A moving experience

All aspects of the transport industry, from road haulage to the London Underground, are becoming increasingly IT-dependent. VARs...

All aspects of the transport industry, from road haulage to the London Underground, are becoming increasingly IT-dependent. VARs are finding success by becoming specialists in key areas, selling technology solutions in a market that is going places

Traditionally, transport has not been regarded as one of the more progressive business sectors actively embracing technology. In many cases it has been a more manual-based industry reliant on heavy machinery and downright hard graft.

Consequently, it has been resistant to IT investment and has become more automated. However, this has changed over the last decade or so as developments in IT and the Internet have opened up many new market opportunities for companies in the transport and distribution sector.

Analysts agree that advancements in information technology will provide and improve ways for all sectors of the industry to support their operations, via improved methods of communication with suppliers, customers and employees.

The transport industry is made up of a number of sectors which, although autonomous, are reliant and connected to each other. These include seaport, marine, rail, air, road haulage, intermodal, logistics and warehousing.

Their technological needs are often the same, with information sharing, for example, being a common problem among all sectors as organisations become increasingly geographically dispersed.

Analysts are generally optimistic regarding the emerging technologies in the transport sector and the opportunities they bring to those interested in entering the market. Dunn and Bradstreet analyst Brian Burke highlights information and telecommunications technologies in the transport sector, often referred to as Advanced Transport Telematics (ATT), as playing a key role in the new European network economy. "They have the potential to offer new solutions to the burgeoning transport problems throughout Europe," he says.

The big issue
VARs looking to gain access to the transport market place or expand their presence in it will certainly need to identify the needs of the differing types of business and pinpoint where their focus should be.

IT contracts within the transport sector are often very large, with many organisations preferring to wrap all project requirements up in a single supplier agreement, rather than delegating individual specialist requirements to specialist IT firms. This can make it difficult for small to medium-sized resellers, specialising in one or two areas, to gain any specific business from these contracts.

To this end, smaller VARs may well need to consider partnering to gain access to elements of the sector, and therefore become part of a wider offering, while retaining their focus and providing competency in their core competency areas.

Changing times
On the roads, the outlook for VARs and resellers is looking quite bright, with the increasing congestion on Britain's infrastructure pressurising haulage and freight companies to look ever harder for ways to improve stock delivery times.

'Just-in-time' deliveries are being voiced as one of the single most important areas of business to get right if these types of business are to survive in today's speedway society.

As marketing manager of GPS solutions vendor Inmarsat, Ian Thomas, says: "These days, it's no good not knowing when the next delivery vehicle is likely to turn up, as the whole staff rota has to be organised around it. "Companies can't afford to have production line staff hanging around waiting for delayed vehicles - it simply costs the business money and its reputation."

Train spotting
Turning to trains, despite the fact that the railways and underground system still retains a rather bureaucratic, nationalised air about it, much political wrangling and change is currently afoot which is gradually making things easier for external business to penetrate.

This market sector, however, is generally agreed to be substantial, holding great opportunity for VARs looking to either enter or expand their business reach.

But they must be aware of the changes that are occurring in the rail sector in terms of structure and ownership. London Underground (LU) is currently publicly owned but moves are afoot as part of the Private Finance initiative to reorganise it and break it into different individual lines. This will mean LU will be controlled and run by separate companies which will be responsible for its maintenance and restoration.

Going underground
Rumours abound that LU may not already have in place the technologies that these new companies want and need to implement to get through the bidding process, therefore the newcomers may well turn to VARs and solution providers to help out.

According to Edward Pratt, industry consultant for software vendor Oracle, demand will be high from the new LU managers, "who are set to invest in the full range of technology, from basic back-office applications to financial and HR software, engineering and main-tenance, manpower and rostering".

The problem, says Pratt, is that many of the existing technologies already in place on the Underground were built on the assumption that they would always be run by a single integrated company - as they have done until now. With the new firms coming in and taking over, Pratt claims that opportunities should abound to provide solutions to reduce the inevitable costs that will arise from multi-ownership.

Good market knowledge, as with all industries, is the first port of call for VARs wishing to enter the market, along with registering as a supplier to a particular market sector, in this case the Registry of Rail Suppliers.

Smart moves
For VARs and resellers, getting into the transport market is claimed by many as holding relatively few barriers. As with any industry, a reasonable knowledge of the main players and what is required in particular areas is always helpful, but Ian Thomas from Inmarsat claims that partnering with intermediary service providers may be one of the easiest ways for resellers to get started.

Inmarsat itself partners with network distributor Stratus, which in turn partners with smaller, more local resellers to get products to end-users. In this way, says Thomas, resellers can benefit from the wider advantages, such as joint marketing programmes and training courses.

Partnering programmes are agreed to be beneficial for the prospective VAR entering the rail sector, as firms often expect to see an established track record from suppliers before they agree to any deal.

The lack of this has obviously delayed many IT procurements in the past, bringing the average length of sale to between 18 months and two years. Analysts generally agree this is now beginning to change, however, with younger managers in place who are more commercially aware.

Partnering programmes
Partnering schemes are in existence from many software vendors keen to get a slice of the action arising from consolidation and change in the transport industry.

Oracle runs a partner programme, which industry consultant Edward Pratt claims is always looking for VARs and solution providers which "can add any type of value to what we already do". He says maintenance, scheduling and rostering are the technology areas which are currently most in demand on the rail networks.

Swallow Information Systems is a CRM solutions provider which provides 'customer feedback' solutions to firms such as BAA, Air 2000 and London Transport.

Key account director Dave Smeeton says the company is looking to partner with resellers who may already be involved with larger CRM projects.

"Partnering is one of the best ways to enter this area of technology as it is so specialist," he says. "Partners may not have the combined and diverse skills that are needed to work in the market on their own, however we can leverage the resellers' core business to best effect."

Dunn and Bradstreet: www.dnb.com
Swallow Information Systems: www.swallow.com
Oracle: www.oracle.com
London Underground: www.thetube.com

Helpful publications
Railway Gazette: a provider of business information and journals to the world's railway industry
Motor Transport: the weekly business newspaper of the UK distribution and logistics industry
Commercial Motor: a road transport industry weekly journal

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