Strategic Issues Facing Transportation, Volume 7: Preservation, Maintenance, and Renewal of Highway Infrastructure (2020)

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45 C H A P T E R 5 Challenges and Risks Introduction Considering the long­term planning horizon of this study, several of the identified emerging and innovative PMR practices are beyond the plausibility of today’s know­how and, there­ fore, transportation organizations need to prepare for a changing future context. This chapter addresses the challenges and risks associated with such PMR practices. Emerging and innovative practices are tools that can enhance the ability of transportation agencies to achieve organizational and performance goals more effectively and efficiently. To maximize their value, agencies need first to focus on those areas that offer the greatest poten­ tial, and then advance them into practice using collaboratively developed and well thought out tactical approaches and processes. The process of positioning for a set of emerging and innova­ tive PMR practices is fraught with challenges relating to technology, institutional and human resources, and legal and external factors. These challenges must be understood and addressed to ensure successful outcomes. This chapter examines the potential challenges and risks associated with implementing such PMR practices, specifically those identified in this research. Challenges and Risks Overview The challenges and risks associated with emerging and innovative practices are grouped into internal and external factors. Internal Factors. The highway industry is a diversified aggregation of national, state, regional, and local agencies, industry and professional associations, private contractors and consultants, vendors and material suppliers, and the academic world of basic research and education. The de­ centralized and somewhat fragmented nature of the industry makes the widespread acceptance and implementation of such emerging and innovative practices among and within organizations a real challenge requiring customized strategies and processes to educate, encourage, convince, demonstrate, and deploy these practices. External Factors. Factors such as market uncertainties and government regulations influence the acceptance and implementation of emerging and innovative practices among highway organi­ zations. Many of these practices are direct or indirect outcomes of research and development that emanate from other sectors. These add a level of complexity, for example, some innovative information and telecommunication technologies offer opportunities of which highway profes­ sionals may be less aware, less comfortable, and therefore less amenable.

46 Strategic Issues Facing Transportation Adding to perception of risk is that transportation agencies may have little or no influence over the technological or regulatory aspects of practices that might heavily influence imple­ mentation efforts and ultimate outcomes. Finally, there are the inherent risks associated with anticipated success of the practices and how well they will be received by industry peers and agency customers. Dimensions of Challenges and Risks Numerous studies have laid out roadmaps for implementing research products and innova­ tive practices (Harder and Benke, 2005); these studies have analyzed organizational capabilities, identified challenges and barriers unique to the highway industry, explored various opportuni­ ties and strategies to overcome, and provided practical solutions in terms of communication needs, implementation strategies, and deployment initiatives. The literature suggests that the generalized internal and external factors of challenges and risks can also be grouped into three categories: • Agency Business and Technical Processes related to how an emerging or innovative practice is approached from both business and technical points of view including technology and per­ formance awareness and knowledge, data management issues, procurement practices, and funding issues. • Agency Institutional Context related to internal agency culture and risk tolerance, as well as staff interested in and capacity for capitalizing on these emerging and innovative practices. • External Collaboration related to key public­ and private­sector interests and influence as well as mechanisms for healthy and transparent collaboration within and outside the highway or transportation community. Within the first two categories, a set of dimensions can be defined and assessed considering the challenges and risks associated with fostering and implementing emerging and innovative practices; the third category is a dimension itself. These dimensions are presented in Table 10, and described in the following sections.

