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Wheels of Change: Transportation majors undertake telecom upgrades to improve service delivery

September 30, 2013
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The Indian transportation industry plays an important role in the country’s economy. According to knowledge management company NOVONOUS, India spends 15-20 per cent of its GDP on transport and logistics as compared to 8-10 per cent in other developing countries. In its report titled “Freight Transport Industry in India 2009-2014”, NOVONOUS estimates that over the next few years, the country’s port-based freight operations will register 20-25 per cent growth, which will be driven by the proposed capacity additions at major and minor ports.

Besides ports, other modes of transport such as railways and roads are also expected to give a fillip to the country’s economy. According to the Centre for Monitoring Indian Economy, Indian Railways (IR) is likely to witness a 5.5 per cent growth in freight traffic in 2013-14 as compared to 4.8 per cent in 2012-13. Despite the slowdown in the Indian aviation sector, the industry is expected to pick up in the near future. As per the Geneva-based International Air Transport Association’s  Airline Industry Forecast 2012-2016, it will be the second fastest growing domestic air travel market during the period.

With the transportation industry expected to register multifold growth in the coming years, players in this vertical recognise the importance of optimising their resources and reducing operational costs while delivering high quality services. In an effort to achieve this objective, the majority of the players are making significant investments in upgrading their telecom infrastructure. Transportation companies are deploying various telecom solutions and IT applications to restructure their business processes in order to offer innovative services to clients and develop flexible technology architecture for meeting evolving business needs.

Leading transportation companies are pursuing automation to simplify and integrate various functions within the organisation. For example, shipping companies are increasingly using IT and telecom applications to manage the entire shipping cycle from shipment initiation to delivery and real-time tracking of cargo. Using their telecom networks, shipping companies are ensuring efficient supply chain management including functions such as booking orders and maintaining an inventory. Cargo management is another important area of operation that requires complete automation.

IR and the Delhi Metro Rail Corporation (DMRC) not only use regular telecom services but also depend on SMS-based services and the internet for their day-to-day services and for delivering crucial information to millions of passengers. For example, IR has been using the internet to provide ticket booking facility to commuters. Similarly, DMRC has a robust telecom infrastructure in place and uses technologies like the global positioning system (GPS) to track and monitor the movement of its trains on various routes.

GPS technology is also being used extensively by transport service providers and maritime companies to gain real-time visibility of the location and movement of their fleet and cargo. For example, systems engineering and integration company CMS offers transport majors a GPS-based automatic fleet management system – Nirdeshak – for monitoring and controlling vehicles from a central location. The system collects positioning information, without any driver intervention, which is transferred automatically over a communication network to the central location. The automatic fleet management system has been deployed by organisations such as the Andhra Pradesh Road Transport Corporation and the Delhi Transport Corporation.

The transport industry also uses mediums such as wide area network, multiprotocol label switching platforms, VSATs and Wi-Fi for connectivity. Some companies are also deploying fibre cables for high speed broadband connectivity and seamless communication amongst various locations.

Further, software applications are being deployed to streamline operations. The most commonly used applications across the industry include SAP, instant messaging, customer relationship management (CRM) and enterprise resource planning (ERP). Enterprise service providers such as CMC, Tech Mahindra, GB Solutions and MphasiS provide various software applications to leading firms in the transportation industry. For example, GB Solutions has developed the Global Tracker software for transport companies, which enables organisations to receive orders electronically, leverage bar code scanning and provide electronic proof of delivery.

With regard to mobile and enterprise applications, companies rely on platforms such as web hosting, VoIP, instant messaging and hosted messaging. Moreover, to cater to diverse business and communication requirements, transport companies are deploying enterprise mobility applications like mobile email, mobile data connectivity, conferencing facilities, push alerts and sales force automation, among others.

For network security and protecting their systems against manipulation and theft, organisations use a wide range of IP infrastructure and communication tools. In most cases, organisations invest in a single platform from which they can access and monitor critical security systems – CCTV cameras, fire alarms, access controls, and other information systems. In addition, companies deploy tools like user authentication, intrusion detection and firewalls to secure their networks.

Going forward, transportation companies are also exploring opportunities offered by cloud computing and near field communication (NFC) technology. Cloud computing is expected to help the sector improve service delivery and reduce operational costs. It would pave the way for any time, anywhere connectivity, allowing employees to easily view, transfer and share crucial data. NFC enables travellers to use their mobile phones and other compatible devices to buy tickets and receive travel-related updates. In addition, the technology would aid transportation companies to offer a broader range of value-added services such as loyalty schemes, mobile coupons and personalised discounting.

tele.net surveyed various companies in the transportation sector to assess their telecom requirements and solutions. The following questions were asked as part of the survey:

What are the key technology requirements of the company?

What mix of service providers and vendors is used?

What are the biggest concerns with respect to telecom infrastructure?

What are some of the mobility and enterprise applications implemented by the company?

Which network security tools are used?

Which new product, service or technology holds the most interest or relevance for the company?

Key technology requirements

According to the survey, the key technology requirements of companies in the transportation industry are tracking freight movement, maintaining large databases and deploying mobility solutions.

For companies providing freight transportation services through road, railways or ports, tracking the exact location of their consignment is the top priority. For example, the Kandla Port Trust and the Shipping Corporation of India have deployed freight tracking systems to monitor their goods on the move. Transportation companies use digital bar technology to keep track of goods from the date of loading on the ship to delivery at the designated destination.

