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Deutsche Bahn’s Simon Daum on digital innovation

Deutsche Bahn is Germany’s state-owned national operator and one of the biggest transport companies in Europe. Simon is currently leading the digital agenda of the group looking at digital strategies and transformation of the businesses. He was recently in Singapore and we caught up with him for a short chat to learn more about the digital initiatives launched by Deutsche Bahn.

Q: What are some of the corporate initiatives launched by Deutsche Bahn’s digital group?

With the foundation of our CDO (Chief Digital Officer) organization, we started working with two teams: one looks into the the digital transformation of our core business and the other one into creating new digital business including a venture arm called “Deutsche Bahn Digital Ventures” that is 100 million euros strong exploring new technologies and investing in startups.

We are proud to currently pilot our very own intrapreneurship program allowing our employees to literally found their own business within the group. Together with other corporates (including Siemens, Bombardier Transportation, Swiss Federal Railways and German Alba Group)we launched our open innovation platform, BEYOND1435, which will pave the way towards a smart future.

Q: When and how did Deutsche Bahn start looking into the digital transformation of the business?

We began our journey some four years ago with small experiments. We had several tours to Silicon Valley to get inspiration and ideas. We set up six initiatives across the group, which we called DB 4.0 (comprising mobility, logistics, infrastructure, IT, operations and HR). In between, we realized that this wasn’t enough to generate all of the innovations organically within our own organization. That’s when we added pillars focusing on autonomous driving on roads as well as fully automated train operations. These are the biggest topics forming our digital strategy for the group, which we are currently bringing to next level concerning transparency and manageability.

To meet the challenges of the future, we are focusing on creating a working digital ecosystem and partnerships are a big part of that. We’re following the principles of open innovation. The innovation landscape in our case was originally built in silos. However, if we want to achieve scalability, we will need to identify the right partners and build up the right partnership skills. It’s not simply done by signing a MOU. We need to constantly engage partners and ensure that the goals and direction are aligned.

Q: What are the challenges faced by transport operators/rail operators in your digitalization journey?

Achieving fully automated train operations has to include huge challenges in every place of the world I assume. This holds for costs, the legal framework as well as operations. In our case, coming right out of the middle of the continent, not only the German framework will be concerned but also the European one. Another aspect is human resources. We need to create a process that is proactive in enabling that change and this has to do with the digital readiness of the workforce. At present, only a minority are involved in digitalization, not the masses. This needs to change dramatically if we want to create impact.

Q: What are the technologies that DB is investing in?

We have within our digital strategy, a set of 40 technologies that we are monitoring constantly. Another skill that we need to build up as a company is technology scouting, on a more professional basis. These technologies are particularly important for the businesses that we’re working in. One one hand Sensors and VR/AR will have relevant impact on our business. On the other hand, 3D printing might have huge effects on the volume of goods transported across countries and continents.

Q: What are the upcoming projects for Deutsche Bahn?

We are constantly looking into the expansion of our networks. When it comes to transport within Germany, a new high speed rail line will be launched in December, cutting the travel time between Munich and Berlin from 6 hours to way below 4 hours. It puts us in good place to grab a bigger market share from airlines and drivers.

We’re also looking at international expansion. With Arriva (100% subsidiary of DB) looking into all European markets, we think to see growth happening in northeast and southeast Europe especially with the liberalization of the latter markets.

On the digital side, we are trying to get more experience in managing autonomous fleets. All the legacy systems need to be digitized and the platform needs to be ready in order to interact with other players in our logistics and cargo business.

Q: What can we expect to see from DB in the next five years?

One thing that I learnt from working in digital strategy is that it might not be a good thing to take a long-term perspective. The future can be so much different from your expectations. What can be expected from the industry is huge change, because the customer is demanding a new form of mobility and there are others on the doorstep that are ready to provide. Transport operators and authorities should work together to define standards and lead the change. If we don’t do so, then we will see disruption from technology companies.

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Want to find out the latest updates in the Asia-Pacific rail industry? Join us at Asia Pacific Rail 2018 on March 20-21, 2018 in Hong Kong, to meet rail leaders in person.

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