Challenges and Risks 47 Table 10. Dimensions of challenges and risks. Dimensions Challenges and Risks Agency Business and Technical Processes Awareness • Uncertainty with advanced technology (maturity, readiness, and technical validity/limitations) • Inability (or disinclination) to keep pace with technological changes Performance • Uncertainty with performance of technology (e.g., benefits not clearly demonstrated, inconsistent performance) • Focus on outputs rather than outcomes Supportive Systems, Programs, and Budgets • Data and information (issues relating to availability, quality, storage and maintenance, and information security) • Absence of knowledge management systems; inertia of legacy processes and methods • Financial constraints (e.g., limited stable funding and higher capital costs) for research and deployment Legal, Regulatory, and Policy Issue Management • Need for new regulations or standards • Extended approval processes • Contracting practices that discourage innovation • Legal issues (e.g., product liability, insurance) Agency Institutional Context Innovation-Friendly Culture and Organization • Risk aversion (absence of champions for innovation) • Short-term perspective (e.g., over-emphasis on “first costs” rather than life-cycle costs, unwillingness to make upfront investments and await long-term returns) • Absence of top management support • Organizational silos discouraging synergies (among disciplines and distancing researchers from practitioners) Supportive Staff • Absence of clear policies/commitment toward key in-house core staff capacities • Lack of resources for recruitment, retention, training and competitive compensation for key core staff capacities • Challenges associated with labor-saving innovations External Collaboration • Indifference or resistance to certain innovations among customers • Winners and losers among stakeholders • Industry’s “mixed bag” of interest in innovative practices • Orchestrating and marketing a concerted large-scale movement toward innovation Agency Business and Technical Processes Awareness • Uncertainty with advancing technology. Most emerging/innovative practices evolve over time or life­cycle stages, as depicted in a typical S­curve, from embryonic slow advances, to main­ streamed, accelerated growth, to slowed, market­saturated maturity. In the early “embryonic” stage of a PMR emerging/innovative practice, there is a likelihood for overestimation of the plausibility, readiness of early adopters, and value of the innovation. Potential innovative practices that are evolutionary are easier to be forecast, while it is particularly challenging to anticipate the pace of more radical innovative practices that can significantly deviate from or disrupt the current practices in a relatively short period.

48 Strategic Issues Facing Transportation • Inability (or disinclination) to keep pace with technological changes. Given the difficulty of stay­ ing abreast with the range of sectors in which relevant PMR innovative practices may take place, combined with a natural risk­averse inclination and an innate skepticism regarding new and different methods and approaches within many public agencies, most tend to be late adopters who wait for the innovations to reach a critical mass of maturity. Furthermore, there is the reduced ability to control PMR practices that stem from beyond the highway industry. Performance • Uncertainty with performance of technology. There are inherent uncertainties associated with the performance of a PMR emerging/innovative practice: the technology is yet­to­be­ proven; the assessment of benefits and costs could be unrealistic; the limitations are yet­to­ be­ investigated, and its interactions with the highway system are yet to be understood. Given these uncertainties, transportation agencies may find it difficult to anticipate and assess such a practice and plan accordingly. • Focus on outputs rather than outcomes. The historic focus of PMR has been in cost and cost control, rather than impact on user­oriented performance outcomes. As a result, practices that may enhance outcomes while potentially trimming outputs (such as more resilient and lower life­cycle cost materials that result in less frequent repairs, replacements, and user disruptions) may not be given proper weight in assessing the payoffs relative to upfront investments. Supportive Systems, Programs, and Budgets • Data and information. Emerging and innovative practices, such as the IoT and connected vehicles, would change the technology trends from “big data” to “ubiquitous data.” This trend poses significant challenges relating to data capture, management, analysis, and utilization. Practitioners of most sectors tend to collect more data. However, additional investments are required for collecting a wide variety of complex data, handling massive data sets, ensuring data quality, and analyzing data to a higher degree of detail and more expeditiously. Agencies need not only augment hardware, software, and analytical capabilities to deal with the vol­ ume, velocity, and variety of data that comes in, but also require information management processes and protocols to manage data as assets while considering the concerns of privacy and data security. • Absence of knowledge management systems. Similarly, there is the danger of too much data from a multiplicity of sources in this digital era, while contrastingly, there is a paucity of useful information and a lack of sufficient analysis and assessment that might guide future actions. Available data must be distilled so that its value will give the agency a compelling advantage in making decisions and taking actions. In the absence of knowledge management systems staffed by discerning professionals, transportation agencies will find it harder to appropriately allocate resources to advance potential PMR practices. • Financial constraints. Transportation agencies, which are largely dependent on user fees and taxes, face significant constraints and challenges in resource allocation among competing needs for PMR. Costs of staff development, innovation management, and experimentation may be given a low priority notwithstanding potential payoffs that reduce expenditures and enhance outcomes.

