Dissecting Alstom’s three-part IT strategy

Alstom builds high-speed trains, subways, monorails, and trams, but also develops turnkey systems, services, infrastructure, signaling, and digital mobility. And with a presence in 70 countries and around 74,000 employees, 3,100 of which are in Spain, the French multinational has important weight in the country, where it introduced a high-speed train, the first automatic metro, the latest generation signaling systems, and the return of the modern tram. To put it in context, one in three trains that circulate in Spain is manufactured by Alstom.

And with four industrial centers, four technology centers, and a foothold in more than 20 maintenance workshops, the company’s technological strategy is pivotal to progress as Pablo Celada, director of technology and systems for Europe at Alstom, reveals.

Alstom promotes the railway as the most sustainable form of mobility through digitization, among other aspects. How is digitization changing the railway world and the company itself?

We try to develop sustainable, durable, accessible, and intelligent transport responses to face the two great challenges of today’s society: the increase in world population and climate change. Our mission is to respond to these and digital transformation can help us.

We started the digital transformation journey in 2015, and since then, we’ve focused on a strategy that was risky at first, but it’s paid off. It basically consisted of focusing on the cloud and mobility solutions for employees. This strategy has provided us with important levers to develop and face challenges such as the pandemic, in addition to allow us to undertake new integrations, such as the one we’re completing with Bombardier Transportation, a purchase we made a couple of years ago, which has allowed us to be the main global player in the railway world.

Can you describe the strategy behind purchasing Bombardier’s railway business for €4.4 billion in 2021?

Bombardier Transportation was the same size as us, and also a global focus. From the beginning, we decided to integrate the processes and systems of the company with our core system. It’s not a project of a couple of years but about three or four. In this first period, we’ve managed to stabilize the company and have integrated 95% of integrated digital processes. In the coming years we’ll continue on the same path.

What are the most emblematic projects you’re immersed in this year at the ICT level?

We aim to give value to data and guarantee its digital continuity, from design conception to the operation process, including maintenance of the products we make.

Right now, in the main projects we have, we use technologies like artificial intelligence, which we’ve been implementing in our service maintenance systems for many years. For example, we integrate predictive maintenance algorithms into our service solutions to reduce the number of times the fleet goes through the workshop, increase the availability of the trains and, above all, ensure that the data captured by the sensors allow us to prepare sooner, before the train arrives at the workshop to know in advance what the failures are, how to act, and, if necessary, to look for new materials. All this increases the availability and service of railway operators and passengers.

Generative AI is very fashionable at the moment. Can it also help you?

We have teams of data scientists and it’s one of the new trends we’re evaluating, but above all, it’s to help promote and update some of the processes we have today—both internally and in regard to the products we sell.

What other disruptive technologies are you involved with? 

Those that ensure the continuity of digital data. We’ve also been using immersive virtual reality and augmented reality technologies for a long time. For example, instead of physically building an expensive model of a train, with virtual reality and the digital data we have, we can analyze the ergonomics of the driver’s position with the operators, and make adjustments without having to go to the production phase. And we use augmented reality in training issues and for remote assistance, which can be provided from different countries.

Recently, we’ve announced the creation of our own space in the metaverse, not only with the idea to ​​give information about our product portfolio but, above all, for training issues, to see exactly how trains work.

Where is Alstom putting the focus of investment in IT?

Our first focus is to continue with the integration of Bombardier Transportation. We want to finish it as quickly as possible and then continue supporting the business and its initiatives. We also want to reduce the energy consumption of our solutions. It’s an important focus and we already have projects regarding this. In addition, we’re working on the evolution of autonomous driving. We’re great connoisseurs of trains, subways, and the different rolling stock at airports, but now we’re promoting more efficient autonomous driving operations.

Will there come a time when trains run without drivers?

Today we already have fully automated metros in Singapore and Madrid. The airport shuttles are too. And as far as the railway network is concerned, there are already several degrees of automation in the trains; in countries like China, they’ve opted for the highest level. Yes, driverless trains are a trend, whether they arrive sooner or later is another issue, but this depends on legal issues, not technical ones.

What are your biggest challenges as CIO?

Attracting talent. But at Alstom, we’re lucky to be recognized as a top employer globally, as well as in Spain, and it’s one of the pillars of our growth. In fact, in Madrid, we have one of the main centers of excellence in software development. The attraction of technological talent is still one of the challenges we have, though. Not only Alstom, but all companies. It’s a main focus for us. In Spain this year, we’ve hired 350 people out of around 3,000 between Spain and Portugal. We’re looking for all kinds of profiles, from data scientists to systems engineers. Other challenges include completing the integration of Bombardier Transportation, and continuing to analyze how new technologies can help make our products more durable and sustainable.

What does the R&D center in Madrid do?

It develops software to improve communication between the train and the ground, software that’s embedded in the trains themselves, and digital mobility systems that facilitate the frequency of the metro or tram, in that there are systems that will control the traffic lights of the line where they are.

Cybersecurity is also essential in the railway ecosystem, isn’t it?

Yes, many of our customers and operators have critical infrastructures, so cybersecurity is one of our biggest concerns. Currently, around 500 people work in cybersecurity within Alstom, not just in security of products but also internally. Our motto is ‘security by design.’ In our operational and production processes, security plays an important role in the design, implementation, and validation phase.

How do you think Alstom is positioned in terms of digital transformation compared to its competition?

We’ve been lucky to start the journey very early. In 2015 we had to set up our IT systems almost from scratch, and there we adopted a more disruptive strategy than traditional companies in the sector, much more focused on the cloud, mobility, and data. Currently, 70% of our solutions work in the cloud, our workloads are cloud ready, and we can use our solutions with any type of device anywhere in digital continuity. We are certainly a data driven company.

The fact of going much more to the cloud and having a fairly standard core system will allow us to work in the same way in Spain as in France, or in any other country, and it allows us to integrate Bombardier Transportation or any other company faster and more efficiently.

Is Alstom’s core business in the cloud?

We have a data center in France but everything else is in the cloud; our main cloud provider is Microsoft Azure. Before, going to the cloud was a riskier step, but if you have a cybersecurity and access strategy based on identity control and data, you get good results.

And what about the hidden costs of the cloud that many CIOs have issue with?

You have to do a business case of any project every three or four years, evaluate it and follow it up. It’s the same in cloud projects, and that’s what we do. For now, we want to continue taking advantage of the technological benefits of the cloud through our partners. 

What other partners do you work with in IT?

In 2015 we decided to work with a very small number of IT partners. One is Microsoft, but we’re also supported by the consulting firm DXC Technology, whose team, by the way, manages our cloud. In the telecommunications area, our global partner is British Telecom, in the ERP and finance part, we work with Accenture, and we have another global partner for support.

Technology companies have the same problems we do in capturing talent. They also face others like SLA controls, costs, and those related to the relationship with the client, and knowledge. But our partners are companies we’ve worked with for many years and have created a strong relationship of knowledge and trust.