Wattal, Sunil

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PROFILEInterview with Rahul Jalali on ‘‘Union Pacific Railroad:Transforming a Fortune 200 Company Through DigitalPlatforms’’Sunil WattalAccepted: 27 July 2022 / Published online: 15 August 2022 The Author(s), under exclusive licence to Springer Fachmedien Wiesbaden GmbH 2022BISE: You are at the helm of technology in a company thathas been around since the time of Abraham Lincoln. Whatis your strategic vision on how technology can transformthis business?Jalali: Union Pacific (UP) is a 160-year-old companyfounded by Abraham Lincoln, and has remained a coresupply chain partner for the whole country over theseyears. Technology stacks have been very beneficial as thecompany has gone through various stages of industrial-ization. During the current time, when the world isemerging from a pandemic, many established paradigmsfor doing business have changed. The time is right fortechnology enabled disruption, especially on older domainssuch as railroads. For example, at UP, there is a huge focuson efficiency and modern technology trends. DigitalS. Wattal (&)Fox School of Business, Temple University, Philadelphia,PA 19122, USAe-mail: sunil.wattal@temple.edu123Bus Inf Syst Eng 64(5):593–595 (2022)https://doi.org/10.1007/s12599-022-00771-xplatforms and related concepts such as product thinking,agile mindset, pervasive use of data, Artificial Intelligenceare all coming together to create a service which canimprove efficiency and make a meaningful difference inour customers’ lives.BISE: In your article in Forbes, you mention that ‘‘Plat-forms should be agile and able to connect seamlessly toecosystems, including supply chain partners and cus-tomers.’’ What is the role of technology platforms in thisDigital Transformation journey?Jalali: Our vision is to be a platform-based company wheredata flows horizontally, both across different lines ofbusiness as well as outside the company with suppliers andcustomers. Currently, the company is set on a divisionalmodel defined by various product lines each serving aparticular segment, and the siloed structure makes it hard togrow. Gone are the days when you can call yourself agrowth company if you just stay within your boundariesand not be connected to what is surrounding your industry.For example, as a railroad, we are a point A to point Bcompany – we take stuff between points A and B which areterminals and railroad yards. But for us to be meaningful toour customers, we have to be connected with the ecosystemwell beyond the terminal points so our customers can getvisibility into their supply chain. This is especially bene-ficial as the world is moving towards much shorter esti-mated time of arrival (ETA) and lead times. We need to beable to connect across different domains through digitalAPIs and be integrated with the last mile and with peerindustries through the use of digital platforms. Theseplatforms should be nimble enough to ingest all kinds ofdata from many different processes and produce outputscan be easily consumed in a timeframe that can trulyexemplify agile. In our industry, long lead times have beenthe norm, and therefore going to an agile mindset is goingto be a game changer.BISE: What are some examples of these platforms atUnion Pacific?Jalali: A great example of such a digital platform is ourcore transportation management system which will go ineffect later this year. It is the central nervous system of howthe railroad works and is built on a set of APIs and we havebeen agile in putting it into production and getting piecesof information that can start generating value. The systemis handling about 5.6 billion API calls a day on this plat-form. The platform is designed to connect end to endcustomers. For example, Union Pacific can get into ourcustomers’ forecasting systems to understand demand sowe can prepare our equipment in a much better way. On theback end, we are able to give tremendous amount of dataand visibility to our customers based on how the goods aremoving. This creates an ecosystem connected directly viaAPIs such that machines can directly interface and connectwith each other.BISE: What benefits has the organization seen (or antici-pates) due to digital platforms? How do you plan toquantify these benefits?Jalali: One of the key benefits of these digital platforms isto be able to build a deep analytics engine, which willincrease the efficiency of running railroads as well asenable a strategy of customer centricity. An example ofmetrics for efficiency is how many miles faster the trainsare running. Another key benefit is that the organizationwill be more predictive in meeting demand rather thanreactive, given the immense visibility that digital platformsbring into the ecosystem of customers and suppliers. Thesedigital platforms will be an engine to build a completelydifferent railroad of the future.Talking about benefits, what matters for a railroad in thelong run is whether it can effectively increase