The railroads’ resource
We’ve all waited (somewhat) patiently in our cars as a long train cuts across the road. And if you were observant during those rail crossing stops, you would have noticed that many of the railcars going by are yellow, with TTX in red letters.
But did you ever consider the complex supply chain operations behind those railcars? How do you get the right type of railcar in place at the right time to carry anything from cars to lumber to gravel bound for multiple destinations? That’s where “railcar pooling,” and TTX, comes in. TTX is a company owned by North America’s leading railroads that makes this crucial part of the supply chain far more efficient.
TTX owns a fleet of 168,000 railcars—including flatcars, auto carriers, boxcars, and open-top railcars—that is operated as a pool shared by the railroads. This pool gives them flexibility to quickly adapt to market demands and cuts down on the waste of returning empty railcars. The approach saves railroads money and reduces carbon emissions by eliminating wasted, empty railcar trips.
“Railroads own a certain amount of track going from location A to B,” explains Vicki Dudley, TTX CFO and treasurer, during a recent Oracle Live virtual event focused on cloud applications. “If they’re not operating in a pool, when a railcar gets to the end of point B, and they don’t have another load to pick up, they have to haul it back empty. Within a pool, they can interchange with other railroads.”
While TTX is privately owned, most of the railroads that own it are public companies, so TTX’s financial reporting needs to be compliant with Sarbanes-Oxley requirements. But the company was running its financials on a heavily customized, on-premises SAP ERP system, custom coded applications, and software as a service for a number of different functions, which resulted in a lot of manual effort, says TTX CIO Bruce Schinelli. This patchwork of systems was supporting critical business processes, and it made adapting to change or even keeping up with technology advancements nearly impossible.
As TTX considered alternatives, the team created a rigorous scoring criteria to evaluate various options across HCM, supply chain, and ERP, with a goal of moving to a solution that was mobile device friendly, modern, well-supported, and on a single platform.
“The Oracle solution proved to be the most complete, modern suite of enterprise applications on a common platform,” Schinelli says. “It allows us to concentrate on our business and not on the technology that supports it. That’s what we were looking for.”
On board for cloud
“Big kudos to the team members, who were working with a new system and a new work environment and were able to close the year out without missing a beat or causing any operational challenges,” Dudley says. “The fact that we were working from home didn’t hurt our ability to rise to the challenge of 2020.”
In terms of the business cycle, 2020 had two distinct parts for TTX. In the first half, the company saw a big drop in railcar usage—not surprising, given how closely tied rail use is to economy activity—and the company was able to quickly recognize that and work to control costs, she says. In the second half of that year, usage picked up to the point where TTX met its financial plan by the end of 2020.
Now, with a lot of experience on the new systems, the TTX team sees their work as more of an end-to-end process rather than as isolated tasks—and that’s helped to break down silos in the company.
“We consolidated 14 different systems onto one integrated platform,” Schinelli says. “We were also able to streamline SKUs from 2,600 to 740. The new solution gives us the data and analytics to better control inventory and reduce costs.”
That integration improves visibility across business systems, which in turn spotlights opportunities to control expenses. “Our railroad owners count on us to be as efficient as we can, and pass along the savings to them and their customers,” Schinelli says.
Continual system upgrades
The cadence of quarterly updates to the cloud applications that Oracle provides has also been a big change. TTX can fully adopt and utilize the newest and latest technology Oracle delivers and, as the technology evolves, so does TTX. With Oracle Integration connecting the TTX SaaS and on-premises systems, the company can tap new innovations that provide savings and benefits for their owners.
“We put together a process to evaluate and test new features,” Dudley says. “When we were on-premises, every change was a huge project and because of that, the software really hadn’t evolved for many, many years. We’re now seeing that we can continually improve and evolve our business processes so we can be best in class where it provides savings or benefits for our owners.”
The company further improved reporting and decision-making with Oracle Analytics Cloud and Autonomous Data Warehouse, which reduced the manual effort to integrate on-premises data with Oracle Fusion Cloud Applications data.
The days are over when a company could get away with creating a highly customized software system and running it for years without updates, Schinelli says.
“Frequent updates and improvements ensure a constantly improving business process, as well as safety and security,” he says. “The likelihood that we're going to create some kind of system that provides business processes that are better than anything that everybody else is doing is vanishingly small. The best thing to do is find the right partner to drive you toward industry standards.”
Advice for cloud migration
Oracle has been a good partner in TTX’s transformation, Schinelli and Dudley agree. Plus, TTX is helping shape the future direction of Oracle Cloud services, with company representatives participating in the Oracle strategy councils for finance, SCM, HCM, EPM, and analytics.
“We're taking advantage of any opportunity that we can to engage with Oracle, give feedback, and express our opinion on some of the future features that might come out,” Dudley says. “I think we’ve laid a great foundation with the software, and the relationship will continue to evolve as we try to reach our goal of being more efficient and cost effective. In my opinion, the best is yet to come.”
For those just starting a journey to the cloud, Dudley offers a few lessons learned:
Prepare for the unexpected. TTX never would have predicted it would have to go completely remote shortly after going live on cloud applications due to a pandemic, but that’s what happened.
Provide ample backup for critical people. The staff time required for the selection process, configuration, and testing came in addition to everyone’s day-to-day jobs. “Their commitment to this project has been outstanding and really is the reason for our success, along with the support we received from Oracle,” Dudley says. “But if I had to do it over again, we probably would have done a little bit of backfill.”
Choose the right approach. Deciding whether a big bang or a phased approach is right for your company is important. “We chose a big bang, which perhaps let us rip the Band-Aid off earlier,” she says. “But you can’t really be successful with that approach unless you have the support of your senior management team and the project leadership, because it does take a lot of effort.”
Do not customize. “Some of the struggles that we’ve had have been because we’ve either over-configured or attempted to do things the way we used to do them,” Dudley says.
Focus on training and change management. This is one area that can’t be underestimated, she says. In fact, TTX continues running training classes.
TTX chose implementation partner Cognizant to ensure a seamless transition.
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