To contribute to sector progress with digitalisation, the Global Water Research Coalition has released a report drawing on cases from around the world. The Source hears from one of its lead authors.
The water industry has changed radically in the past two decades. Water utilities’ duties to supply water and wastewater services have expanded into resilience planning, acting as conduits between all water users and the water environment, and adjusting to ever more demanding customer service expectations. Replacing analogue with digital systems has already enabled companies to rise to these requirements more efficiently but now ‘digitalisation’ offers more significant step changes.
A new report by the Global Water Research Coalition (GWRC), ‘The Digital Water Utility of the Future’, defines the many components of digitalisation and provides detailed descriptions of the opportunities and risks, enablers and barriers. It suggests a four-step path towards digital maturity, moving from building a strong internal to a strong external focus, and identifies specific opportunities to optimise efficiencies within and between business units, enhance the interface with suppliers and customers, and leverage tighter integration with the community and external agencies. Benefits are achievable at each stage, and different water utilities will find themselves at different stages. Progress requires not just understanding and adopting new technological opportunities, but also transitioning leadership and workforce culture to embrace digital mentalities and ways of working.
The report complements the IWA’s own Digital Water Report, part of the ongoing IWA Digital Water Programme supporting the water industry to understand and accelerate uptake of digital technologies and digital ways of doing business.
Data becomes a strategic asset
Unsurprisingly, technology is identified as a major enabler, and the report gathers input from GWRC’s network to present a wide range of examples spanning the entire water utility business. The report explains how digitalisation differs from traditional approaches, for example analysing data at the business level rather than by service function. It describes how new technology and methods improve capacity to collate disparate data on infrastructure performance, environmental conditions, customers, budgets and find meaningful patterns. The report argues that new business value will come from sharing and using data, with information becoming a new strategic asset, allowing value creation beyond traditional infrastructure.
Dr Greg Ryan, one of the two people who prepared the report for GWRC, comments on current digitalisation uptake focus in the water industry around the world. “In the field it is Smart Meters, closely followed by IoT devices looking at treatment and management of the water cycle. Within the businesses, it has been the move to enterprise-wide systems that link data from disparate sources to provide a single source of truth for the organisation. In addition, there is a keen focus on enhancing customer relationship management systems to better understand and tailor offerings to customers.”
Efficient business – deeper insights
Digitalisation has the power to completely transform water utilities’ business operations, from increasing data accuracy, collated in real time, to predictive analytics and data-driven AI decision support. Digitalised monitoring and control devices, with computer systems that read and respond to monitored measurements, can automate routine processes and increase safety of asset inspections. Self-learning algorithms can make programmes progressively more independent and less in need of operator input, possibly exceeding the capability of humans due to its consistent logic.
The move to enterprise-wide systems referred to by Ryan allows full integration of single-source data that can be meaningfully interrogated and converted to information for decision making. The GWRC report outlines how digital utilities integrate their business units, including asset management, business processes and customer service. As more data is collated and analysed, digitalisation can streamline business systems using tools such as BIM. Having oversight of all or large portions of data collected by the organisation makes it easier to identify trends and issues. This generates deeper insights into system and customer behaviour to predict events before they occur, speed up processes, and pre-empt complaints and enquiries.
Ryan, who is Director of Business Excellence at the Water Services Association of Australia, and commenting in a personal capacity, notes: “This improvement is occurring across many sectors simultaneously, causing water businesses to be compared not just against each other but also other sectors in terms of their performance. In a capital-constrained, post-Covid world, it is becoming increasingly important to become more efficient and deliver high quality customer service.” He adds that the prospects for businesses that are slow to adapt “will depend on many factors including the local political environment, the likelihood of private sector competition, along with economic and social pressures”.
Transform the customer and supply chain experience
Customer service and engagement improvements are a key theme throughout the report. Digital tools are available for water utilities to transform their customer relationships. Customers can be offered virtual tours of facilities or planned developments for consultation, or interactive games to stimulate interest, learning and participation.
Companies can mine digital metering and communications for information on usage patterns and attitudes that can be transformed into new ways of self-servicing, flexible tariff structures, or into entirely new service offerings analogous to those already provided by energy and telecoms companies. However, the authors advise businesses to be aware of how technology may bring major shifts to service provision models, for example, through decentralisation or competition for managing customer relationships.
Procuring for Digital Water
The report discusses opportunities such as the UK Government’s ‘Digital Marketplace’ to improve procurement of digital services. Technology is developing rapidly and it is increasingly difficult to anticipate longer-term procurement needs. Utilities need to be agile, innovative, and well connected to pick up on, and harness the latest trends. However, Ryan advises water managers not to be distracted by new technology. “The key is to focus on the business problems being solved, then seek out digital solutions that are compatible with the current maturity of the organisation. It is no use installing the latest smart meters if the organisation lacks the ability to effectively gather, analyse and respond to the data they produce.”
The report describes how strategic partnerships can reduce the risks of stranded or obsolete IT infrastructure and warns against the temptation to focus on Operations and Maintenance. The higher up the supply chain the procurement strategy is improved, the greater the benefits.