revenue ofthe company while running reliable and consistent services.Technology based platforms play a key role in both drivingrevenue, decreasing cost, as well as increasing efficiency.There is tremendous opportunity in the market since rail isthe most ESG friendly mode of transport. The greater theshare of total goods transported by rail, the better it is forthe country. Currently, about 93% of goods are transportedby road in the United States – and if Union Pacific cancommit to high levels of reliability and timeliness, moreand more customers will be comfortable switching to rail.Also, trains cannot provide a door to door service unlikeroad transport; therefore, companies such as Union Pacificneed to demonstrate value by creating an efficient andconnected ecosystem to provide end to end transportsolutions. Digital technologies and platforms will play ahuge role in this.BISE: In transitioning from standalone software to digitalplatforms, how did the requisite skill sets of IT workerschange? What resources did the organization provide forupskilling these employees?Jalali: As technology stack changes, from older to cloud-based modern stacks, it is imperative for companies toupskill their technology as well as non-technology work-force. One of the things that UP is doing is hiring moremid-career professionals with experience in cloud andother digital technologies who can hit the ground running.We have also tied up with companies and local universitiesto create specific courses tailored for current UP employ-ees. Other than technical knowledge, workforce in the eraof digital platforms needs to adopt a growth mindset basedon soft skills such as product management mindset andability to think in terms of agile methodologies.123594 S. Wattal: Interview with Rahul Jalali on..., Bus Inf Syst Eng 64(5):593–595 (2022)BISE: How does the organization balance the openness ofdigital platforms with privacy and security considerations?Jalali: UP recognizes that increased connectivity, espe-cially across companies, leads to an increase in securityconcerns. As more and more business moves to cloud-based platforms, principles such as zero trust architecturefrom a security perspective become paramount. Zero trustarchitecture means that there is authentication at every stepon whether the user requires the information or not.Another security paradigm that the company operates on iscalled micro-segmentation which is to build a very strongperimeter, and even within the perimeter, there is authen-tication as you move from one part to the other. Finally, itis essential for an infrastructure company such as UnionPacific to collaborate with government agencies to keepabreast of security threats on the horizon.BISE: What new technologies on the horizon excite youfor the digital journey of your company? How do existingdigital platforms prepare the organization to integratefuture technologies?Jalali: I am particularly excited about cybersecurity. As a160-year-old company, we deal with technologies that areold, as well as those that are ultra-new and cloud based.One of the technologies we are exploring is cyber mesh,which is about keeping the company safe with these twobookends of old and new technologies. Another trend thatis exciting is the move to cloud-based back office, cloud-based analytics, cloud-based CRM systems. This saves onthe need to expand datacenters, and also be able to use newtoolsets which lead to a great amount of speed to attack areal-world business problem. The company is investing inartificial intelligence, machine learning and deep leaning totake advantage of vast amounts of data created by thesehyperconnected systems. It is essential to build a culture ofdeep analytics and deep leaning so we can run these con-nected platforms in a very efficient ecosystem.Finally, I am excited about the talent at UP – they arethe key to our mission of building transformative digitalplatforms. They have been able to achieve amazing mile-stones in a short time frame and are adept to change inmindset required to operate in this era of digital platforms.We see ourselves positioned to keep the company great,and help in the core mission to build America.BISE: Thank you very much for your time, and for thishighly insightful interview.Springer Nature or its licensor holds exclusive rights to this articleunder a publishing agreement with the author(s) or other rightsh-older(s); author self-archiving of the accepted manuscript version ofthis article is solely governed by the terms of such publishingagreement and applicable law.123S. Wattal: Interview with Rahul Jalali on..., Bus Inf Syst Eng 64(5):593–595 (2022) 595

Interview with Rahul Jalali on ‘‘Union Pacific Railroad: Transforming a Fortune 200 Company Through Digital Platforms’’

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Interview with Rahul Jalali on ‘‘Union Pacific Railroad: Transforming a Fortune 200 Company Through Digital Platforms’’

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