technologies. Some jobs may become obsolete over time, and others are being created. But we have no reason to be nervous as working environments and professions change. DB is one of the few companies in Germany that does not allow redundancies. And we’re talking about several years until fully automatic train operation becomes a re ality, for example. That will give us the time we need to develop the train driver profession and other professions in the rail sector. We ’re already working on it. DB is also collaborating closely with collective bargaining and social partners, works councils, and employees to make this transition a success. In December 2016, it signed a novel collective bargaining agreement for the future with the German Railway and Transport Union. The new agreement is the first to regulate the effects of digitalisation at work. Employees are now entitled to training measures if their job profile or responsibilities change, and this entitlement is set out in the new collective bargaining agreement.
Networked mobility is the way of the future The demand for mobility is continuing to grow, and it is changing, precisely because of digitalisation. Digital platforms have given customers a growing number of options for getting around and customising their travel. The sharing economy is playing a role, too. People don’t want to settle on one mode. Instead, they want the flexibility to combine train, bus, bicycle, car and air travel as needed and then use the modes that work best for them. The rail mode provides key advantages. Rail is not only the fastest mode on many ro utes; it is also, crucially, the most convenient and environmentally-friendly transport mode. Rail still has enormous potential as modes of transport are combined to a greater extent. That’s why DB is promoting technologies such as autonomous driving and digital customer platforms that make it even easier to combine different modes of transport, while making transport more sustainable in the future. This approach also makes DB appealing to start-ups. There is currently no field more exciting to entrepreneurs than mobility.
Manuel Gerres has been responsible for developing new digital business models at Deutsche Bahn since 2016 and is one of the two Managing Directors of DB Digital Ventures. The company evaluates start-ups that are a good strategic fit with the Group as well as fast growing internal business models at DB. It provides functional and financial support through seed capital and equity investments. Manuel was previously responsible for digital transformation at SBB. The demand for mobility is continuing to grow, and it is changing, precisely because of digitalisation