Long and winding railroad – heading for the cloud

On a recent bicycle ride with friends, I was stopped at a railroad crossing waiting for a long freight train. It was an iconic American experience to witness. It allowed me to catch my breath as I counted the 148 railcars, winding their way across the county connecting their freight to the next step on their supply chain journey.

I couldn’t help but marvel at the sheer size of the train powered by two engines. It is no wonder that railroads are the most fuel-efficient way to move freight, able to move a ton of freight nearly 500 miles per gallon of fuel. It would take hundreds of trucks to do the same job.

As the train sped by, I thought of all the people, equipment, maintenance, fuel, and communication that is involved in keeping the railroad system going.

SAP customer Union Pacific Railroad operates across 23 states with 32,124 miles of track, transporting 8 million carloads of freight using 7,500 locomotives across 30,000 rail crossings and 16,700 bridges. 

These huge volumes can’t be managed 24/7 without lots of automation, prediction, and planning to bring together the resources safely and sustainably at speed.

It’s no wonder that technology has long been at the center of Union Pacific success, achieving incredible efficiency that is at the backbone of business operations for all Americans. 

Coupled, integrated, and configured

Standardization has always been the key to operating a massive railroad. Everything must work together seamlessly, completely integrated across the railroad network. When building train networks, rails, loading equipment, stations, routes, and plans, there is always an eye to utmost ease of configurability, using standard couplings that can attach special equipment for special purposes while retaining smooth operation flow.

Business operations and technology are no different. Systems that work seamlessly together, easily configured and with reliability make for safe consistent high-speed business.

The Union Pacific challenge: standardize for speed 

The team at Union Pacific could see the importance of speed beyond the railroad, in business operations innovation and use of artificial intelligence. The company needed to embark on the journey to the cloud with standard systems and selected SAP cloud applications and services for the transformation.

“We’re a legacy company,” said Michelle Clark, AVP, Enterprise Systems at Union Pacific Railroad. “This transformation with SAP lets us modernize our back office to get current and stay competitive. Having one ecosystem for operational data, people data, and financial data supports better business decision-making long term, which adds to shareholder value.”

Digital business transformation: the move to standardization

After over 160 years of North American rail transportation success, Union Pacific needed to transform their business to use digital technology to meet the future needs at speed, shipping with safety, security, sustainability, using efficient operations, and providing an industry-leading customer experience.

Union Pacific had over 100 custom applications. Maintaining them through upgrades and ensuring compatibility with core systems was draining, costing too much time and money.  Every upgrade required long integration and test cycles. This was limiting the ability of Union Pacific to focus on new digital innovations, automation, and business model changes. It was creating silos of data which caused lack of reliable insight.

Union Pacific realized they needed a system that would simplify the application landscape and allow for greater resilience.

Selecting the right tools for the job 

After careful analysis of the current landscape, Union Pacific decided to take their finance, sourcing, internal logistics, human resources, and expense management systems into the SAP cloud, including SAP S/4HANA Cloud, SAP Analytics Cloud, SAP Ariba, SAP SuccessFactors, and SAP Concur.

Partnering with SAP Cloud Success Services, they developed a 3-year implementation roadmap that prioritized value while managing the process and application interdependencies.

Union Pacific is now embracing a “fit to standard” approach which is enabling a holistic perspective never achieved before.

Reliable railroad operations – digitally enabled 

Union Pacific is focused on keeping their core data and applications core clean while converting custom applications to SAP standard processes. By optimizing and standardizing processes and operations, it is easier to take advantage of new innovations constantly being offered with applications. And greater automation opportunities are revealed, so that data-driven decisions can be made with confidence.

Sustainable benefits

It all adds up to more sustainable business operations and a strong partnership between Union Pacific and SAP to help railroad operations run better.

The Union Pacific team noted the benefits of moving to the SAP Cloud included:

• Faster processing, closing activities, approvals, and data integrity
• Increased productivity, reducing manual intervention for data validation with SAP S/4HANA Cloud automation
• Improved controls and safety by moving to the cloud, providing a solid foundation to accept new core functionality and add additional innovations for future transformations
• Easier user access and insights via mobile applications and analytics tools

Union Pacific has since been named a winner in the Travel and Transportation category of the 2023 SAP Innovation Awards, which is celebrating its 10^th anniversary.

To learn more about what Union Pacific accomplished to earn this prestigious award, please see their pitch deck.