Toll Insight spoke with James Hofmann, CEO/Executive Director at the North Texas Tollway Authority (NTTA).
1. Please tell us briefly about your career trajectory, past and current roles, and passion for continual improvement.
Like many, I never considered a career in tolling. My background is in Geographic Information Systems (GIS) and modeling of natural hazards. I expected to either be teaching at a university or running around mountainous regions working with cities to develop mitigation strategies for land and mudslides. Needless to say, the GIS piece took me in a much different direction, eventually providing an opportunity to manage the North Texas Tollway Authority’s enterprise GIS initiative starting in late 2000. One thing led to another, a couple of moves back and forth between working in the consulting world and the operator world and before you know it, 21 years have flown by.
I rejoined NTTA in 2013 as Assistant Executive Director of Operations, overseeing information technology, customer service, collections, and human resources. I began serving as NTTA’s CEO/Executive Director when my boss, Gerry Carrigan, retired in 2019.
In regard to a passion for continual improvement, I’ve always been a go-getter and very ambitious career-wise. When my wife and I were newly married and had a tiff - over what I can’t recall - I do remember telling her “this is how I’m wired.” Her response has lasted with me for more than 25 years. “That’s the lazy way out, and I’m not accepting that answer. I deserve better; we both have to grow as people and a couple,” she said. That moment has helped provide a balanced perspective. To be successful, I need to focus not only on becoming an expert in my profession, but also on my soft-skills, emotional intelligence, etc. It’s a continuous learning and growth process.
At NTTA, we push for excellence, striving for the absolute best customer experience, whether it is on our roadways, using one of our self-service channels or when working with our customer service representatives. We’re also undergoing a multi-year process focused on defining our core values. We call it “Mission: Forward”, which includes valuing the strength of having difficult conversations (“real conversations” as we call them), building trust and assuming positive intent from all. These are hard concepts to internalize and fully embrace, but I’m excited in imagining how successful NTTA will be when we can combine these core values with our existing focus on excellence.
2. As an industry leader and through your involvement with IBTTA, what are your overall views about the challenges and opportunities tolling must continue to focus on in the near and medium-term?
First, we must increase capacity to build what’s needed. Unfortunately, as the need for new and rehabilitated infrastructure is increasing, we’re simultaneously seeing a significant drop in the number of students interested in studying civil engineering, construction sciences, etc. Where will the next generation workforce come from?
Secondly, how can we expand our existing vendor pool? We all acknowledge that the demand by operators to upgrade their back office and/or in-lane systems is outpacing the market’s ability to deliver successful projects. With the rise in Connected, Automated, Shared and Electric (CASE) vehicles and big data, we are seeing new vendors enter the toll industry. However, it’s also been shown that moving into the toll industry is a tough undertaking – our business models are more complex than they may appear at the surface. Each operator has standard operating procedures regarding financial ledgers, customer service, etc. and operations have become ever more complex. At some point, we’re going to have to simplify to lower these upgrade costs and to improve the probability of success across the industry.
Third, the concept of registered-owner vehicle as the basis for charging tolls is about to change. With the expected growth in CASE, Mobility-as-a-Service, shared vehicles and transportation network companies (Uber, Lyft, etc.), charging the renter, passenger or customer in real-time will become the expectation. For many of us, this is a monumental paradigm shift.
When you step back, you can’t help but think what a fantastic time it is to be involved in transportation and tolling. So many possibilities and opportunities! What will die by the wayside, what will thrive? No one knows the exact answer, but it’s all fascinating. The work we’re doing today will determine how our grand-kids move about in the future.
3. NTTA has been at the forefront of piloting innovative transportation solutions. Tell us about which developments stand out in your mind.
When it launched in 1989, the NTTA TollTag became the first electronic toll transponder in the nation, eliminating the need to stop to pay tolls. We are proud of our role in pioneering the electronic tolling technology that is in widespread use today.
In the late 1990s, NTTA partnered with Electronic Transaction Consultants (ETC) to build the RITE System. I believe it was the first web-based toll collection system. NTTA used the core of that system until January 2021. It’s amazing that a system built to handle cash and TollTag transactions could be morphed into one that also handled video tolling, airport parking, interoperability and more than 2.5 million daily transactions. Pretty phenomenal!
Conversion to AET
We take pride in being one of the first agencies to convert their entire toll road system to All-Electronic Tolling (AET). It was an incredible vote of confidence in NTTA staff by our Board of Directors, allowing us to go from a “cash in hand” model to invoicing non-transponder transactions after the fact. We’re all aware of the benefits and challenges of converting to an AET environment but having a mature program in place when the pandemic hit last year was an absolute blessing for us.
