Transperth Supplier and Its Business Strategy

Abstract

This report provides an overview of one of biggest transportation services provider around Australian. Transperth has chosen to apply a new sustainable strategy in order to improve the company service quality and get the expected long-term income. Moreover, this report will discuss the objectives of the company and the problems that have faced the IT department and how they could solve them. The model to be used in this report is the Teece model. This will enable the IT department to apply the suggested strategy in the best face. Finally, the IT department has provided some recommendations to implement the new sustainable strategy.

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Introduction

Sustainability has become a buzzword in these days especially among the people who concern about environment and the Earth future. Nowadays, most of scientists and experts are looking forward for the sustainability to be the solution for global warming and non-renewable energy sources problems. Sustainability is the meeting of present needs without affecting the ability of next generations to meet their vital needs (NCESI 2002, 1).

The present need for sustainability has increased the importance of shifting the organizations to new sustainable strategies. The current strategies do not fully put into consideration the sustainability and the long-term business impacts. This need for the sustainable strategies will be clear if we know that over 85% of the energy that is used around the world comes from non-renewable sources such as Oil, Coal, Gas and Nuclear power. Most of developed and developing nations dependent on these energy sources in their daily activities. Here in Australia, we can find a good example of the importance of using sustainable strategies in the local organizations.

It has been noted that, the Australian transportation sector alone produces the third highest greenhouse gases emissions in this planet. Moreover, Australia has the highest number of registered cars per person in whole world. In Western Australia for instance, there is the highest number of car ownership with 91% of people owning at least one car. The average annual distance traveled is 15,100 kilometers. About half of this distance is just traveling between the work and home (Transperth 2010).

The use of renewable resources such as Wind Power, Solar Power, Geothermal, Tidal Power and Biomass will ensure better business and environmental impacts than using the other sources. In order to get these benefits there are many tools that can helps organizations to shift for sustainable strategy such as Teece Model. Transperth is one of the pioneer companies in Australia participating in the environmental sustainability. This report will also verify how the IT department in Transperth Company will shift in to the new sustainable strategy instead of the current one. The report also explores the obstacles that will face the IT department, their possible solutions and recommendations.

Transperth Overview

Transperth is running under the State Government’s Public Transport Authority (PTA) wing. It represents the public transport system in Perth Western Australia and is operated by the Public Transport Authority (PTA 2010). Transperth has been considered as one of the biggest transportation providers in entire Australia. It offers many services for its customers such as train, buses and ferries in Perth metropolitan region. The following are the services and activities that Transperth has approximately accomplished:

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  • 9,600 timetabled services
  • 12,853 bus stop stations
  • More than 1100 buses
  • Around 43 three-car train sets and 48 two-car train sets
  • 2 ferries
  • About 63 million service kilometres annually
  • And over 125 million customers per year as well (PTA 2010).

On average, Transperth currently handle about 100 contracts at any one time that are aimed at assisting the operations of Perth’s public transport system. These contracts costs about $300 million annually and generate profits of about $70 million per year (PTA 2010). Finally, Transperth has different payment ways than the other transportation providers around the world. The company customers have different ways of paying for the trips and other services offered by Transperth. They can either purchasing own tickets available from the company’s office or tickets machines or pay using the Smart Rider cards like rechargeable plastic card that hold Transperth customer’s account balance.

Our Role

The IT department will ensure the Transperth objectives are met as well as solving the problems that are likely to prevent the company from changing to new sustainable system. In addition, the department will create new and innovative ideas that will help the Company in both business and environmental aspects.

Objectives

The objectives of Transperth are divided into three main parts. Firstly, the company aims at using more sustainable resources, which includes the renewable recourses to operate different company activities and services. Second objective is changing of the payment methods. Currently, Transperth uses Tickets and Smart Rider cards method for facilitating payments. However, the company need to reduce the usage of Tickets and Smart Rider cards which are produced from non-renewable source (the tickets comes from trees and the cards made of plastic). The third objective is Virtualization and cloud computing technologies which is an important objective that the department will try to realize. Virtualization and cloud computing technologies will be applied in the company data center in order to increase the physical equipments against increasing the virtual technologies solutions.

Strategy

Transperth new sustainable strategy is focusing on four issues. These include mainstreaming people and company, climate change and business benefits. The Mainstream aspect entails making sustainability real and tangible for company’s customers. Adopting the sustainability is the shortest and best possible way to ensure this aspect is realised. The Second issue that the strategy will consider is the integration between the company and its customers and the whole residents in general. This integration will ensure a massive group work that will support the community and service the sustainability concepts.

The third aspect that the IT department will consider is the climate change. Developing products as well as services in order to create a low carbon society will be one of the company’s considerations. Finally, business benefits and increasing the company income will be the last aspect. Using renewable resources to reduce the cost and increase the long term income is one of the best ways to realize sustainable strategy that will earn the most possible profits.

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Teece and Liner Models of Innovation

Innovation is a process that brings a new products, new ideas or new service to an organization. In order to adopt the company view, the IT department has chosen the Teece model. This model is depending on three main points including sensing, seizing, and managing.

  • Sensing: This entails sensing of the market and the new technological opportunities such as using solar power and fingerprint scan.
  • Seizing: This entails using dynamic strategy in decision-making and execution of these decisions. For example, the endeavor of the company to shift to the new strategy.
  • Managing: it includes combination, reconfiguration and asset protection procedures. For example, the IT department has recommended in the recommendations stage to make a policy that records the property rights and Patent. (Teece 2009).