Challenges and Risks 49 Legal, Regulatory, and Policy Issue Management • Need for new regulations and standards. PMR emerging/innovative products, methods, and processes require newer standards, specifications, and special provisions, many of which will be untested. Also, competing interests of public­ and private­sector organizations will play a role in developing these standards and specifications. Further, there are some related issues that need to be addressed that transportation agencies have traditionally not experienced or dealt with, such as privacy infringement, information security, and access to proprietary information. • Extended approval processes. PMR emerging/innovative products and practices that require new standards or that intersect with new issues of public policy may become mired not only under current, and at times, arduous processes that are invariably stacked in favor of current practices, but they also may necessitate developing new and amended policies, procedures, and review processes for breaking new ground. In some cases, these issues may even trigger a conflict over jurisdiction with other public agencies (e.g., when dealing with practices involv­ ing environmental or information technology). • Contracting processes that discourage innovative approaches. Conventional contracting prac­ tices that involve standard specifications, prescriptive methods, and low initial bids have often impeded the adoption of emerging/innovative approaches both at the owner and contractor levels. However, some alternative approaches, such as unconventional contracting practices (such as performance­driven, best­value selections, and life­cycle costs and benefits that pro­ vide private­sector incentives) are in current use. • Legal issues. In some cases, transportation agencies have discouraged the use of proprietary products or procedures for reasons relating to competition in the procurement process, a lack of evidence on performance, questions of product liability, or a failure to adhere strictly to agency standards. With the accelerated emergence of digital technologies, agencies are faced with a new set of issues relating to the use of third­party private data, digitally engineered models, electronic documentation and commercial off­the­shelf information systems. Among these issues are copyrights ownership, interoperability, and liability. Agency Institutional Context Innovation-Friendly Culture and Organization • Risk aversion. PMR emerging/innovative practices, by their very nature, entail risks: risks of failure due to over­optimism at the early, unproven stages of development; risks of cost over­ runs and schedule delays; risks of under­performance or outright failure; and risks of cred­ ibility loss and embarrassment. Transportation agencies, as public agencies, tend to be risk averse, and many public­sector employees (though certainly not all) are reluctant to put their reputations and future careers on the line or invest the time and energy to overcome systems and processes geared largely to continuing past practices. In most public agencies, even where innovative practices are encouraged by the leadership, navigating unchartered waters neces­ sitates swimming upstream against a torrent of embedded rules, criteria, and processes that are not easy to change or work around. While there are limited rewards for success, there is a potential for significant adverse implications when setbacks and failure occur in government. Given the naturally limited appetite for risk­taking in the public domain, there are examples of entire agencies and pioneering staff, albeit relatively few in number, who are willing to step

50 Strategic Issues Facing Transportation out and undertake new innovations with no guarantee of outcomes. Even more encouraging are the early adopters of proven practices, where risks have been measurably reduced, and the interest in occupying the “leading” if not the potentially “bleeding” edge of innovation is measurably greater. • Short-term perspective. Due to inevitable fiscal constraints, and in particular stemming from the process—and politics—of annual budgeting, agencies have traditionally focused on “first” or initial costs in making decisions relating to alternative selection and contract awards. The “first cost” approach takes the emphasis away from analyzing benefits and costs on a life­cycle basis, and discourages upfront investments in anticipation of long­term outcomes. • Absence of top management support. Some emerging/innovative practices expose agencies to both internal cost and effectiveness­related risks—or, in some cases, to highly visible risks of failed experimentation. Given the political nature of public agencies, it is not surprising that some PMR emerging/innovative practices are approached with extreme caution. In the absence of formal and enduring institutional arrangements for the management of these practices, there is a strong dependency upon case­by­case top management buy­in to ensure the necessary commitment of resources and to provide sufficient time for development, refinement, and validation. Furthermore, since most organizations lack internal systems in­ place to measure the outcomes of such practices over extended periods, top management tends to rely more on near­term outcomes and traditional metrics that otherwise may not truly capture the potential value of these innovative practices. • Organizational silos discouraging synergies. Legacy highway agency organizations are necessarily specialized into discipline areas which, in the absence of a strong culture of collaboration, can evolve into difficult­to­penetrate silos that tend to discourage PMR emerging/ innovative practices. Also, most transportation agencies have placed research­oriented activities in a special branch distinctly separated from practitioner activities, and without a sufficiently strong focus on technology transfer and collaborative demonstrations among researchers and practitioners. Supportive Staff • Absence of clear policies/commitment toward in-house core staff capacities. A focus on PMR emerging/innovative practices brings with it the need to develop and sustain a minimum core of in­house staff capacity in a range of competencies related to these practices, including traditional highway disciplines as well as less traditional areas, such as information technol­ ogy and telecommunications. While outsourcing may well make the most sense for much, and very likely most, of the staff expertise required to advance PMR practices, the absence of minimal levels of core expertise can relegate an agency to “flying blind” or relying 100 percent on outside experts. These outside experts may or may not have a complete picture of agency needs, or a grasp of agency strengths and limitations, or the ability to enhance the former and manage the latter, in addressing whether, when, how and in what areas specific PMR prac­ tices would be worthy of advancing. A minimum core of in­house expertise could champion worthy PMR innovative practices while modifying or putting the brakes on potentially ill­ conceived or ill­suited initiatives. • Lack of resources for recruitment, retention, training and competitive compensation. Trans­ portation agencies face multifaceted challenges in competing for, engaging, and retaining talented employees who will advance new ideas and PMR emerging/innovative practices at both individual and organizational levels. Perennial budget cuts and downsizing common to so many agencies, inadequate base compensation and pay freezes with only occasional miniscule increases, inadequate funding for training and for advancing technology transfers

