Water companies share a similar list of pressures with other utilities that provide essential services in the UK. They include an ageing infrastructure that is expensive and difficult to maintain, an engineering skills shortage and changing expectations from customers for the quality of service they receive.
However, water companies face additional complexities. Not only are they regulated differently from peer organisations, but they are also prevented by law to use similar sanctions such as removing access to supply. So what are the (highly intertwined) priorities for water companies in the year that lies ahead, and how can technology including intelligent automation improve resilience and productivity?
Through our extensive work with UK water companies, notably United Utilities, we have identified the top six priorities for the year ahead. This article serves as an introduction to a series of new blogs, in which we will dive deeper into each priority—and how intelligent automation can address the big challenges today’s water companies face.
Priority #1: Meet the needs of the regulators
This is arguably the most important driver behind all of the priorities on water companies’ to-do lists. Ofwat’s 2019 price review (PR19) ushered in a new era in terms of the customer measure of experience (C-MeX), which means people can complain to the regulator not just about the quality of services in their own locality but also outside it. Further to that, complaints can be made via any channel, including social media, and must be logged and followed up effectively, while the regulator is now within its rights to contact customers on a randomised basis to test their views. Using intelligent automation, water companies can automate all of the processes associated with C-MeX compliance, ensuring that communications are guided safely through to the right team for action and resolution.
Priority #2: Deal with ageing, inefficient infrastructure
Some of the UK’s largest water companies have pipes and other equipment dating back hundreds of years. It means that precious water is lost through leaks or that customer supplies are contaminated with waste. This exposes water companies to reputational risk as well as fines and reprimands from the regulator. But pressure on revenues, exacerbated by the impact of the pandemic on peoples’ ability to pay their household bills, makes expensive capital expenditure projects difficult to greenlight. Water companies increasingly use internet of Things (IoT) technologies to predict maintenance and repair needs, gathering data from sensors out in their physical infrastructure networks then using intelligent automation to feed this back to engineering teams for scheduling into work routines.
Priority #3: Protect revenues
Since access to clean water is a basic human right, it is not legally possible for water companies to remove supplies from customers, as electricity, gas or telecom providers can do with their services. With so many customers experiencing, or expected to experience, financial hardship, water companies are having to come up with creative, flexible payment and debt solutions for customers. Traditional IT systems did not allow for anything other than straightforward, one-size-fits-all billing and revenue protection systems. With intelligent automation, water companies can take a leaf out of the way banks handled payment holidays and flexible schemes during the pandemic—finding ways to help customers adopt manageable ways to pay for their water services to both parties’ mutual benefit.
Priority #4: Secure process efficiencies
It has often been said that water is an analogue service operating in a digital world. And while there are notable exceptions that have automated many traditional processes, such as finance, HR and customer service, there is still plenty of room for improvement. Another impact of the pandemic has been to show how inefficient processes can be, especially when teams are working remotely. With intelligent automation, water companies can improve productivity and efficiencies across the whole business. This reduces cost to serve ratios and improves profitability, freeing up funds to pay for investments in repairs or new infrastructure.
Priority #5: Respond to public and regulatory demands for effective contributions to the environment
Another important element of Ofwat’s PR19 is its emphasis on sustainability. We have already seen initiatives in the water industry such as transforming areas around sewage plants into nature reserves, or the commitment to plant 11 million trees by 2030. Ofwat has launched the Innovation in Water Challenge to encourage new thinking in how companies can help fight climate change, as well as work with open data in partnership with other third parties. Intelligent automation enables water companies to reimagine processes that include additional data sources, or partnerships with charities and NGOs—then provide a trustworthy audit of activities undertaken.
Priority #6: Mitigate the risk of reputational damage and punitive fines
This priority completes the circle that began with regulatory compliance. There’s a domino effect that happens as water companies tighten up revenues, become more efficient and reduce loss of resources. As a result of taking action in all of those areas, time, money and resources should be given back to the business—and action taken not just to repair and maintain infrastructure, but to avoid the fines that are levied on those companies that simply carry on with business as usual.