Services and technology: Reengineering the railroads

In the service-sector, productivity improvements due to technology investments are difficult to measure and document. Measuring productivity in this sector is problematic and many service-related technology investments have not generated major productivity gains. The railroad industry may be making such an investment. Advanced train control systems (ATCS) and their associated control algorithms have the potential to revolutionize this industry or to become yet another statistic in the low-productivity saga of services. One railroad’s experience with this technology highlights the need to carefully match the technology with the strategic direction of the firm and its services delivery processes and operations.