Appendix 10: Output of Risk Workshop

1.6

Scotland may be a trail blazer for a complex project with new technology and a new ticket product – will be watched closely by DfT.

3

3

9

Consider strategy carefully to avoid becoming first mover without clear support.

3.3

ITSO does not deliver a workable standard to enable the intended ticket product.

3

3

9

Define the ticket product desired and test with latest ITSO plans. Consider an alternative solution, for example Oyster could provide a t-purse but would need a single ticketing authority to define how it was used and the business rules, similar to how TLS has operated in the Netherlands

4.3

Preferred option cannot be delivered within envelope of available funding.

3

3

9

 Consider less functionally rich options

5.2

The existing equipment becomes obsolete during the implementation process for Smart & Integrated ticketing.

3

3

9

 Build in funding for upgrade of equipment. Test ability of existing equipment to support planned ticket product

6.1

Operators do not wish to cooperate with integrated ticketing - they perceive a weak commercial position for their business.

3

3

9

Build a robust economic case that identifies all benefits and can be articulated to operators.

6.6

Competition Commission review yet to be published and it may impact the structure of the bus industry in Scotland.

3

3

9

Assess outcome of Competition Commission review to understand impact on the shape of the market.

2.1

Transport Scotland and its delivery partners cannot muster the resources to deliver the programme.

2

3

6

 Early planning and sourcing of skills and resources.

2.3

Risk that workstreams cannot be coordinated together – budget, milestones etc – to deliver efficiently.

2

3

6

 Put in place effective programme management.

3.2

The ticketing product needs to be downgraded late in the design process to overcome technical difficulties.

2

3

6

Early planning and testing of the ticket product on readers and with business rules

3.4

Proposed solutions do not work with readers already installed on buses.

2

3

6

 Early testing of the readers with prototypes of the intended ticket products

3.5

Solution cannot be future-proofed adequately and does not contribute positively to the long-term vision as a result.

2

3

6

 Map out a long term technical evolution path and validate the path annually

3.6

Risk that ticketing products may not be technically interoperable

2

3

6

 Complete the design of the products early

3.9

Risk that RTP’s may adopt different regional strategies – fragmentation possible through regional approaches that are not compatible/interoperable. Interoperability needs to be built into the intended product to achieve the objectives of integrated ticketing

3

2

6

 Adopt a national strategy building on a regional pilot

4.2

Public sector subsidy required for infrastructure is beyond a level the public sector is comfortable with.

2

3

6

Early discussions to understand likely funding sources and availability.

4.4

Suppliers are unable to deliver within the terms of their contract, causing delays to delivery timetable.

2

3

6

Robust procurement process and subsequent contract management.

6.2

The preferred option does not deliver the expected benefits to operators, thereby weakening the commercial case for their involvement.

3

2

6

Conduct a programme of operator consultations to better understand motivations and concerns and also plans for Smart ticketing.

6.3

Operators lose market share and hence revenue as a result of greater opportunities for customers to switch between operators.

2

3

6

 Engage with operators early on the potential reduction in revenue and consider the need for a subsidy and how that might be funded

6.5

Subsidies to bus operators need to increase to maintain services.

2

3

6

 Assess the potential scale of subsidies needed and consider whether an integrated ticket could be charged at a premium

6.7

Risk that current bus regulatory arrangements are sub-optimal

2

3

6

 Review the emerging findings from the Competition Commission due in draft in Oct 2010 and consider how this affects the Scottish bus industry.

6.9

Operators may take their own approach to ticketing strategy, thereby undermining the wider approach to Smart & Integrated ticketing.

3

2

6

 Introduce as early as possible guidelines and a framework for convergence on compatible and interoperable ticketing products and systems

8.3

Changes are required regulatory / statutory requirements / provisions to make the Preferred Option possible

2

3

6

Robust procurement process and subsequent contract management

9.6

Procurement process yet to be determined – must allow adequate due diligence on the ticketing solution and its fit with the wider strategy.

2

3

6

 Design potential procurement process for systems. Collaborate with DfT on planned framework procurements referred to in DfT Strategy published in Dec 2009

10.3

Passengers do not take up the new ticket in the required numbers to make the commercial case work

2

3

6

 Early modelling of propensity to take up the new ticket considering fares and fare structure

13.5

Benefit dependent on take-up by customers – risk that we cannot estimate take-up effectively and that take-up assumptions dominate the Benefit: Cost Ratio

2

3

6

 Early modelling of propensity to take up the new ticket considering fares and fare structure

1.1

Leadership and policy changes during the procurement and implementation phases.

2

2

4

Ensure Ministers are fully briefed on challenges throughout in order to manage expectations of what is deliverable

1.2

The preferred option does not meet evolving political aspirations.

2

2

4

Ensure Ministers are briefed on the planned strategy 

1.5

Political leadership does not understand the challenges for Smart & Integrated ticketing and results in poor decision-making.

2

2

4

 Prepare briefing document on the key challenges and present to Ministers

2.2

The related vision of travel information to the customer is not delivered and does not deliver modal shift

2

2

4

 Develop a plan to implement the travel information elements of the strategy and embed it within the programme.

3.8

Risk of non-compliance with FSA regulations re stored financial balances above a threshold

2

2

4

Research FSA regulations around stored financial balance (maybe a need for an ATOC-like role re FSA in back office).

