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Achieving Value for Money from Improving the Management and Delivery of Innovation in the GB Rail Industry: FINAL REPORT

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Achieving Value for Money from Improving the Management and Delivery of Innovation in the GB Rail Industry: FINAL REPORT Department for Transport Ref:RVFM10003 Rail Value for Money Study: Phase 2b Package 9 – Achieving Value for Money from Improving the Management and Delivery of Innovation in the GB Rail Industry: FINAL REPORT Date: 25th May 2011 FINAL ISSUE 1 Guidance on using this report Report Structure This report is structured into 4 parts: Part 1 – An Executive Summary – which outlines the findings of the Main Report at the highest level. Part 2 – A Summary of Findings – a précis, intended for the majority of users who need to understand the research work that has been conducted, the findings, the critical parts of the rationale underpinning those findings and recommendations. This Part 2 is also intended for use as the principal source of material for preparation of wider reports by the RVfM team. Part 3 – Main Report – this is the Report in full detail and is intended for those who wish to delve deeply into the research work, explore the concepts and approaches advocated and see the various facets of the subject. Innovation Practitioners and those who will take forward the Recommendations and Implementation Plan are likely to be the main users. Appendices – Supporting material not included in Parts 1-3 but which may be referred to if required. New Terms and Definitions Throughout this document a significant number of terms and acronyms are introduced which, whilst new to the rail sector, are commonly used to explain and describe the processes of innovation that are applied in other sectors and which are beginning to be utilised in rail. Indeed these terms, once familiar, are useful to understand the concepts themselves. We are conscious that readers may find it helpful to understand these Explanation of Term terms – as they read the document rather than having to refer back to a glossary. Therefore, embedded within the text are call-out “pull-quotes” This rounded box is which guide the user; these follow the style illustrated here to your right. known as a “pull quote”. Acronyms have been included in Appendix A. Given the focus for the work – improving the management of innovation in GB rail – it is inevitable that new terminology will accompany the acquisition of new thinking, skills and approaches. However, we have tried to balance the needs for clarity and understanding with the need to reference terms and models which are commonly used in the innovation processes of other sectors. 2011 , ht g ri py © Crown co © Crown Rail Value for Money Study – Improving Management & Delivery of Innovation Final Report 5098555-ATK-51-0030-1.7 FINAL ISSUE 2 TABLE OF CONTENTS Guidance on using this report ...............................................................................................1 Report Structure ..................................................................................................................... 1 New Terms and Definitions ....................................................................................................1 Table of Contents ..................................................................................................................................... 2 Part One ................................................................................................................................... 4 1 Executive Summary .........................................................................................................4 Part Two ................................................................................................................................... 5 2 Summary Report ..............................................................................................................5 Achieving Value for Money from Improving the Management and Delivery of Innovation in the GB Rail Industry ............................................................................................................................ 5 2.1 Description of studies and analysis to date ............................................................................ 8 2.2 Evidence base ........................................................................................................................ 9 2.3 Key data for this section of the study ..................................................................................... 9 2.4 Barriers to efficiency ............................................................................................................. 11 2.5 Principal issues ..................................................................................................................... 12 2.6 Recommendations – for Cost Reduction, Increased Efficiency and Increased Revenue .... 20 2.7 Potential for and Timings of Cost Savings ........................................................................... 22 2.8 Implementation Plan ............................................................................................................. 24 2.9 Risk Management ................................................................................................................ 26 Part Three .............................................................................................................................. 29 3 Part Three – Main Report Introduction ........................................................................29 3.1 Overview ............................................................................................................................... 29 3.2 Scope of Work ...................................................................................................................... 29 3.3 Inputs, Assumptions and Dependencies .............................................................................. 29 4 Examination and Analysis of Previous Research ......................................................30 4.1 Safety, Standards and Innovation Study (ADL Report and other input documents) ............ 30 5 Analysis of GB Rail industry innovation system ........................................................36 5.1 Innovation models and frameworks used in analysis ........................................................... 36 5.2 Defining innovation success ................................................................................................. 47 5.3 Defining an Innovation Index ................................................................................................ 55 5.4 Discussion with GB rail industry, other railway administrations and other industries .......... 66 5.5 Examination of comparators from other railways ................................................................. 78 5.6 Examination of comparators from other Industries .............................................................. 87 6 GB Rail Innovation Solution Development ................................................................113 6.1 Implementing a “Rail Innovation & Growth Team” (RIGT) ................................................. 113 6.2 Quantification of Innovation Benefits .................................................................................. 127 6.3 Global growth markets accessible to innovation from GB Rail .......................................... 135 7 GB Rail Innovation Solution Implementation ............................................................146 7.1 Implementation Plan ........................................................................................................... 146 7.2 Funding ............................................................................................................................... 153 7.3 Financial Analysis ............................................................................................................... 161 8 Conclusion and Recommendations ...........................................................................163 9 Document Control .......................................................................................................172 Appendix A: Glossary of Terms, Figures and Tables .....................................................173 List of Figures ....................................................................................................................................... 175 List of Tables ........................................................................................................................................ 177 2011 , ht g ri py © Crown co © Crown Rail Value for Money Study – Improving Management & Delivery of Innovation Final Report 5098555-ATK-51-0030-1.7 FINAL ISSUE 3 Appendix B: Technical Readiness Levels (TRLs) ...........................................................178 Appendix C: The Fraunhofer model ..................................................................................179 Appendix D: Draft Implementation Plan for Industry Innovation Management System183 Appendix E: Innovation System Structures and Dynamic Equilibrium .........................184 Appendix F: Bibliography ..................................................................................................186 Appendix G: Full Version of Benefits Quantification Methodology ...............................189 2011 , ht g ri py © Crown co © Crown Rail Value for Money Study – Improving Management & Delivery of Innovation Final Report 5098555-ATK-51-0030-1.7 FINAL ISSUE 4 Part One 1 Executive Summary We report our findings for the Rail Value for Money team on the evidence, barriers to improvement, and the analysis of the opportunities to achieve cost-efficient value for money
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