Five barriers preventing a digital water utility
Digital solutions can help water utilities to meet climate change challenges, new regulations and ageing networks instead of "savage hikes in the price of water".
Furthermore, modern solutions could help to save 11.6% of a water utility’s annual spend. And using data at every opportunity can help water utilities improve operations at a lower cost and maximise overall benefit.
Yet, despite the often-publicised benefits of digital solutions, there remains an inconsistent uptake in digital solutions from water utilities.
That’s according to a new whitepaper ‘Accelerating the digital water utility’ released by Global Water Intelligence (GWI), together with pump company, Grundfos.
Five barriers halting a digital water utility
Multiple water utilities from around the world were consulted to produce the whitepaper.
It concluded that there remain five main obstacles to creating a “digital utility”, including:
- It is challenging to escape digital poverty.
The utilities consulted were “wealthy in digital terms”, the whitepaper said. They had sound basic systems and staff used to delivering change. Each new project built on this base. As they accumulated data and expertise, everything became easier. The reverse is also true. Those utilities without a robust digital endowment are likely to find projects more difficult and less rewarding.
- The key does not fit the lock.
Leaders complained of the mismatch between what vendors want to sell and what they want to buy. Each utility has different priorities and different systems to build on. Vendors, on the other hand, prefer to sell the same thing over and over, according to the whitepaper. That is how they make a profit. There is a compromise to be had. It only happens if the two sides devote time to talk.
- Assessment is difficult.
The leaders reported that it was difficult to make a case for their spending on digital systems. The costs and the benefits may be spread unevenly across CAPEX (capital costs) and OPEX (operational costs) and different departments. Even when a project is up and running, it is difficult to know the full costs and benefits.
Most utilities have to buy through public tenders, which does not work well for digital projects for three reasons. First, because no two vendors offer a directly comparable package with a clear price tag. Secondly, because compatibility with existing systems is often more important than price. Thirdly, because the end point of the journey is often not visible from the starting point. A total of 71% of the leaders spoken to preferred to travel with long-term partners. Evolving the procurement model to meet this need would help.
- Internal issues.
Utility leaders had to rank 13 problems that they might face in implementing digital projects. The top concerns included: Concerns about cybersecurity; staff resistance; utilities are institutionally resistant to change and lack of coordination between projects, among others.
There is no standard ‘digital journey’
A total of 32 water utilities participated in the survey, selected on the grounds of the maturity of their digital engagement.
This included the Hong Kong Water Supplies department from Asia, Yarra Valley Water from Australasia, Anglian Water and VCS Denmark from EMEA and DC Water and Tucson Water from North America.
When asked for their explanation as to why there has been such inconsistency in digital investment practices, respondents highlighted that each utility will operate under their own unique procurement strategy, developed independently to suit their circumstance and experience. One conclusion of the whitepaper was that “there is no standard digital journey”.
A variety of utility leaders were quoted when addressing the reasons why water utilities can struggle to become digital utilities.
Joke Cuperus, CEO, PWN, The Netherlands, said: “Because we’re obliged to use European tendering for our procurement processes, it’s very difficult to enhance communications with digital solutions vendors.”
Erin Mahoney, CEO of York Region, added: “Not having a clear framework of what 'Digital' means is a significant barrier to adoption. Digital Transformation is all about: People, Processes, then Technology. We need to move from rhetoric to reality.”
Meanwhile, the Hong Kong Water Supplies Department reported that: “The reasons for the mismatch between the positive perception of digital solutions’ potential impact and the slow pace of their adoption may include several factors. New digital solutions can require huge capital investment, both from the initial investment and recurrent maintenance costs.
“It can also be difficult to build a strong business case for deployment of innovative digital solutions for lack of sufficient successful reference applications, making it hard to quantify the potential merits and savings of new or innovative digital solutions.”
Comparing water utilities to Amazon
Nigel Watson, CIO, Northumbrian Water, UK, said one of the key motivations to digitise is not just about savings, but also delivering excellent customer service.
Northumbrian is aiming to have a ‘Net Promoter Score' (an index measuring customer's willingness to recommend products and services to others) of 70%.
Watson said: “We won't achieve that unless we match our service to the experience, our customers are getting from other leading suppliers. Obviously, they can't compare us with another water company, but they will compare us to the likes of Amazon. That level of convenience through digital is what our customers expect.”