Big data leads to efficient mobility
Tuesday, 18 August 2015
Why are infrastructure providers so slow to integrate big data? And what can be done to speed things up? Economic viability cannot be the reason. The payback from investing in such technologies is usually much better than investing in equipment with similar ability to boost capacity. (Extract from a McKinsey publication.)
- First, there is a lack of transparency. Transport infrastructure involves complex networks with many participants. An airport, for example, will have dozens of different airlines, groundhandling companies, and retailers, plus air-traffic control, customs, and the airport-operating company itself. Each player collects its own data and does not necessarily want to share it. That can sometimes make sense; no retailer wants to give away the store. But the ability to track passengers could benefit just about everyone. For example, knowing where foot traffic is and how it moves can help to optimise gate and asset allocation. That could not only increase airport capacity but also boost retail revenues. For that to happen, though, the data need to be pooled.
- Another issue is how to divvy up the costs and benefits of sharing information; different players do not always have the same goals. Airlines might want faster transit times—for example, in order to minimise travel times for connecting passengers—while retailers might prefer passengers to linger to increase store sales. Airports would prefer a high utilisation of assets, but they might value lower utilisation to foster flexibility and enable them to recover quickly after irregular events. Collectively finding a solution that makes every stakeholder a winner is not a simple task and requires a certain level of mutual trust that cannot be assumed.
- Finally, there are regulatory constraints. Infrastructure in many cases is a natural monopoly. Governments therefore have an important role to play—in ensuring that operations are fair and cost-effective, and in creating a regulatory environment that allows data to be collected and used while protecting confidentiality and privacy. But before that can happen, competition and data-protection authorities need to be convinced of digitisation’s benefits. One sizable challenge would be to overcome users’ privacy concerns by clearly stating what data are being collected, how they’re being used, and the ultimate benefit to consumers of cost-effective solutions emerging from data insights.
From a publication of McKinsey.