4.1

Fares for integrated smartcards need to be reduced/ subsidised to achieve required levels of take-up.

2

2

4

Detailed analysis of passenger demand to establish relationship between fares and take-up.

5.1

The existing investment in Concessionary Fares Smartcards cannot be leveraged for Smart & Integrated ticketing.

2

2

4

Testing on existing equipment to establish suitability for commercial use and likely lifespan to replacement.

6.4

Fares increase required for the passenger in order to maintain operators’ margin.

2

2

4

 There may be no mitigation as an integrated ticket may command a premium. The size of the premium needs to be modelled early.

6.8

Commercial issues re value for money, contracting, IPR

2

2

4

 Consult early with the operators on the intended design of the ticketing specification

7.1

Franchise ends in 2014 – current operator is not motivated to contribute positively to Smart & Integrated ticketing.

2

2

4

Early scoping of the requirements of the franchisee and mechanisms that can be used to ensure full cooperation.

7.3

Network Rail may not carry out upgrades for the stations they operate within required timescale.

2

2

4

Early engagement with Network Rail around the feasibility of the programme and timing of their work.

7.4

Scotrail pilot – New reader hardware due in March 2011 from Cubic. SW upgrade in May 2010. Decision yet to be taken whether to go ahead

2

2

4

 Monitor upgrade plans regularly

7.5

May prove difficult to impose a strategy on the franchise operator:

2

2

4

 Build in options to franchise tender process for the bidders to price. Consider adopting a negotiated procedure.

7.6

Lack of powers to mandate change

2

2

4

 Consider building in commercial mechanisms into the franchise terms that allow changes to the ticketing approach to be directed by SG

7.7

Difficult to put in place an agreement that can be re-negotiated based on certain conditions being met

2

2

4

 Put in place a change control process which draws on ticketing price benchmarks for good value to maintain value for money under contract change

8.2

Issues related to transfer or ownership of assets are encountered

2

2

4

Engagement of legal advice early in the procurement phase to identify and deal with other potential constraints

8.4

Delivery Partners fail to comply with relevant laws / regulations, causing public sector partners to be in breach of laws or regulations

2

2

4

 Identify early potential legal issues

8.5

Insufficient time to change the law re competition

2

2

4

Take advantage of DfT's work to clarify block exemption on ticketing

9.2

The baseline requirement / specification for the Preferred Option is unacceptable to suppliers

2

2

4

Soft market testing prior to formal procurement process to establish market appetite

10.1

Passengers do not perceive value in the benefits that are expected to accrue to them

2

2

4

Gather input from passenger groups to understand passenger issues and motivations

10.5

Privacy risk – customers concerned about being tracked – may load customer channels with queries

2

2

4

 Review precedent established for other ticketing schemes on privacy and adopt best practices

10.6

Value on a card very important – system needs to work – if it does not work likely to affect takeup and customer confidence.

2

2

4

 Test the system thoroughly before launch. Design the ticketing product early and test key transaction processes.

12.1

Modal shift does not occur as anticipated

2

2

4

As above – this issue relates primarily to achieving appropriate levels of take-up

13.1

Anticipated benefits are not real or have been double-counted.

2

2

4

Detailed research required to test the robustness of the assumptions underpinning the benefits.

13.2

Benefits cannot be accurately quantified in a Scottish context.

2

2

4

Detailed data on volumes required to be able to quantify benefits accurately by geographical area.

13.3

Benefits need to be measured as a whole in terms of economic benefit to Scotland not just SG – risk that we cannot measure the whole benefit.

2

2

4

 Review Green Book guidelines on how to consider national benefit vs. benefit to SG and seek potential measurement indicators

13.4

Benefit baseline may be needed – risk that we cannot set a baseline accurately

2

2

4

 Using indicators established re risk 13.3, seek measurements

13.6

Different fares policy may deliver the same benefits as Smart & Integrated ticketing

2

2

4

 Once the order of magnitude for the potential benefit of smart and integrated is understood, compare that with other potential changes to fare and ticketing and model options

1.3

The preferred option cannot be delivered in time to meet 2014 aspirations.

3

1

3

1.4

Risk that the preferred option is regarded as Glasgow-centric and not serving all of Scotland.

3

1

3

3.1

The ticketing product does not work.

1

3

3

9.1

Unrealistic processes and milestones are developed

1

3

3

9.3

Procurements fail to recognise business critical factors

1

3

3

9.4

Robust contracts are not drawn up to underpin all aspects of the project

1

3

3

9.5

There is insufficient expertise to conduct the procurement in accordance with regulatory and policy framework

1

3

3

10.4

Need for a new retail/front office network – not in place now

3

1

3

3.7

Ferries not equipped – simple process and infrastructure

2

1

2

7.2

Assets/services/contracts/tickets are not handed over from existing franchisee to new franchisee, particularly for fares, front and back office – mechanism in place to transfer assets so not a big risk

1

2

2

8.1

Legal constraints (e.g. procurement, data protection) prevent or delay project implementation

1

2

2

10.7

Who owns the customer? LA vs. operator. LA issues the NEC

1

2

2

10.8

What is the role of a Citizen card? Access to services.

1

2

2

11.1

Perceived complexity of smart & integrated ticketing leads some passengers to revert to car use

1

2

2

10.2

Bus passenger numbers in Scotland are falling – preferred option may not reverse the trend

1

1

1