Urban Road User Charging Online Knowledge Base
What Do We Already Know About The Theme
The creation of a system to run a new congestion charging or road pricing scheme is very similar to the process of starting up a new business or company. The key is to look at the business model and to understand the key cost drivers and the target customers.
Historically transport practitioners have tended to focus on front end applications when considering transport systems be they traffic signals, automatic number plate reading cameras or real time information systems. Less attention has been paid to the back office applications which in the past have led to inefficiencies and interoperability problems. It has also often led to the development of bespoke software solutions with the inherent problems associated with maintaining and upgrading the platforms and the loss of competition and cost efficiencies.
There is much to be learnt from best practice within private sector businesses. The supplier market is far bigger and more advanced and standard applications bring competitive advantages for the development and maintenance of business systems. By following this example significant benefits can be derived for cities considering congestion charging schemes.
One of the barriers to implementing congestion charging is the cost of operation of such a system. If it is seen to be too expensive to operate there may be insufficient support to go through with the implementation. Similarly political decisions can be made without considering the impacts on the business and as a result can have a detrimental effect on the efficiency of the operation.
System performance is also crucial to public acceptance and key stakeholders need to be convinced that the system will work flawlessly and there will not be any failures particularly in the early days of operation. This however needs to be balanced against the costs of providing high service levels. One way of ensuring that cost and reliability are met is by using proven solutions widely used in the market place.
From a management perspective the key activity is the reporting on business performance. The most effective way to do this is to have a fully automated reporting process which presents key information to the managers to allow them to optimise the efficiency of the business. This requires all the business information to be available on a single platform.
Another key area is customer care and this is an area where poor performance can result in customer and stakeholder dissatisfaction and loss of confidence in the scheme. In order to deal with a customer complaint effectively it is necessary to be able to interrogate the business system to find the customer records from the beginning to the end of the process.
With the wealth of experience in running businesses worldwide there are a number of standard enterprise solutions which will require little in the way of customisation to fit transport applications. The design does however need to be based around the business system in the first instance rather than the traditional way of looking at front end technology first. The commissioning authority also needs to ensure that it has sufficient expertise available when carrying out the procurement and implementation of the business system. The time, effort and cost of developing and introducing a system, particularly from scratch, should not be underestimated.
What does the Business Systems encompass?
The Business System is made up of a number of component parts. At the centre is the core application which essentially stores and processes all the information. Feeding into and out of this are all the ancillary systems needed to run the business. For a congestion charging scheme the technology for detecting and checking vehicles will be a key component. Whatever roadside technology is used is immaterial providing the required information can be passed to and from the central processing system. The other external systems will be very similar to those used by any other business and will include banking, call centres, web interface and automated telephony, retail outlets, debt collection and enforcement. An example of the schematic used in the development of the Edinburgh solution is shown in Figure 5 1.
What are the important requirements for a business system?
The diagram above gives a schematic view of the overall system but when considering the system design there are three distinct areas that need to be addressed. These are Financial Process Management, Operational Design and System Integration and each is described in more detail below.
Financial Process Management
The heart of any business system is the financial processes needed to cover the statutory obligations of the operation and to be able to satisfy future financial processing, accounting, and reporting needs. Everything else including operational design is built around the financial processes.
For a public sector operation there is normally a requirement for complete financial transparency throughout these processes which should be fully auditable, and provide a suite of financial reporting capabilities for both management and statutory requirements.
The issue of potential fraud goes hand-in-hand with perceived trust from users and stakeholders alike. As such the system needs to be designed with this as a key requirement. The best way to cover this is to automate as much of the financial suite of processes as is practicable. Modern Enterprise solutions can provide full automated financial reconciliation down to individual transactions with full system audit capability. Such automation also reduces the possibility of fraud from within the operation.
The key elements are:
• Accounts Payable. The ability to raise and authorise orders, and subsequently receive goods and services and authorise and settle payments for them. This can all be done through automated workflows to optimise operational structures and arrangements.
• Accounts Receivable. The ability to receive payments for goods and services, including refund capability.
• General Ledger. Consolidation of all financial transactions and movements to provide the basis for reporting and audit.