Challenges and Risks 51 coupled with decades of waning prestige associated with careers in public service represent formidable obstacles. These obstacles are offset to a limited degree by the potential of greater responsibilities at an earlier career stage and the potential to make a real difference for those who do make it into the system and who learn to shine as agents of innovation. • Challenges with labor-saving innovative practices. Certain potential PMR emerging/innovative practices will increase the demand for either in­house or contracted labor, with a consequent impact on both agency employees and private­sector business activity. While there are obvi­ ous advantages, the potential for labor­saving activities is likely to stimulate opposition on the basis of these impacts. External Collaboration • Indifference or resistance to certain PMR emerging/innovative practices among customers. Many “behind­the­scenes,” internally focused practices will not be apparent to customers who are likely to be indifferent about them in the absence of a targeted public information effort. This can be a barrier if there is no groundswell of support for the necessary funding or acceptance of risks. On the other hand, certain PMR practices may be resisted by customers who per­ ceive that they will be disadvantaged in some way (e.g., HOV lanes and ramp metering were strongly resisted by those customers who perceived that they were being disadvantaged, as have downtown cordon congestion pricing initiatives, which have failed to find any accep­ tance in the United States). • Winners and losers among stakeholders. While PMR emerging/innovative practices may ulti­ mately result in cost savings and service improvements that accrue to the benefit of the public sector, they invariably have certain short­run or long­term negative impacts on some indi­ viduals or groups who have a vested interest in the status quo, and who may use every tool at their disposal to steer a highway agency away from potential beneficial practices that would damage their interests. Similarly, there are those whose potential to gain from certain changes drives them in the direction of pressing for those changes, whether or not net benefits are in the offing. What both groups—potential winners and losers due to changes in how business is done by transportation agencies—have in common is the tendency to exaggerate their claims and apply pressure to agency and political leadership in a manner that might tilt the playing field in their direction. None of this helps the case for objective, merit­driven PMR emerging/ innovative practices, but it reflects a reality that often must be addressed. • Industry’s “mixed bag” interest in emerging/innovative practices. For many years, the vast majority of private­sector highway work was by relatively small contractors who were used to working under prescriptive “method” specifications that told them not only what the end­ state deliverable was, but also exactly how to get there. These small contractors built most of the Interstate highway system, a small piece at a time. While there were reasons for this approach relating to quality and consistency that date back a century or more, it did not foster much interest in being innovative. This has changed dramatically in recent years, particularly for large and complex renewal projects that need to be done with a minimum of disruption to communities and to existing traffic. The need for large firms, or consortia, with the capac­ ity to bid on such large and complex projects, as well as the inherent challenges in coming up with optimum and affordable solutions, has driven a surge of interest in innovative prac­ tices through the use of alternative delivery methods. This has been manifest in best­value design­build procurements, where selections are heavily influenced by creativity arising from alternative technical concepts that are encouraged and rewarded, as well as by a shift away from method specifications and toward performance specifications. While private­sector involvement in most PMR activities, which tends to be on a smaller scale, remains dominated

52 Strategic Issues Facing Transportation by smaller contractors who are less attracted to the risk/reward potential, the entry of larger contractors, particularly in larger performance­based PMR assignments, can be expected to move the needle toward increased industry interest in PMR innovative practices over time. • Orchestrating and marketing a concerted large-scale movement toward emerging/innovative practices. Moving toward encouraging, systematizing, and communicating PMR emerging/ innovative practices in a large and diverse highway industry represents a major challenge, as well as an opportunity. The breadth and depth of the highway industry, involving literally thousands of public­ and private­sector entities and the myriad array of ongoing efforts rep­ resents its own set of challenges as well as opportunities, particularly in striving toward prac­ tices that reflect widespread consensus and a reasonable degree of coherence, recognizing that inevitably, there will be many differences as well. Indeed, the varying perspectives and debates can serve an invaluable purpose in sharpening the focus and improving PMR practices. Risks and Challenges by Dimension—A Summary Analysis In addition to the depiction of risks and challenges confronting emerging PMR practices in general, each individual emerging PMR practice was evaluated for potential risks and challenges (see Tables 11a, b, and c). A risk scoring methodology was adopted to rate the overall risk associ­ ated with each practice. First, the potential risks/challenges associated with each PMR practice were rated as one of four levels: major risk (score = 5), moderate risk (score = 3), modest risk (score = 1), and minor or no risk (score = 0) and then summed up to produce a “composite risk score” for this practice.

