Managing project–system interfaces: case studies of railway projects in restructured UK and German markets

This paper analyses the changing pattern of relationships between project-based suppliers and railway operators in Europe. These changes are related to the creation of new market structures in railway sectors during the 1990s. The paper discusses two main consequences of this change: (1) the shift of core capabilities from railway operators to project-based suppliers, and (2) the emergence of numerous organisational interfaces and new feedback loops that bridge railway projects and railway operations. Drawing upon the concept of large technical systems (LTS) and upon the model of innovation in complex product systems (CoPS), the paper claims that innovative activity in railways can only be adequately understood by paying attention to the interdependencies between railway projects and the operational railway network. Projects and the operational system are interwoven activities, forming a project–system innovation cycle. Two case studies of large-scale railway projects in Germany and the UK are presented to support the argument. The evidence suggests that successful innovation in market-based railway operations increasingly depends on dynamic systems integration and effective co-ordination capabilities. Dynamic systems integration refers to the need for the continuous adaptation of technical and organisational project solutions in response to the changes in the operational system. It is argued that projects can be managed more effectively under market structures that provide certain organisations in the railway system with a strong co-ordinating role in the activities linking projects with the operational system.