The tracking system is also popular amongst cab service providers to help them deliver a safe travel experience to commuters. Companies such as Easy Cabz, Meru Cabs and Carzonrent India Limited use GPS technology to track their fleet on a real-time basis.

Transportation companies need to monitor huge volumes of data regarding inbound and outbound traffic. Therefore, relational database systems are required to manage and integrate large volumes of data within the organisation and across branch offices.

Leading industry players have built a robust telecom system to reduce turnaround time and lower operational costs. They use telecom tools like Ethernet, EPABX, ISDN, leased lines, Wi-Fi and radio frequency, and have installed local area networks and virtual private networks. Leading cab company Meru Cabs has deployed a wide area network for connectivity. The company has set up multiple E1 links with backup links sourced from various operators such as Bharti Airtel and Vodafone India. For last mile connectivity, the company uses a combination of fibre and wireless technologies. Another cab service provider, Super Cabz, which operates in Delhi and the National Capital Region, uses an internet-based leased line network along with primary rate interface (PRI) lines. According to Ankit Raghav, chief executive officer and founder, Super Cabz, the company is using leased lines to connect its servers with the hardware used by its fleet of cabs and the PRI lines sourced from Bharti Airtel.

Online ticket booking portal TicketGoose.com has deployed PRI lines along with an IP-PBX card. The company also uses five leased lines to meet its communication requirements. For last mile connectivity, it has deployed a TTN-based fibre network, which offers a speed of 8 Mbps. Organisations like Meru Cabs and TicketGoose.com have also set up data centres that keep track of data entries and call records and ensure data recovery, storage management and server uptime. Extensive telecom and IT infrastructure is required to operate these data centres.

According to the respondents, various IT solutions play a significant role in helping transportation companies streamline their day-to-day activities and operations. For example, OM Logistics has invested significantly in developing a COBOL-based ERP system – OM Track & Trace Application. It operates on the Micro Focus Server Express platform and supports the company’s core business modules including accounting, reporting, warehousing, human resource and payroll as well as consignment tracking. “While upgrading the company’s legacy telecom and IT set-up, we wanted to migrate the Track & Trace application to contemporary technology architecture. Therefore, we shifted from the Server Express platform to Visual COBOL. The move enabled the creation and development of enterprise class applications that run on various platforms such as Unix, Linux, Java Virtual Machine and the cloud,” says S.K. Goel, vice-president, information technology, OM Logistics.

Further, the company has linked all supply chain elements and currently provides a single-window logistics service to about 500 clients, primarily in the automobile industry.

Service providers and vendors

Organisations in the transportation segment avail of telecom and IT services from multiple service providers and vendors such as Bharti Airtel, Tata Teleservices Limited, Mahanagar Telephone Nigam Limited, Reliance Communications, Bharat Sanchar Nigam Limited, Sify Technologies, Ericsson, Alcatel-Lucent, Wipro, IBM and Oracle.

Key issues and concerns

One of the key challenges faced by transportation companies is technology obsolescence. Upgradation of legacy systems in order to keep pace with fast evolving technologies puts a significant financial burden on companies. The integration and migration of existing applications on a new platform pose another challenge.

Mobile and enterprise applications

In order to streamline their processes and reduce response time, transportation companies are increasingly deploying enterprise applications such as ERP, CRM and dispatch systems. Meru Cabs is using the Oracle E-Business Suite ERP, which covers the financials, human resource management and fleet management systems. The company has also deployed Siebel CRM for subscriber management and sales force automation as well as the BI system and Oracle SOA suite. “The company has developed an in-house cab dispatch system, which has helped enhance its booking operations. It has also developed mobility solutions for field staff and airport operations,” says Nilesh Sangoi, chief technology officer, Meru Cabs.

Apart from CRM and ERP solutions, Meru Cabs also uses the Oracle-Siebel platform and Aspect’s system for interactive voice response applications. In addition, the company website offers real-time booking facility to users. Meru Cabs has also launched an Android application for cab booking and is in the process of introducing an iPhone-based application. It also intends to focus on using analytics to help it optimise the dispatch algorithm, which would result in improved revenues.

Super Cabz uses maps from MapmyIndia for navigation and has deployed various technologies and mobile-based applications to generate data, bills and reports. It has also installed an email server for internal communication and ERP to track the revenue generated by its chauffeurs. The system helps the company identify and block chauffeurs who have been defaulting on payments.

Network redundancy

For backup and data recovery, transportation companies utilise firewalls, storage area network systems, security audits, security operation control centres, leased lines, ISDN lines and data archiving.

Network security

Most of the respondents have a multi-tiered security set-up. By and large, transportation companies have installed surveillance systems for 24x7 monitoring, which alerts the management against theft or system failures and activates various troubleshooting mechanisms.

Super Cabz has deployed servers, antivirus software and firewalls to secure its data and network from internal and external threats. To ensure network security within its premises, the company tracks all emails and stores its data in password-protected servers.

The way forward

For transportation companies, technology forms the backbone of their business. In order to gain a competitive edge, these companies are clearly pulling out all the stops to upgrade their existing communications systems and build a robust telecom and IT infrastructure.

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