Consideration can also be given to optional functionality, namely:
• Banking and treasury services that might be needed to provide liquidity for the operation.
• Asset Management including full accounting control over assets (back office equipment, offices, Point Of Sale Terminal (POST) equipment, etc), including support for a range of depreciation models.
• A Project Accounting facility to cover the development of future projects within the scheme that might include other transport areas, marketing campaigns, and business efficiency projects.
The way that the business system is constructed, from its basis in the Chart of Accounts structure, will determine operational efficiency and the ability to report on the system performance. Near real time reporting capabilities on financial metrics can form the basis of management reporting and allow the operation to be controlled and managed effectively. The solution may also need to accept payments (and refunds) in other currencies. All of this should be possible through the solution.
The roadside infrastructure to support congestion charging has been evolving over the last few years as discussed in Chapter 4. The key determining factors for successful delivery are strategic intent and organisational arrangements. Much attention is placed on the legislative requirements of a congestion charging scheme but equally important is the design of the Business System. This should start as early as possible and feed in to the overall development of the scheme.
The vast amount of information that will be generated by a congestion charging scheme needs to be analysed and exploited to allow the scheme to be effectively managed, provide stakeholders with valuable operational information, and potentially provide real added value to citizens and other organisations. Information Management is a key design principle in all business systems and the opportunities to make wider use of the information available should be fully explored. Davidson recognises the value of information to management and states that “regardless of the state of your company and its immediate issues…you can only manage what you know. Moreover, you only know what the information tells you. Anything else is guessing.”(Davidson (2001)).
Offering users multiple channels to pay, register queries, complain, and eventually buy additional services will increase take-up of services and improve the user’s perception of the scheme’s efficiency. As such, consideration should be given to including as wide range of channels as possible with provision for including future technology developments. Such an approach will also comply with eGovernment principles which allow the use of internet technology as a platform for exchanging information, providing services and transacting with citizens, businesses, and other arms of government.
By considering the operational model as a whole and developing a comprehensive approach to it, operational processes can be readily supported through the delivered solution which will enable the consolidated Information Management approach mentioned earlier. Delivering a full set of integrated tools to manage the entire spectrum of customer interaction in an intelligent way (full case history, easy access account information, routing and learning from enquiries and complaints) will ensure that a proactive approach is taken. This is important when considering the requirements for customer care and there are numerous examples of businesses failing to provide an adequate service. It should also be borne in mind that call centres are expensive to operate and every effort should be made to use automated systems where possible to minimise transaction costs.
Channel management (the ability to encourage customer access to the system by the lowest cost method) is an essential requirement and should be built in to the solution from the start, even if it will not be fully utilised at first. By understanding customer behaviour, areas requiring attention can be identified and addressed thus improving the service provision.
The business solution that meets these needs should cover:
• The provision of timely, accurate, and intelligent information to support decision making and workflow based processes with escalation capabilities
• Optimisation for e-Business using the internet
• Easy addition of additional channels for customer interaction
• Full support for multiple currencies
• Intelligent Interactive Voice Recognition (IVR) solutions
• Predictive tools for determining trends, behaviours, etc
• A ‘paperless office’ design principle with document management techniques and processes
• Statistical Process Control (SPC) techniques integrated into the solution to directly support continuous improvement
• Process exception control
• Dynamic performance reporting covering all areas of operation and system performance (Figure 5 2 gives an example of a dashboard report)
• Customer service metrics
• Consistent data gathering and storage providing a solid base for forecasting
• Reporting through SLAs, KPIs, etc
• Standardised user experience.
Such an approach, coupled with the possibilities afforded through System Integration, opens the potential to offer shared service arrangements for other applications and service offerings to other authorities.
It is not uncommon on large scale projects for elements of system design and build to be provided by different suppliers. This presents technical challenges and requires the use of an experienced systems integrator to oversee the process. This can be carried out in house or be outsourced but the key is to ensure that the business system has scalability and flexibility built in as a core design principle.
It is important to consider independence of hardware architecture so that front end technologies are independent of back office technologies and the technology base is independent of the subsequent operation. Modular design allows future technological advances to be incorporated with ease and avoids the need for disruptive large scale changes to the system. Modules can be added on demand, new workflows and processes can be introduced without extensive redevelopment and open interfaces will reduce dependency on single suppliers.