Security breaches and the threat from hackers are valid concerns that act as a barrier to full digitalisation. The report presents a generic digital reference framework identifying key components such as individual ‘internet of things’ devices such as smart meters or sensors, through Bluetooth and WiFi, mobile apps and analytics, to industry-wide or smart city systems.
Security breaches can affect each component. The key to managing cybersecurity is understanding which level of the digital architecture is impacted, how to isolate it, and the extent to which it will affect different parts of the business.
The report outlines cyber-attacks including those aimed at core water utility operations. Hacked systems might enable malicious controls to cut off water supply, disrupt drinking water treatment processes, disrupt sewage pumping to flood houses and sewer overflows, or disrupt sewage treatment to release harmful environmental discharges. Fortunately, there are approaches to help utilities improve their security and the authors present various existing protocols to improve cybersecurity at every digital touchpoint. Encryption is identified as one effective way to protect data and digital operations from cyber-attack.
Sharing data and privacy
The authors suggest data sharing between organisations represents a high level of digital maturity. They identify several touchpoints with other utilities, including the energy sector to optimise performance and manage peaks or disruptions. Sharing data is potentially one of the more difficult aspects to overcome, but Ryan notes: “The ability to share with other organisations and also with the community in a way that protects privacy allows correlations and insights that are very difficult or impossible to gain through any single organisation alone.”
While the report claims it can be relatively straightforward within the supply chain, sharing data more externally is problematic as it concerns personal data and sensitive assets. Unsurprisingly, businesses are often reluctant to share information.
Ryan offers some insights into the reasons for this and how they can be overcome. He sees a need to ensure the privacy and security of the data that is shared. “This can be addressed and has been successfully achieved between organisations such as large banks. The main issue appears to be cost,” he says.
Another key aspect is trust in the data. “Ensuring that the data provided by another organisation is robust and accurate and can be trusted requires standards and agreed protocols for data validation,” he says.
Lack of context can also be an issue. “Providing a set of data without context makes meaningful interpretation difficult. Providing context without identifying the data or breaching privacy is a complex issue that is still being resolved.”
Digitalisation presents significant opportunities to improve intelligence on customers, benefiting both customers and the water utilities. However, it raises questions around the ethics of selling and using customer data and insights.
“The ethics of selling and using customer data and insights start with who owns the data,” says Ryan. “At present, there is an international debate about data ownership, with a shift occurring from companies owning personal data to the data originator owning that data. The water sector is only a minor player in this debate, but the outcomes will have significant impacts for how data is managed. A watching brief is needed in the data ownership space, with particular focus on the large data corporations. Once this debate is resolved the next hurdle is ensuring that the data is used as intended by the owner, without loss of security or unintended misuse.”
Leadership and culture
It is clear that digitally mature leadership is needed to fully embrace digitalisation, to adopt new ways of working, develop and recruit new skills and capabilities, and to become more innovative, agile and collaborative.
Streamlining water company business systems has many obvious benefits. Ryan argues it is the role of ‘digital architects’ to drive forward change to break down water utility silos. “These are people employed to understand the different parts of the business, how their works align with the business direction, and what needs to be done to support efficient delivery. To support the work of these people, strong business governance is required, as well as involving support from senior management and the formation of senior leadership groups to ratify budget allocation and resource priorities.”
The authors compare the features of digital versus analogue cultures. They signpost re-structured organisations with flatter hierarchies and more rapid decision making, modernised attitudes to collaboration, and shifts to developing products to meet customer-led demands and new trends. In digital cultures, people are trained to use new technologies and adjust their skills to meet the emerging challenges.
Skills and digital literacy
A key feature of digital culture is that the workforce understands the value of the data they generate for other parts of the organisation. Ryan says to achieve this utility managers must “instill a level of digital literacy across the organisation. Data needs to be treated as an asset with value, similar to a pipe or a pump. Everyone in the organisation needs to understand that the data they generate provides a piece of a puzzle that, when joined, creates greater insight into customer needs, improving business efficiency, improving staff satisfaction and providing greater customer value.”
The authors recognise that the cost of acquiring data scientists and advanced analytics experts can be prohibitive, so water businesses may move to an app-driven approach to utility management. This calls for expert staff to be skilled at transferring knowledge in a way that can be codified into digital language, people skilled in self-direction, communication, creative design and critical thinking. Some of these skills are consistent with existing workforce skills, some will need to be developed. The use of low-code/no-code solutions may also be helpful to keep processes within utilities and mitigate digital security risks.
Importance of culture
Even the best-designed technological systems can be easily undermined by a poor workplace culture. The ability to smoothly transition through the stages of digitalisation present a significant challenge to the industry. The leader of the future may be likely to have fewer detailed technical skills but a greater level of understanding of data architecture and analytics and greater people skills as they focus more on human-to-human interactions. •
‘The Digital Water Utility of the Future’ report is available at: http://www.globalwaterresearchcoalition.net/sapi/custom.gwrc.project/documents/download?file=835
IWA is a partner of GWRC.