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All insights •How can procurement support digitalisation of air ...

How can procurement support digitalisation of air traffic management?

Published 02.03.23

5 mins read

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Egis has worked closely with many air navigation service providers (ANSP), worldwide, to support the procurement of new air traffic management (ATM) systems. As in the rest of our societies, these new systems are more and more oriented towards digitalisation and new technologies, such as virtualisation, provision/use of data services, artificial intelligence, or Remote Tower. In this blog, Carole Dupré explains why digitalisation could be seen as a challenge in ATM and provides some practical advice on how to organise your procurement practice to support digitalisation.

ATM towards digitalisation.

The digital transformation taking place today is revolutionising customer expectations across society. Customers want more and more immediacy, simplicity, and quality of service in a volatile and changing world. The emerging trend is increasingly towards the use of services rather than ownership. However, the outline of this transformation is rather blurred: there are new technologies, but their use remains to be defined (e.g. artificial intelligence automation). And there are also “dreamed evolutions” that do not exist yet (concepts in place, but with no sufficiently advanced prototype for instance – eg. ATM Data Service Providers or cross-border dynamic sectorisation).

On the other hand, the ATM world is well-known for its ‘slow’ evolution. Its systems have a very long life-cycle due to their complexity/specificity and to high expectations in terms of air traffic safety and security, and also due to limited competition in the system supplier market, which can also lead to limited innovation. If ATM operators today seek new forms of procurement, with more Commercial-Off-The-Shelf (COTS) solutions rather than bespoke systems, it typically takes them five to ten years from the point of system procurement until commissioning of the new system.

Digitalisation adds another layer of complexity. When ATM meets digitalisation, even if ATM wants to take advantage of the digitalisation opportunities, two main problems arise in procurement:

Some of the turnkey solutions that aviation is looking for, such as Virtual Centre or SWIM, do not yet exist;
And for other types of digitalisation (Remote Tower for instance), the ATM world may lack experience, at least on application in specific contexts.

When you can’t see an advanced prototype for a product, or when technologies are very innovative, in a complex and highly secured domain as ATM, the buying act is very complex for ANSPs, as can be the planning of a purchase and the writing of a procurement specification. This leads some ANSPs to get involved at the research phases of digital concepts (i.e., SESAR) as part of their long-term goal to procure a digital solution.

So, how could you set up an efficient and successful procurement process for a new system to be commissioned in 5 to 10 years, for which:

you don’t know precisely the scope, use, and/or technology currently
but you know for sure that those will change within the same time interval?

State your strategy and objectives.

Usually, in ATM, when you think about digitalisation solutions, you think about concepts such as Virtual Centre, Digital or Remote Towers, using or providing ATM Data Services and/or SWIM services. But as soon as those concepts are on the table, for an ANSP, it is no longer simply a question of purchasing a system. Adopting those digitalized concepts also means an important change at every level in the company (operational, technical, business, etc) and long programs that will require strong support from supplier(s). What’s more, because those concepts are so recent, some aspects may be not fully defined, such as regulation (for ATCO/ANSP certification for example, or legal issues) or safety ones.

For instance, becoming an ATM Data Service Provider (ADSP) or using services provided by an ADSP is a major paradigm shift. You not only need to buy the hardware to provide or access the services, you also have to change the operational/technical working methods, review your compliance process to adapt to it and be sure you are legally capable of selling a service to others. And, you will need to have a business case analysis including a market analysis to assess the commercial implications.

So to begin with, you will need a strategic analysis phase prior to procurement, to evaluate what could be possible and interesting for you, looking at every topic (regulatory, legal, technical, operational, business, etc). In this feasibility phase, it is important to put all the stakeholders (or at least their representatives) around the table: buyers, managers, technical and operational experts, NSA, legal department, etc.

They will have to work together to define what you need and could expect in the end from the supplier(s), at a system level but also on support services before the project is commissioned. We hear too often that a project has become very complex after the procurement phase because one aspect, such as safety or legal constraints, was not considered from the beginning. Among the various topics that can be linked to legal issues are the contractual conditions (partnership, joint venture, contract with a ANSP consortium or on your own), which should be clearly stated on your side. Indeed, this could change many things in the preparation of the procurement as you may not address it to the same type of suppliers and may have to adapt some part of your requirements based on this information.

This feasibility phase will also support the change management activities that the new system will create in your organisation. And it is key for the definition of what is important or not for you as future customers of a future procurement. What shall be mandatory for you in the requirements, what could be optional and what can stay open to be defined in the future phases with the selected supplier(s). Indeed, the ‘fuzzy’ edges of the procurement mean that you can enter into a sort of partnership with supplier(s) to help with system requirement definition for instance. This enables you to give guidance on the major and mandatory steps but not define all the details at procurement level.