Challenges and Risks 53 Ta b le 1 1a . R is ks a n d c h al le n g es a ss o ci at ed w it h e m er g in g P M R p ra ct ic es . Ri sk s an d Ch al le ng es G re en Ch em is tr y Hy pe r- Pe rfo rm an ce M at er ia ls ND T fo r An ci lla ry As se ts St ru ct ur al He al th M on ito rin g CX M An al yt ic s M ac hi ne Le ar ni ng - AI fo r A ss et M an ag em en t U nc er ta in ty w ith a dv an ce d te ch no lo gy     In ab ilit y to k ee p pa ce w ith te ch no lo gi ca l c ha ng es    U nc er ta in ty w ith p er fo rm an ce o f t ec hn ol og y      Fo cu s on o ut pu ts ra th er th an o ut co m es    Is su es re la tin g to d at a av ai la bi lit y, qu al ity , s to ra ge , a nd m ai nt en an ce a nd s ec ur ity    Ab se nc e of re le va nt k no w le dg e m an ag em en t s ys te m s   Fi sc al c on st ra in ts    C on tra ct in g pr ac tic es th at d is co ur ag e in no va tio n  N ee d fo r n ew re gu la tio ns o r s ta nd ar ds   Ex te nd ed a pp ro va l p ro ce ss es    Le ga l i ss ue s (p ro du ct li ab ilit y, in su ra nc e)   R is k av er si on (a bs en ce o f c ha m pi on s)  Sh or t-t er m p er sp ec tiv e    Ab se nc e of c le ar p ol ic ie s/ co m m itm en t t ow ar d ke y in -h ou se c or e st af f c ap ac iti es H um an re so ur ce li m ita tio ns in s ki ll se ts re qu ire d fo r s uc ce ss fu l i nn ov at io n de pl oy m en t    La ck o f r es ou rc es fo r r ec ru itm en t, re te nt io n, tr ai ni ng , a nd c om pe tit ive c om pe ns at io n fo r k ey c or e st af f c ap ac iti es C ha lle ng es a ss oc ia te d w ith la bo r-s av in g PM R in no va tiv e pr ac tic es Ab se nc e of to p m an ag em en t s up po rt  O rg an iz at io na l s ilo s di sc ou ra gi ng s yn er gi es    In di ffe re nc e or re si st an ce to c er ta in in no va tiv e pr ac tic es a m on g cu st om er s  W in ne rs a nd lo se rs a m on g st ak eh ol de rs In du st ry ’s “m ixe d ba g” in te re st in a g ive n PM R p ra ct ic e    O rc he st ra tin g an d m ar ke tin g a co nc er te d la rg e- sc al e m ov em en t t ow ar d a gi ve n PM R pr ac tic e Ri sk S co re 29 21 23 46 7 26 Le ge nd :  M aj or R is k (R is k Sc or e = 5) ,  M od er at e R is k (R is k Sc or e = 3) ,  M od es t R is k (R is k Sc or e = 1) , B la nk – M in or o r N o R is k (R is k Sc or e = 0) . N D T – no n- de st ru ct ive te st in g. A I = a rti fic ia l i nt el lig en ce .

