Network Rail Streamlines Supplier Network - InformationWeek

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6/4/2013
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Network Rail Streamlines Supplier Network

British state-owned rail infrastructure manager Network Rail aims to improve efficiency, cut costs by culling unwieldy list of 270 IT vendors to only five.

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Network Rail, the organization that manages Britain's extensive railway infrastructure and assets, is moving to simplify a messy IT procurement process by working with a smaller set of key suppliers.

The organization, which manages bridges and viaducts along with 17 key stations, says its current roster includes more than 270 separate IT partners. That means it's had to maintain numerous systems of varying complexity, including some that were designed as far back as the 1970s, when they were in state ownership as part of the old British Rail.

"We run one of the busiest railway networks in the world and rely heavily on IT to keep everything moving," said chief information officer Susan Cooklin. "By creating this framework we will be able to scale more flexibly our resources to meet demand, while retaining our vital assurance role."

Cooklin says the move will allow her team to improve efficiency while continuing to get 24,000 trains a day onto the British rail networks. More people travel by rail in the U.K. now than at any point since the 1920s, when the network was around twice its current size. No fewer than 1.3 billion journeys are made annually on the U.K.'s now-privatized train routes. Network Rail also handles the back end of 100 million tons of the U.K.'s annual freight transportation.

[ The U.K. is losing the broadband race to its European neighbors. Read U.K. Fiber Failures Hinder Economic Growth. ]

In March 2009, Network Rail committed to a £24 billion ($37 billion) investment in the network by 2015. The organization currently runs one of Europe's largest implementations of the Oracle E-Business Suite, which it uses to manage £5.5 billion ($8.4 billion) in annual payments to suppliers, £2.5 billion ($3.8 billion) of track access payments from train and freight operating companies, £1 billion ($1.5 billion) in payroll, and £3.5 billion ($5.4 billion) in project financing.

Network Rail plans to cull its 270-member supplier list to only five, mostly big systems integrators: Accenture, BAE Systems Detica, Cognizant, CSC and India's TCS. The five companies will deliver IT goods and services to the organization via a set of IT Solutions and System Integrator framework agreements, which will allow them to take more ownership of designing, building and implementing IT solutions to support Network Rail. The framework is "zero value," which means the suppliers don't get paid for winning it; rather, they accrue value from supplying through it.

Network Rail selected the final five suppliers after a bidding process run under EU competition rules.

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