Raul Toomsalu: we implement technologies when they are cheaper and more efficient

Chairman of the Operail Board, Raul Toomsalu, says that in terms of digitisation, the Estonian railway sector is still largely operating in the Stone Age. At the same time, he believes that there is no point in digitisation for the sake of digitisation, and it is important to schedule the acquisition and introduction of new technologies in such a manner that the technology would be more efficient and at the same time cheaper.

How do you understand digitisation in your company?

For me, it means that all the data that we have moving about is collected and saved in a digital format so that the data can be checked repeatedly. At the same time, it also important for the information flow to be verifiable and based on facts, not guesswork—it must come from a machine or program specifically designed for that purpose.

What experiences has Operail had with digitisation?

It must be said that we are still largely operating in the Stone Age, and in fact this applies more broadly to the entire Estonian railway sector. We are a fine example of how things should not be. Besides the electronic reports issued when weighing wagons, we do not have much to show other than pen and paper.

But what would be the key to successful digitisation in this case?

The top priority would of course be finding the right product. Here I mean finding the most suitable solution that meets your needs. There is no need to digitise for the sake of digitisation; rather, it should give a competitive advantage so as to help mitigate and eliminate today’s risks in the future. For example, in our case, it should limit paperwork so that we can use our energy more sensibly.

In any event, digitisation is primarily about business, but it is also applicable for safety purposes. The key to success cannot be that you open Google, type in digitisation and then make your decision based on the first advert, hoping that it will solve all your problems.

To what extent does Operail use the opportunities provided by artificial intelligence, robotics and automation?

We have big dreams, but these are limited by our current financial resources. Our financial results show a profit of almost 10 million euros, but in reality, this is not an exceptionally large amount in the wagon repair and freight business.

But there certainly are some ideas. For example, as part of one project, the tenderer offered to build us a self-learning system that would support train driving. There are plenty of opportunities to use artificial intelligence and robotics in the freight sector, but at the moment, these are often too expensive. However, in the future it is anticipated that these solutions will become cheaper, similar to what happened with DNA testing: 20 years ago, it cost 100 million dollars, now a test costs only 100 dollars.

What role could artificial intelligence, robotics and automation play in your industry?

Robotics would definitely be implemented in wagon rental. The process itself would be that the wagon arrives for repairs, and the wheels and frame constituting the replaceable parts of the wagon are automatically removed. This is followed by an inspection, on the basis of which decisions can be made whether to replace or repair them or not. At the moment, this is done by people, but the inspection can also be done by a robot. And I don’t mean a robot as in a humanoid with arms, legs and head, but simply a machine. A machine that measures thicknesses and decides what needs to be repaired and what doesn’t. Similar machines exist, but presently this technology is still a bit too expensive and slow.

What is the role of a specialist in successful digitisation projects?

From the perspective of our core activities, we have experienced specialists, but our investment and management capabilities have been unsettled. As a result, we have not managed to modernise to the necessary extent. It seems as though everything is there, but when you move around in the world, you begin to understand that we do not have this level of expertise yet and it must therefore be obtained. At the same time, it is difficult to bring in experts as it is not possible to predict the management culture in a situation where it is unclear whether the management and supervisory boards would continue or not. During my time in office, the supervisory board has changed four times, and each time the membership starts from scratch—some want to invest, some don’t.

Do you have these types of people in the organisation?

We have prepared the ground and recruited the relevant specialists who are open and analytically minded. We have also looked within the company for young people with good basic knowledge to develop and expand their horizons and thereafter the goal would be to use headhunting tactics to find them a strong team leader. Naturally, the team has the opportunity to discuss amongst themselves who their leader would be. So on the one hand, it is good that the team is still developing, but on the other, we are busy looking for an experienced manager.

What sort of competences would specialists need for successful digitisation in the future?

I think that here at Operail we have a specific need for an innovative, open-minded person with relatively strong administrative skills and a drive to achieve. They have to be an involved and active leader. Based on the person we find, we will build the team around them. Every individual’s strengths and weaknesses must be taken into account, and then we will see how to boost the team. For example, if someone doesn’t have sufficiently strong IT skills, we will need to find ways to offer these internally. We must ourselves also offer added value for people.

Source: KPMG magazine for decision makers Foorum 2019