54 Strategic Issues Facing Transportation Ta b le 1 1b . R is ks a n d c h al le n g es a ss o ci at ed w it h e m er g in g P M R p ra ct ic es . R is ks a n d C h al le n g es EP D iB IM fo r Hi gh w ay s En te rp ris e In fo rm at io n Sy st em s G am e/ Si m ul at io n W or kf or ce Tr ai ni ng CA V Ap pl ic at io ns to S up pl y Re al -ti m e Co nd iti on s AI Ap pl ic at io ns fo r T ra ffi c M an ag em en t U nc er ta in ty w ith a dv an ce d te ch no lo gy    In ab ilit y to k ee p pa ce w ith te ch no lo gi ca l c ha ng es      U nc er ta in ty w ith p er fo rm an ce o f t ec hn ol og y   Fo cu s on o ut pu ts , r at he r t ha n ou tc om es Is su es re la tin g to d at a av ai la bi lit y, qu al ity , s to ra ge a nd m ai nt en an ce a nd s ec ur ity      Ab se nc e of re le va nt k no w le dg e m an ag em en t s ys te m s    Fi sc al c on st ra in ts C on tra ct in g pr ac tic es th at d is co ur ag e in no va tio n  N ee d fo r n ew re gu la tio ns o r s ta nd ar ds   Ex te nd ed a pp ro va l p ro ce ss es  Le ga l i ss ue s (p ro du ct li ab ilit y, in su ra nc e)  R is k av er si on (a bs en ce o f c ha m pi on s)   Sh or t-t er m p er sp ec tiv e    Ab se nc e of c le ar p ol ic ie s/ co m m itm en t t ow ar d ke y in -h ou se c or e st af f c ap ac iti es    H um an re so ur ce li m ita tio ns in s ki ll se ts re qu ire d fo r s uc ce ss fu l i nn ov at io n de pl oy m en t      La ck o f r es ou rc es fo r r ec ru itm en t, re te nt io n, tr ai ni ng a nd c om pe tit ive c om pe ns at io n fo r k ey c or e st af f c ap ac iti es    C ha lle ng es a ss oc ia te d w ith la bo r-s av in g PM R p ra ct ic es   Ab se nc e of to p m an ag em en t s up po rt   O rg an iz at io na l s ilo s di sc ou ra gi ng s yn er gi es    In di ffe re nc e or re si st an ce to c er ta in P M R p ra ct ic es a m on g cu st om er s  W in ne rs a nd lo se rs a m on g st ak eh ol de rs In du st ry ’s “m ixe d ba g” in te re st in a g ive n PM R p ra ct ic e   O rc he st ra tin g an d m ar ke tin g a co nc er te d la rg e- sc al e m ov em en t t ow ar d a gi ve n PM R pr ac tic e Ri sk S co re 14 18 16 5 34 20 Le ge nd :  M aj or R is k (R is k Sc or e = 5)  M od er at e R is k (R is k Sc or e = 3)  M od es t R is k (R is k Sc or e = 1) B la nk – M in or o r N o R is k (R is k Sc or e = 0) .

Challenges and Risks 55 Ta b le 1 1c . R is ks a n d c h al le n g es a ss o ci at ed w it h e m er g in g P M R p ra ct ic es . R is ks a n d C h al le n g es Pr ed ic tiv e- Pr oa ct iv e M ai nt en an ce Re gi m e fo r Ro ad w ay As se ts Th e Io T Se lf- Di ag no si ng / Re po rt in g an d W or k O rd er in g Pe rp et ua l/ Lo ng -L ife Hi gh w ay In fra st ru ct ur e Ad va nc ed T SM O De vi ce a nd Co m m un ic at io ns Sy st em s M ai nt en an ce CA V V2 I Te ch no lo gy U nc er ta in ty w ith a dv an ce d te ch no lo gy     In ab ilit y to k ee p pa ce w ith te ch no lo gi ca l c ha ng es    U nc er ta in ty w ith p er fo rm an ce o f t ec hn ol og y     Fo cu s on o ut pu ts , r at he r t ha n ou tc om es Is su es re la tin g to d at a av ai la bi lit y, qu al ity , s to ra ge a nd m ai nt en an ce a nd s ec ur ity     Ab se nc e of re le va nt k no w le dg e m an ag em en t s ys te m s    Fi sc al c on st ra in ts       C on tra ct in g pr ac tic es th at d is co ur ag e in no va tio n N ee d fo r n ew re gu la tio ns o r s ta nd ar ds      Ex te nd ed a pp ro va l p ro ce ss es Le ga l i ss ue s (p ro du ct li ab ilit y, in su ra nc e)   R is k av er si on (a bs en ce o f c ha m pi on s)    Sh or t-t er m