Value-based Decision Making and Investment Optimization in Transit

Value-based Decision Making and Investment Optimization in Transit Image credit: TAM America

TAM America had the privilege of conducting an interview with Connor Cox, Global Industry Lead for Transportation, Copperleaf, and is pleased to share his insights on how value-based decision making can help transit agencies balance longer-term strategic goals with day-to-day operations, while addressing the state of good repair backlog.

Please tell us about your role at Copperleaf Technologies Inc. (Copperleaf).

Of course! As the Global Industry Lead for Transportation at Copperleaf, I work with clients across the transportation sector, with a major focus on transit, rail, and roadways agencies. 

For over twenty years, critical infrastructure organizations across the globe have relied on Copperleaf’s solutions to transform their Asset Investment Planning (AIP) processes. My role is focused on helping transportation agencies apply the concept of value-based decision making to develop optimal capital plans and long-term asset strategies, so they can proactively manage risk, meet performance targets, and maximize value.

What are some of the challenges the transit industry faces today with respect to managing critical infrastructure and asset-intensive capital planning? How does Copperleaf help overcome these challenges?

There are a multitude of factors involved in keeping transit systems well-maintained, which can make choosing what to repair or upgrade challenging. And we’re seeing there is definitely room for improvement.

For example, the American Society of Civil Engineers (ASCE) 2021 report gave the public transit system a grade of D-, noting that over a 10-year period, almost 20% of the country’s transit vehicles and 6% of fixed guideway elements like tracks and tunnels were in poor condition. Estimates of the current backlog in maintenance and repair spending across the transit system vary by source, but all exceed $100 billion, with the ASCE estimating this deficit will grow to more than $270 billion through 2029.

Upgrading and replacing aging infrastructure, expanding service, delivering on performance targets, and meeting customer expectations are all imperative to deliver value today and into the future. The challenge is balancing all these competing objectives when there aren’t enough resources (money, people, time, etc.) to do everything.

Copperleaf’s Decision Analytics Solutions help transit agencies decide when and where to allocate their  limited resources to ensure day-to-day spending decisions are aligned with long-term strategic objectives. By comparing projects on common parameters such as cost, risk, safety, resilience, capacity, and equity, we empower agencies to make the highest-value investment decisions.

This is one of the key reasons why Houston METRO selected Copperleaf®. The organization wanted to evaluate all projects on equal footing, incorporate all drivers of project value, and create plans that consider funding and staffing resource limitations. Today, the Copperleaf solution is enabling METRO to establish a more consistent, data-driven process to assess and prioritize investments in the State of Good Repair (SGR) backlog by adopting best practices in modeling, risk assessment, and project valuation. 

What is value-based decision making? How can it help transit agencies improve planning and prioritize investments to achieve objectives such as state of good repair, service reliability, safety, equity, sustainability, and climate resiliency?

Value-based decision making is an approach to Asset Investment Planning (AIP) that takes into account more than just financial considerations. By including risk mitigation, financial and non-financial benefits, key performance indicators (KPIs), and service level targets, we help organizations understand and assess the value that each investment contributes, so they can make trade-offs between diverse asset types and projects—and be confident they’re prioritizing the right things. The Copperleaf Value Framework provides a comprehensive way to quantify the benefits of all investments on a common economic scale and align investment decisions with strategic objectives.

As transit agencies worldwide are setting long-term strategies related to safety, environmental impact, accessibility, mobility, reliability, equity, and other objectives, they’re turning to Copperleaf’s capabilities around value-based decision making to strike a careful balance between achieving their longer-term strategic goals and managing their day-to-day operations—including maintaining and improving existing infrastructure, expanding capacity, and delivering efficient, reliable services.

Copenhagen Metro implemented Copperleaf to transition from siloed, Excel-based planning to a streamlined, value-based approach. They are now able to create plans that incorporate strategic focus areas beyond just financial criteria, including customer satisfaction, sustainability, and capacity.

How has the transit asset management (TAM) landscape evolved with new requirements? How does this impact transit agencies using legacy tools (e.g., Excel spreadsheets, in-house software)?

The Federal Transit Administration (FTA) implemented a Transit Asset Management (TAM) Program to support transit agencies in tackling the growing maintenance and repair backlog as well as achieving and maintaining SGR for all assets. In the TAM Final Rule published in 2016, the FTA required all publicly funded transit agencies to have a fully compliant transit asset management plan in place to help prioritize funding based on asset condition and performance.

The TAM plan must include “a description of analytical processes or decision-support tools used to estimate and prioritize capital investment needs over time, and a project-based prioritization of investments.”

In response, transit agencies across the US have worked to incorporate compliant asset management practices, developing in-house tracking tools, and/or leveraging solutions like the FTA-developed, free-to-use TERM Lite asset management tool.

As trends and requirements in the transit asset management landscape have evolved to incorporate new drivers of value, such as risk, resilience, and equity, and as the number of assets and potential investments being managed have grown, legacy tools just aren’t able to meet the complex investment prioritization needs of many medium to large transit providers. Copperleaf’s solutions expand on the capabilities in TERM Lite, providing transit agencies with a robust, flexible, and centralized solution to manage assets and accurately estimate and prioritize capital investment needs over time.

How can transit agencies gain agility and flexibility in their planning processes when the future is uncertain?

Every transit agency faces constraints and unpredictability—from funding uncertainty and workforce shortages to evolving government regulations and changing ridership demand. This changing environment creates pressure to adapt and justify plans, making planning agility increasingly important.

Having the ability to create multiple versions of the plan to understand the impacts of different operating constraints, targets, and economic conditions is extremely useful. It provides greater transparency because everyone can understand the rationale behind each decision, leading to more defensible, data-driven plans. Copperleaf’s software can run scenario analyses to explore different asset investment strategies, so that stakeholders can agree on the best path forward. If and when circumstances change, it’s much quicker and easier to re-optimize the plan to adapt to new constraints and priorities.

What is your message for rail and transit agencies seeking to meet competing strategic objectives, incorporate risk and resilience into portfolio planning, and make decisions that maximize investment effectiveness across their asset base?

For rail and transit agencies seeking to balance competing objectives and optimize investments, Copperleaf offers a pragmatic solution.

Many people I speak to are concerned that they don’t have the right data or enough data to implement a value-based decision-making approach. But the reality is, the data will never be perfect—and organizations are already using data for decision making. The key thing is to get started! Over time, organizations inevitably become more mature because this process helps them better understand and prioritize the most valuable data to collect that supports decisions.

Contact us to explore how Copperleaf can help your organization maximize investment effectiveness and incorporate risk and resilience into your planning and operations, all while addressing the SGR backlog.