Adapt to the characteristics of digitalisation.

As digital technology evolves very quickly, you may want to be able to explore the solutions with selected supplier(s), or benefit from the possible technological progress in a shorter timeframe, perhaps within two to four years. You will also have to manage the uncertainty about the paradigm shift this procurement implies for your overall organisation, how to adapt to this new digital system and how it will be integrated with your existing systems.

That's why it's advisable to establish an exploratory phase with the selected supplier(s), where you can look more deeply into the choice of technology as well as your service provision strategy. This challenging transition will definitively need a suitable partner to guide you. And sometimes, this partner might come from outside the industry since you could be trying to import new techniques well-established elsewhere. Finding the right partner is a subtle and difficult balance to achieve when you also must control costs and the timing of the project. They need to provide you with the right results in the end, but also to support you with the answers to your fundamental questions to make it work during this exploratory phase.

If possible, you should establish a framework contract (or equivalent) with the selected supplier(s). In this way, you can order additional optional parts according to your needs and requirements. This will also help to ensure that you set up with the supplier(s) a process that suits you.

As part of your procurement process, you can also request the selected supplier(s) to run several workshops with you and the other stakeholders to define what could be possible on a given topic (technology, HMIs etc) and validate the details later, after the contract signature. It’s also an idea to keep the possibility for you to order additional workshops during the project if new technology or another hot topic is identified.

You can also challenge the tenderers on new methodologies such as Agile methods to manage all or part of the project. Even though Agile methods came mainly from the world of software development, they are increasingly used within scaled frameworks to manage important programs or even companies. And they have the advantage of emphasising collaboration with the client, rapid delivery of quality results, and iterative and incremental work cycles that can adapt well to any changes in needs or objectives.

Finally, to conduct an initial evaluation of the capability of a tenderer to provide you with the expected support you may need, you can ask for proposals on specific points to evaluate the supplier(s) capacity and ability to propose something pertinent to your context (open requirements for example, or an exercise supporting the evaluation of offers).

Keep the procurement sufficiently open.

The objective of a procurement is always for the customer to get what he wants in the end, but also to get it from the most relevant supplier(s). To find these supplier(s), you will have to be cautious when writing your procurement, in order to keep it sufficiently open. Easy to say perhaps, but in practice, what are the pitfalls and how to avoid them?

If your procurement is too restrictive or too demanding (e.g., on technical requirements, expected services or references), you risk eliminating potential suppliers who might be of interest. This also means that there may be no innovative proposal from the manufacturers who are in the best position to know what could be possible according to your constraints.

For instance, when writing too closed/specific technical requirements, you may exclude some usual solutions, such as KVM, to ensure data exchange between technical and operational rooms. Also typically, for SWIM solutions, you don't want to restrict yourself or introduce bias into the procurement when the experts today are on the supplier side. You must accept that suppliers know more about the technical solution than you.

You may also need to prioritise the import of standard solutions from wider industry and avoid wherever possible customisation, to reduce cost and open the market to innovation from other suppliers by avoiding suiting the perception that ATM is special.

You may also want to be able to define various service parameters and state what level of assistance you will expect from the selected supplier(s) (for instance, on integration, or support, or delegation of activities) based on their offers. It is important in that case to formulate requirements that can be optional or sufficiently open, to allow all potential suppliers to propose something that you may order if it appeals.

And in the end….

Today, in ATM and the associated digitalised concepts, there are unclear boundaries, and long lead times. When writing a procurement specification in this context, you need to find the right balance between:

Knowing what you expect from this digitalisation shift and from the associated procurement (what is essential for you as a customer and where are the tricky aspects on which you may need support?)
The need for an exploratory phase that takes place over time, with advice and guidance on the choices to be made from a system/technology point of view, but also on the overall change to come in your organisation
And the existential need to control the program, in terms of planning, costs, etc.

Launching a procurement with digitalisation remains a complex exercise that requires time and expertise to define and can sometimes benefit from external support. But even once the contract is awarded, you will need to be prepared to reassess periodically your strategic objectives, hypothesis and ways of working.

Digitalisation is a new world for ATM, which is being discovered little by little. It is full of promises but also of uncertainties and surprises. If ATM does not want to miss out on the shift to digitalisation, we need to leave room for creativity and innovation in future procurements and also be prepared to change. So that, in this digital world, everyone benefits: the customer with satisfactory results without wasting "unnecessary" money, and the industry to be able to offer the most relevant proposal.

How can procurement support digitalisation of air traffic management?

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