Direct Carrier Billing
This is a concept that may be awaiting the right timing in North America – charging small dollar amount transactions to a customer’s cell phone bill. This payment option is prevalent throughout the rest of the world. In the U.S., we’re familiar with it from TV fundraisers or social media, where a donation is added to a cellphone bill by the donor sending a text to the number provided. NTTA has partnered with tapNpay to allow our customers, especially our cash customers, to pay their tolls through their cell phone bills. This way, cash customers don’t need to take the time to visit one of our storefronts or third-party locations. We’re in the initial stages and expect momentum to build as the vendor brings on additional telecommunication partner companies.
Customer rewards program
This is a program that originated from one of our biennial customer surveys. We now have nearly 540,000 participants and average 5,000 redemptions per month. It was a first of its kind program in the industry and continues to grow in both popularity and redemptions as TollTag customers earn points for each dollar spent on tolls.
4. As chair of IBTTA’s Emerging Technologies Committee, which mobility or technology trends do you think are most relevant for tolling?
As discussed earlier, CASE vehicles and their associated technology will impact everything - from how we collect a toll, to refusing entry to toll violators with unpaid transactions, to improved roadway safety and increased density of vehicles on our roadways --to name just a few of the anticipated impacts. We’re also going to need to better understand the impacts of potentially heavier vehicles in relation to the wear and tear of our roadways and bridges. Through the IBTTA Emerging Technology Committee, we’re trying to promote that it’s not too early for toll agencies to start planning for this evolution.
Big data, Business Intelligence (BI) analytics and the systems that will interface to them
From customer payment probabilities to predictive traffic management strategies, the potential in this space is enormous. Issues related to storing, consuming and integrating this data and associated technologies as well as, and building an environment that also allows for systems (such as a new back office) to be upgraded without significant impact to the BI environment are complex and potentially very costly. There is big risk but potentially huge reward in this area.
It’s far out on the horizon, but technologies that could allow infrastructure to “self-heal” are really intriguing, and also a little scary – bringing memories of the various Terminator movies to mind!
The IBTTA Emerging Technologies Committee is tracking a wide range of technologies that we could see over the next 20 years. The focus is on blockchain, CASE, big data, and third-party payment providers. We are also beginning to investigate Advanced Traffic Management Systems (and integration with big data), Road User Charginig and Mobility-as-a-Service.
5. NTTA recently upgraded its back office toll system. How was that process and are there any lessons learned that you’d like to share?
With little fanfare (as intended), NTTA successfully rolled out our new back office toll collection system in January 2021. From initial requirements meetings through to procurement and implementation, NTTA spent four years on the project. It was the culmination of countless peoples’ dedication and commitment to this project. Our agency will forever be indebted to them and the fantastic things they accomplished. I encourage any agency looking to upgrade their back office system to reach out to us, as our project team has many other lessons learned to share.
A proof-of-concept approach was a significant change from traditional procurement models and provided staff with the reassurance needed to recommend our vendor (TollPlus) for approval by our Board of Directors. We spent many months with the two shortlisted vendors, day in and day out, and developed not just an understanding of each vendor’s system but also their project team. By the end of this process, TollPlus was able to show us they understood what we were thinking and wanted to achieve. These projects are a huge commitment and investment; take the time to really get to know your technology partner (and vice-versa) to find the right one.
Surround yourself with an exceptional team
We have many seasoned toll professionals at NTTA, but we knew we needed outside consulting help to improve our chances of success. We were fortunate that our Board let us bring on a project-management vendor, independent QA/QC vendor, and consultants specializing in all areas of operations (invoicing, customer service, parking, interoperability, transaction processing and finance). Having a great team of third-party experts working side-by-side with our internal business experts was a blessing.
Be flexible throughout the process
As a reminder to everyone to “be flexible”, we gave out TollTag-branded Gumby figurines. As with most agencies, our procurement documents included future looking requirements as we were entering a 10-year contract with an additional 10-year option. As such, we didn’t need everything delivered on day one but that was a hard concept for some to support.
Analyze issues you’re trying to “fix” and get customer feedback before going live
We learned to take the time to really analyze changes to existing processes and functionality – what problem are we trying to fix, what’s the magnitude of that problem and how could a proposed/recommended solution work but also backfire? We changed several business rules and modified functionality that existed in our prior system, based upon issues that we had dealt with in the past. There are thousands of decisions that are needed during this type of project and, hard as we try, we’ll never get all of them exactly right. In hindsight, for example, we should have conducted several customer focus groups to test run our new customer service portal. It would have shown us where we should have reconsidered some of the decisions we made before going live.