As the number of tolling and congestion charging schemes in Europe expands there is a growing need to look at interoperability between systems particularly where electronic collection is used. Technical standards are being developed for electronic tolling systems and these are described further in Chapter 4 and the accompanying Appendix B. The biggest difficulty however is dealing with the transaction in the back office environment. Whilst a tag or transponder issued by another operator can be read at the road side there are a number of difficulties and costs associated with processing the transaction through another back office system. These include checking whether there is a valid account, whether it matches the details of the vehicle being used, whether credit is available, and whether the user has authorised automatic deduction for this alternative system. There are also particular problems with fraudulent use and debt recovery particularly where the registered user is from another country. In ANPR systems detection is less of an issue as the system should be able to accept payment and recognise vehicle registration plates from any area. The problem arises during the enforcement stage where at the moment it is difficult to obtain registered keeper details from other countries’ vehicle registration databases.
How do you design and procure a business system?
The start of the design process should begin as soon as possible in the development of the congestion charging scheme. Early work in preparing outline designs will assist with the development of the overall scheme and highlight some of the key risks and opportunities for the business system. The timescale involved in the design and implementation of such a system should not be underestimated. Typically the process from initial specification through to detailed design and implementation, including procurement phases, can take in excess of three years. The exact timing will depend on the complexity and scale of the scheme along with the chosen procurement route.
When considering the design process the first step is business process analysis where exhaustive scenarios are identified, prioritised and modelled. At this point the manner in which the integrated systems will support the business processes can be defined as can performance and capacity requirements.
The next step is to develop the architecture itself. The following design issues need to be considered:
• Identify each integration component
• Identify communications between components
• Identify user interaction with each component
• Propose a network topology and communications infrastructure
• Establish availability, fault tolerance, and load balancing requirements
• Incorporate security requirements
• Identify common services (e.g. process initialisation, audit, logging, error and exception handling) so that these services can be consistent across the solution
• Define operational monitoring and support
• Define test strategy and test cases to include volume and resilience testing.
Selecting a highly reliable, flexible and scalable business platform is the key to achieving success. Effective integration requires the formulation of an integration strategy and the establishment of an organisational and technical infrastructure to support that strategy.
It is important that the appropriate skill sets for understanding the business system requirements are available within the client organisation from an early stage in the development of the congestion charging scheme.
There are a number of procurement routes that can be adopted ranging from a single turnkey contractor providing the design, integration, supply and operation of the system through to having separate commissions for each of the individual elements. Much will depend on the organisation and resource available within the body promoting the congestion charging scheme and the timetable for implementation. It is recommended that a procurement strategy identifying the opportunities and risks associated with each procurement route be developed early on in the process. This will allow the various options to be evaluated and the best to be selected.
Deriving best value from a business system.
There are a number of key considerations when looking at delivering best value:
• Develop an effective procurement strategy at the outset. The objective here is to ensure that competition is used to obtain the lowest whole life costing while providing the most robust and technically proven solution – this will almost certainly not be the cheapest solution on the table in terms of initial capital investment. Experienced business system specialists should form the central role in the procurement team. Key procurement elements not to forget are;
a. Considering the complete scope of the operation, including financial management and reporting, HR, facilities, payment channels, partnerships, projects
b. Adequately addressing the ongoing support and maintenance of the solution – this is linked with the next key consideration
c. Considering how the operation may develop, both core operations and future possibilities, and account for this in the specification.
d. Ensuring the technology roadmap for the solution is understood and secure
• Specify industry standard (not just sector or function specific) packages rather than bespoke software solutions. This will provide benefit by ensuring that ongoing support and maintenance as well as future upgrades can be carried out at a competitive rate.
• Develop best practice business processes that address and streamline all operational scenarios. This should be complete before system architecture is defined and developed.
• Enshrine process automation in the solution to remove costly overheads. Such automation, coupled with statistical process control can remove the majority of manual intervention in the operation.
• Develop an optimised Operational Model. This needs to consider the most cost effective structures and governance models to run the business and the procurement implications for renewing operator, hosting, and support contracts.
No information on this theme is currently available from the case studies