BrazilHow outsourcing can add value to Middle East's transport sector
Facing a range of pressures, with Covid-19-induced change at the outset, Middle East’s transport industry is in need of future-proofing solutions. According to Peter Mohring and Kristine Pitts, leaders at Serco, outsourcing is one of the strategic solutions that should be part of post pandemic recovery strategies.
To start off, how has the transport sector been impacted by the pandemic?
Peter: In the global transport sector, including land, sea and air, the impact has been significant. In particular, it sent the aviation industry into crisis almost overnight with an overall air traffic levels down by about 80% globally. Obviously, this comes with huge an economic impact on the industry and all its adjacent segments, tourism and hospitality and the multiple supply chain industry that supports that sector.
In the short term, the immediate actions that we saw from customers were consistent with what you'd expect in a crisis mode, postponing capex and opex investment, cost containment exercises, including suspending outsourcing, supply chain contractors, emphasis on optimising assets and lifecycle management, and halting recruitment and training and reducing workforce numbers. So three key areas where it's had had an immediate impact.
So how can outsourcing help the transport industry?
Peter: Facing these economic pressures, it has never been more timely for transport providers and governments to embrace outsourcing, which help in the recovery period and beyond.
Outsourcing can offer a range of benefits, from freeing up time to focus more on core services, enhancing the customer experience of quality of business processes, and driving down costs while adding flexibility.
How has the sector been outsourcing up until now?
Peter: Across the board, there has been outsourcing in several different segments. Typically, this is in areas that suit third party delivery, such as facilities management, resourcing support, customer expenses and technology. The issue is that the current model will need to be reimagined, because the traditional fixed pricing of input-based to output-based with variable metrics simply isn't going to meet the needs of clients going forward.
From our discussions with clients across all segments in that aviation ecosystem, we see a clear trend: they are looking for flexibility and scalability. They also expect their outsourcing partners to come up with innovative ways of reducing costs, while not degrading a service. Meanwhile, clients are actually demanding their outsourcing companies to revisit some of their outsourcing solutions.
At Serco, we pride ourselves on the agility and innovative solutions we’ve been providing clients and prospects since the outbreak of the pandemic. When we're offering proposals, clients are looking at the approach and saying, “well, that's interesting. We hadn't looked at that before.”
One of the key benefits for any transport operator lies in taking an integral approach to outsourcing spend and contract management. Now that a major ‘contractual reset’ is taking place, it pays dividends to look across the breadth of services and come up with a single contract that allows for scaling across each of the in-scope areas. This can offer major opportunities.
One thing that we are sure of is that travel will return. Serco’s ExperienceLab recently did a bit of research into this. And what did that tell us?
Kristine: One of one of the things that we saw from the research is that travellers are looking for reassurance from the travel providers, across the landscape, whether it’s the airline, the airport or the final destination.
People are really concerned about their safety when they travel. So you now have people who would normally be very comfortable travelling, who would normally maybe travel several times a month, suddenly finding themselves actually anxious about what is needed. What information do I need? What are the travel documents that I require? Do I need a test?
Looking at travel demand, 83% of respondents to our survey said that they are not going to get back on a plane and travel due to contamination concerns. There is one notable exception: 43% of people said they would still travel if it was for the purpose of seeing family.
The transport industry can play a role in growing the numbers. Communication is key. Consistent messaging on how people are kept safe reassures passengers that their health and safety is being looked after.
How can outsourcing improve the passenger experience?
Kristine: As it stands, passengers are feeling very insecure about the travel experience, and outsourcing constituents of this experience to ‘specialists’ can help the travel industry boost the experience. Whether it is information, communications, a smooth digital experience, and embedding positives in key touchpoints, outsourcing companies that are dedicated to their expertise are well positioned to help transport operators and governments.
Where does Serco come in?
Kristine: Serco is an outsourcing expert that takes a holistic view. So when we look at passenger experience or customer experience, we look at it across a number of different industries. We’re taking learnings from the crossovers and how people are reacting. We’re making people feel safe and protected in a mall and we can reapply that to other areas, whether it’s the metro or airport.
Then, we turn insights into practical and implementable solutions. So our combination of having that customer experience capability as well as our operational expertise is really where the value of Serco’s offering comes in. I think that’s something that can be really put to use in the current context.
Peter Mohring is Managing Director of Transport at Serco Middle East. Kristine Pitts is Director of its ExperienceLab.