p er sp ec tiv e      Ab se nc e of c le ar p ol ic ie s/ co m m itm en t t ow ar d ke y in -h ou se c or e st af f c ap ac iti es   H um an re so ur ce li m ita tio ns in s ki ll se ts re qu ire d fo r s uc ce ss fu l i nn ov at io n de pl oy m en t     La ck o f r es ou rc es fo r r ec ru itm en t, re te nt io n, tr ai ni ng a nd c om pe tit ive c om pe ns at io n fo r k ey c or e st af f c ap ac iti es    C ha lle ng es a ss oc ia te d w ith la bo r-s av in g PM R p ra ct ic es  Ab se nc e of to p m an ag em en t s up po rt     O rg an iz at io na l s ilo s di sc ou ra gi ng s yn er gi es    In di ffe re nc e or re si st an ce to c er ta in in no va tiv e pr ac tic es a m on g cu st om er s  W in ne rs a nd lo se rs a m on g st ak eh ol de rs In du st ry ’s “m ixe d ba g” in te re st in a g ive n PM R p ra ct ic e    O rc he st ra tin g an d m ar ke tin g a co nc er te d la rg e- sc al e m ov em en t t ow ar d a gi ve n PM R pr ac tic e  Ri sk S co re 24 60 54 10 31 56 Le ge nd :  M aj or R is k (R is k Sc or e = 5)  M od er at e R is k (R is k Sc or e = 3)  M od es t R is k (R is k Sc or e = 1) B la nk – M in or o r N o R is k (R is k Sc or e = 0) . (c o n ti n u ed o n n ex t p ag e)

56 Strategic Issues Facing Transportation Ta b le 1 1c . R is ks a n d c h al le n g es a ss o ci at ed w it h e m er g in g P M R p ra ct ic es ( co n ti n u ed ). R is ks a n d C h al le n g es De di ca te d Co rr id or s fo r Au to m at ed Ve hi cl es Au to m at ed En fo rc em en t fo r W or k Zo ne s O ut so ur ci ng an d Pr iv at iz at io n 3D P rin tin g Co ns tru ct io n Ro bo tic s Re m ot e Se ns in g Sy st em s U nc er ta in ty w ith a dv an ce d te ch no lo gy    In ab ilit y to k ee p pa ce w ith te ch no lo gi ca l c ha ng es    U nc er ta in ty w ith p er fo rm an ce o f t ec hn ol og y    Fo cu s on o ut pu ts , r at he r t ha n ou tc om es     Is su es re la tin g to d at a av ai la bi lit y, qu al ity , s to ra ge a nd m ai nt en an ce a nd s ec ur ity   Ab se nc e of re le va nt k no w le dg e m an ag em en t s ys te m s   Fi sc al c on st ra in ts  C on tra ct in g pr ac tic es th at d is co ur ag e in no va tio n N ee d fo r n ew re gu la tio ns o r s ta nd ar ds    Ex te nd ed a pp ro va l p ro ce ss es    Le ga l i ss ue s (p ro du ct li ab ilit y, in su ra nc e)      R is k av er si on (a bs en ce o f c ha m pi on s fo r i nn ov at io n)   Sh or t-t er m p er sp ec tiv e    Ab se nc e of c le ar p ol ic ie s/ co m m itm en t t ow ar d ke y in -h ou se c or e st af f c ap ac iti es  H um an re so ur ce li m ita tio ns in s ki ll se ts re qu ire d fo r s uc ce ss fu l i nn ov at io n de pl oy m en t     La ck o f r es ou rc es fo r r ec ru itm en t, re te nt io n, tr ai ni ng a nd c om pe tit ive c om pe ns at io n fo r k ey c or e st af f c ap ac iti es   C ha lle ng es a ss oc ia te d w ith la bo r-s av in g in no va tio ns    Ab se nc e of to p m an ag em en t s up po rt    O rg an iz at io na l s ilo s di sc ou ra gi ng s yn er gi es    In di ffe re nc e or re si st an ce to in no va tiv e PM R p ra ct ic es a m on g cu st om er s  W in ne rs a nd lo se rs a m on g st ak eh ol de rs  In du st ry ’s “m ixe d ba g” in te re st in a g ive n in no va tio n   O rc he st ra tin g an d m ar ke tin g a co nc er te d la rg e- sc al e m ov em en t t ow ar d a gi ve n in no va tio n   Ri sk S co re 35 28 35 39 40 17 Le ge nd :  M aj or R is k (R is k Sc or e = 5)  M od er at e R is k (R is k Sc or e = 3)  M od es t R is k (R is k Sc or e = 1) B la nk – M in or o r N o R is k (R is k Sc or e = 0) .

