Sourcing on Right Tracks
The Client
Managing a 49,000-mile long railway track, with over 36,000 employees spread across 28 states, can be a challenging task. Our client, one of the largest railway companies in the US, plays a vital role in connecting a large number of individuals and businesses through this vast network for the last 150 years. A few years ago, the company decided to leverage outsourcing to manage the complexities of its business in a cost-effective way. It wanted to transform its business model to create the best-in-class infrastructure, combining the latest technology with efficient business processes.
Business Need
The railroad industry, being one of the oldest industries, has not been very progressive in its usage of IT. Government regulations, lack of control over revenue management and a conservative approach of doing business — all these factors have posed a hindrance. Building a scalable technology solution for a large railway company was in itself a challenge. Before it decided to revamp, the company was highly dependant on a group of contract workers for its IT needs, with limited control over cost, time schedules and alignment of business with IT.
The client wanted to move from this approach to a more process-oriented model. It was looking to leverage outsourcing to manage costs and IT deployment in a more effective and efficient manner. But the organization’s lack of experience in outsourcing, especially in dealing with an offshore outsourcing vendor, was delaying it from taking the plunge.
Our Solution
The client set out to look for an offshore IT vendor capable of delivering high quality software solutions. Infosys was selected because of its exposure to the industry, proven delivery track record in other industries and the process capability maturity. However, in the initial phase, the client's approach to sourcing was rather cautious due to the fear of losing control. In order to manage the outsourcing relationship, the company created a governance structure, where five people would constantly monitor the entire operation.
Being its first experience of offshore outsourcing, it was but natural that the client had doubts. And Infosys went that extra mile to clear all doubts. Besides demonstrating its capabilities in predictability, profits maturity and project management as part of the Global Delivery Model, Infosys created a special program to bridge the cultural divide between the two countries. An 'India Day' was celebrated in the US to familiarise the team with Indian culture and way of life. This helped improve mutual understanding and respect.
After assessing the client's needs and existing structure, Infosys rolled out a series of applications tailored to meet its requirements. A number of existing business processes were automated, while some innovative applications were also created. The Track Measurement and Analysis system, for example, was a customized solution created for managing and improving tracks. This was useful in analyzing the possible causes of derailment and how derailment could be prevented. Another system was designed to help track the inventory and repair information of all cars and locos. Several other business applications were created in areas like Time Keeping, Finance and Revenue Management, Safety Systems and Reference files system, which enabled the client maintain a central repository of corporate and industry carrier data. In order to manage a 36,000-strong workforce, a number of HR applications were also developed. The Infosys team worked in sync with the HR and Payroll divisions to roll out the Mechanical Manpower Planning System, to process manpower updates, on a real-time basis. Specially customized applications for managing job bidding, crew layoffs, personnel management, compensation and rewards, etc. were also developed.
Benefits
The relationship that began with a number of apprehensions has transformed into a strong partnership over the past five years. All projects delivered so far have been rated above par on various quality parameters like on-time delivery, budget compliance, accuracy of estimation and quality of software. Infosys also received an award in the “Best Cultural Fit” category.
Automation of key business applications and streamlining of operations have resulted in improving accuracy & timeliness and generated savings worth $325,000 in operating expenses. As a result, the company has been able to utilize its resources for more strategic business initiatives. In value terms, this relationship helped generate savings of more than US$20 million. The company has been able to reduce expenses by 35-40%. With increased confidence in our capabilities and delivery excellence, the client has also roped in Infosys Consulting in niche areas of IT business consulting.