Moreover, Teece model has mentioned two factors that will have a strong influence in shaping who will get the maximum profit from innovation. The First factor is imitability which describes how possibly competitors can copy or simulate the innovated technology or idea. There are many ways that the company will use in order to protect itself from imitation. These include intellectual property rights and tacit knowledge.

The Second factor is Complementary assets which include any actions that move around the core innovation. For example, the company brand and reputation, customer relationships, marketing capabilities, strategies, company policies and licensing agreements, among others (Ishabh 2008). On the other hand there are other models that provide different concepts than Teece model. For example, the Liner Model of Innovation. In this model, the innovations will start with basic research, then applied research and its development, diffusion and production (Godin2006).

After comparing these two models, the IT department in Transperth has decided to use Teece model because it is more general and it includes the second model concept.

Problems

In order to fulfil the suggested strategy, the IT department must specify and understand the problems that will restrict the department from reaching their objectives. Problems such as company usage of biofuel, usage of electricity from non-renewable source providers, Tickets and SmartRider Cards consumption, customer awareness level and data’s center transactions have determined to be solved in the next stage of strategy plan.

For the first problem, the company is consuming a massive amount of biofuel like Natural Gas and Diesel for the buses and ferries. This will affect both the environmentally (harmful emissions) and business sides (the rapidly increase in the Oil cost because it is non-renewable source) (Transperth 2009). Using electricity to operate trains is the second problem. Electricity from non-renewable source providers has made this problem because it represents another face of biofuel consumption but in indirect way (trains consume electricity and electricity produced from biofuel). Usage of Ticket & SmartRider Cards is another kind biofuel consumption (cards made of plastic while plastic comes from the Oil) in addition to the paper waste. Customer’s awareness level is one of the biggest challenge facing the department of IT in Transperth Company.

The problem could be divided into two parts. The first one is the awareness level of the customers about the environment and the importance of Green IT and sustainability issues and the second part is the awareness about how they can manage their trips before they decide on the mean of transport. They may choose the fastest and shortest route to reach their destination. The Final problem determined by the IT department was the Datacenter transactions. Transperth data centre has not provided enough virtualization technologies in their daily transaction. They also do not apply the cloud computing in their daily actions as well.

Solutions

In order to achieve the company’s objectives, we have suggested the following solutions:

  • Hybrid engines: the use of Hybrid engines in the company buses and ferries instead of the biofuel engines will ensure a better result in different aspects. For example, the use of Hybrid engines with two or more power sources such as hybrid gas-electric engine that combines the electric engine’s low pollution output with the high power of the gas engine. Another kind of Hybrid engine is known as the hydrogen engines which basically use water (H2O) to run the engine. It uses the Hydrogen power to run the vehicle and in the same time, it emits Oxygen (Volponi 2005). These kinds of engines will reduce the consumption of biofuel as well as the biofuel gas emissions.
  • Fingerprint: these reduce the usage of tickets and SmartRider cards. This is one of the company priorities. In order to solve this issue the IT department suggested to use the fingerprint scan technology. Instead of issuing the tickets for every passenger and producing the SmartRider cards for the other customers the company will identify the users and their account balance based on their fingerprint.
  • Trips planning services: the company will offer some brochures and flyers to teach the customers on how they can plan for their trips(this include website for showing the shortest and fastest route from point A to point B).
  • Passengers’ awareness: as well as Trips planning services there will be some advertisements and posters declaring the importance of saving the environment and using sustainable and renewable power sources.
  • Solar power suppliers: instead of using biofuel power, the company will use electricity power from solar power providers.
  • Virtualisation & Cloud computing: In order to solve the data centre non-sustainable transaction problems, the company will adopt this technology to get the most benefits from the most recent technologies.

Strategy implementation

Reducing risk is one of considered issues in Transperth sustainable strategy. Therefore, the Transperth IT department will adopt the new strategy by using the Parallel implementation. The old and new system will run simultaneously for some period of time until the criteria for the new system are met (Lee & Wiswall 2007).

Recommendations

The following are some recommendations that were suggested for the Transperth Company in order to shifting to the new sustainable strategy:

  • It was suggested that Transperth Company should Sign a contract with solar power providers to be the main suppler of electricity power. This power will be used to operate the Trains and recharge the hybrid engines that are used in buses and ferries.
  • Create customer awareness department. This department will be responsible for frequent measurement of the level of customers’ awareness about different issues such as the importance of using renewable resources. Such issues will be aired to the customers through different kind of advertisement ways.
  • Customise the fingerprint scanner equipments. This will make them suitable for the company activities. For instance, improving the current fingerprint devices by connecting them with the company data base by the 3G or WIMAX networks and also enhancing fingerprint scan speed.
  • Apply Virtualization concepts in the Data centre including the cloud computing is the other recommendation. Virtualization concepts will reduce the number of physical devices that have many different systems running. For example, there will be one physical server with many virtual servers. Moreover, we will have one computer running many operating systems.
  • In order to protect our innovations, the company will apply a policy for registering each new idea or service. This will constitute the company patent rights.

Conclusion

Sustainability strategies are very innovative ways of dealing with the future events. Every organisation has to be ready to deal with these future expected events. In Australia, transportation sector is responsible for huge harmful gases emissions which affect the organisations and the society in many ways. On the other hand, Transperth has made great attempts to save the environment but it still needs to improve the sustainability issues. The suggested strategies will ensure better result in both environmental and business sides. Finally, the sustainable systems and strategies are proving to be the best insurance for better future. We should therefore let our children have a chance to live better lives.

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