Challenges and Risks 57 Crosscutting Challenges Emerging and innovative practices are likely to face many risks and challenges, as listed in Table 12. There are many commonalities among them based on the attributes of the emerging PMR practices; three are highlighted further for emphasis: • Uncertainty. One of the foremost challenges for transportation agencies is dealing with the uncertainties relating to the performance and benefits of a given PMR practice in relation to costs. Agencies are at a disadvantage when the credibility and consistency of a practice’s per­ formance cannot be established with a degree of confidence, and those benefits resulting from performance outcomes cannot be objectively quantified in advance. Certainly, the higher the investment requirements associated with a given practice, the more they must be justified by their potential benefits. Depending on the urgency of need for an innovative approach and tolerance for risk, it may be prudent to consider practices in which adoption and deployment of the highest risk, highest cost, and least certainty in terms of outcomes occurs not at the leading edge of that practice but in a subsequent wave or generation of adoption and deploy­ ment of that practice where the experience of others can be brought to bear. • Dependence on other sectors. Technologically sophisticated and complex emerging PMR practices involving multiple specialties and disciplines are particularly challenging. Examples include the IoT, machine learning applications, 3D printing, robotics, sensors for structural health monitor­ ing, green chemistry applications, and connected V2I. These practices are heavily based on the developments in other sectors, such as information technology, communications technology, micro­electro­mechanical systems, materials, manufacturing, and cartography. Traditionally, the highway industry has only been an end­user of these products with relatively little influence or control on how these PMR practices evolve, including their cost, product reliability and quality, timeline, and performance. Further, there is very little an agency can do until these practices are mature and evaluated thoroughly. When these prac­ tices are out in the market, in the absence of in­house expertise, the agencies will have to depend on others to provide guidance and technical support on procurement specifications, installation, testing, operationalizing, and maintenance and repair. • Change management. It is important for transportation agencies to consider change in man­ agement processes when implementing a shift to embracing emerging and innovative PMR practices involving change in routine work processes. Agencies need to be careful not to under­ estimate the resistance to change from legacy systems, lack of coordination and cooperation among different internal business units and between practitioners and the research commu­ nity, and morale issues among employees who fear being displaced because their skillsets may no longer be needed. An essential aspect of change management is finding and designating internal champions to navigate the complex maze of formal approvals and informal buy­in through collaborative and motivational approaches that can build support and overcome resistance without leaving a destructive and potentially counterproductive path in the wake. Top management support is critical to sustain not only the investment of funding, but also the investment of time and energy, which can be just as limited. The composite risk scores for all PMR emerging and innovative practices are listed in Table 12. As shown in the table, the composite risk scores for PMR practices range from 5 for game/ simulation workforce training (least risky and challenging) to 60 for the IoT (most risky and challenging). The average risk score is approximately 29; half of the practices have a score between 20 and 39. This variation reflects the extent of barriers to implementation facing the different practices (e.g., some practices may require considerable technological, regulatory, or customer acceptance changes outside the control of the agency). In all, a majority of the emerging PMR practices pos­ sess a moderate number of risks and challenges to implementation over the long term.

58 Strategic Issues Facing Transportation Table 12. Risk scores for PMR emerging and innovative practices. Emerging or Innovative Practice Composite Risk Score Green Chemistry Applications 29 Hyper-Performance Materials 31 NDT for Ancillary Assets 23 Structural Health Monitoring 46 CXM Analytics 7 Machine Learning—Artificial Intelligence for Asset Management 26 Environmental Product Declarations 14 iBIM for Highways 18 Enterprise Information Systems 16 Game/Simulation Workforce Training 5 CV Applications to Supply Real-time Conditions Information 34 Artificial Intelligence—PMR Traffic Management Applications 20 Predictive-Proactive Maintenance Regime for Roadway Assets 24 The IoT—PMR 60 Self-Diagnosing/Reporting and Work Ordering 54 Perpetual/Long-Life Highway Infrastructure 10 Advanced TSMO Device and Communications Systems Maintenance 31 V2I Technology Providing Communications Between Passing Vehicles and Roadside Units 56 Dedicated Corridors for Automated Vehicles 35 Automated Enforcement for Work Zones 28 Outsourcing and privatization of PMR 35 3D Printing of Infrastructure Components 39 Construction Robotics 40 Remote Sensing Systems 17 Transportation agencies have many common challenges that are applicable to most emerg­ ing PMR practices: concerns about performance, need for resources, need for training and standards, different skills for the workforce, and attracting and retaining a minimum core of in­house capacity. The challenges are likely to be more pronounced and extensive for radical, high­cost, and high­impact emerging/innovative practices than for smaller scale and evolu­ tionary practices.