Sleeping giant
JOSEPH INFANTE, CPC Partner, Transport & Infrastructure and Acting Chairman of the Rail Supply Group’s SME Group, says small and medium-sized enterprises can be a huge asset for the rail industry
How SMEs hold the key to unlocking the Rail Sector Deal.
The Rail Sector Deal launched on December 6 2018 announced a ‘new approach’ to collaborative working between the Government and the rail industry.
About time, you might think - especially if, like CPC, you work in an SME (a small or medium-sized enterprise). For a long time now, we have suffered the frustration of seeing talent in the UK underused, simply because it is not located in one of the big Tier 1 contract organisations.
The SME community in UK rail is, by just about any measure, the most effective and diverse in the world. But the rail network has not been getting the full benefit of that diversity, because of outmoded procurement practices and an operational culture that has looked too much to the past. The emphasis in the Rail Sector Deal on digital rail and new ways of working is a positive sign that this is about to change, and the stated aim to direct more spending through SMEs is the surest way to make certain that it does.
Smaller organisations can’t compete with the industry leaders on sheer power, resources and financial muscle, but we can offer speed, agility, openness and innovation.
Everywhere you look - across many industries - digital innovation is being led by small, highly responsive, entrepreneurial organisations and networks. The same is inevitably going to be true for rail.
Future rail customers will rely on digital platforms (apps) that bring them much closer to the rail operation, and which will change the way they use services and what they expect from them in ways that are almost impossible to predict with any great accuracy. When you are working in an environment with that degree of uncertainty and with the potential for such rapid change, flexibility and responsiveness become all important - and SMEs are where those qualities thrive.
It is exciting to see some recognition of these facts in the Rail Sector Deal, and even more
encouraging to see a positive commitment to free access data. Free the data and the apps will follow. The promised open data sharing platform is given as a priority, and we must make sure that it stays one. Data is the lifeblood of any digital system, and if we are going to find new ways to create a sustainable and environmentally responsible rail system we are going to need more and better data all the time.
We have the talent to lead the world in digital rail, provided the necessary data is made available and that we have the right level of investment in the right places. But we must not let the moment pass and slip back into the habits of mind and working practices that have stood in the way of innovation in the past.
As anyone with experience of working as a small business in rail will tell you, we have too often competed with the odds stacked against us because of opaque and poorly thoughtout procurement procedures. The resources required to respond to a two-week deadline to tender for a major project, followed by what often seems like an indefinite wait for the verdict, are not easily available to many SMEs.
It is encouraging that the Rail Sector Deal promises improvements in procurement practice, but it is essential that this is more than lip service. We need to see huge improvements in transparency and in planning - more notice, more clarity and more collaboration.
A proper strategic approach to project planning that gets away from the boom and bust of previous investment rounds would allow earlier engagement with industry, and give the SME supply chain a chance to influence what is procured. Better specifications mean better bids that are more innovative, up-skilling through structured training, local employment and productivity.
In the Rail Sector Deal, the Government is committed to a minimum 33% spend on SMEs across all departments. That will become a reality in rail when the processes make it practical for SMEs to compete, but we will only know it has been achieved when we finally start to measure it in a fair and transparent way.
Amazingly, there are still no firm plans to create such a measure. And the truth is that as things stand, we don’t really have much of an idea what percentage of the Government’s rail investment actually goes to the SME sector.
Anyone who knows the sector well will tell you that it is often less than it seems. Too often the SME involvement, in a major tender managed by a Tier 1 contractor, ends when the bid is submitted. In some cases, what looks like collaboration on paper may not translate into work where it really matters.
The Rail Sector Deal makes a lot of the right noises about these issues. We hope that the Keith Williams root-and-branch review of UK rail that reports at the end of 2019 will add some muscle.
If the Government gets it right, it could unleash the potential of the SME sector to address policy challenges that our bigger, more centralised and less agile competitors can’t meet alone. SMEs are regional, spread widely across the country. We have local knowledge and relationships, and are flexible and quick to respond. We can create employment in the regions, and find and develop skills in places that the big organisations can’t easily reach. This is good for the country and good for the rail sector, bringing skills and ideas to work that would otherwise be wasted.
The new year is in its infancy, and the post-Brexit world is looming ever larger - with all its terrors or opportunities, depending on your point of view. Uncertainty, it seems, is all around. But one thing is sure: whatever happens the future will be digital. We don’t yet know what the tech will look like, we don’t know how it will be used, but we are going to have to build it.
As the next wave of rail investment approaches with the arrival of the five-year spending round of Control Period 6, we can expect a sudden rush of excitement and project procurement. Let’s hope that this round, in keeping with the ambition and vision of the Rail Sector Deal, is different… that the investment spreads beyond the usual suspects and finally unleashes the power of the SMEs. It’s the only way that the digital future our rail deserves can be made to happen.
If the Government gets it right, it could unleash the potential of the S ME sector to address policy challenges that our bigger, more centralised and less agile competitors can’ t meet alone.