For water utilities looking for new ways to cut waste, reduce costs and increase efficiency, Information Technology (IT) can show the way
Water utilities today are faced with several critical questions. How to have access to sufficient and sustainable water supply? How to manage their resources under stress from over exploitation and climate change? How to ensure that their operations are efficient, sustainable, and able to meet future needs? How to tackle aging infrastructure, ensure regulatory compliance, get better visibility into the risks associated with capital spend? How to grow revenues and satisfy customer demands?
Today, water utilities stand at the point of change where their power sector counterparts stood some decades ago. For a long time, public water supply and urban wastewater treatment and disposal were treated as regulated monopolies critical to public welfare and health, economic activities and protection of the environment. However, water-related services are capital-intensive.
Continual investment is necessary for the expansion of water networks to new areas as well as for the upkeep and maintenance and replacement of underground assets like water pipes and sewers. Moreover, water supply always had a subsidy element which meant that funds obtained from user- fees barely covered the cost of providing the service. As a result, essential capital investments suffered, operations and maintenance took the backseat, service levels fell short of demand and customer expectations.
At the organisational level, legacy processes and systems, poorly skilled and motivated workforce and poor accountability sustained these shortcomings. Inadequate government funding made it difficult for water utilities to cater to the demand for water and sewerage services spurred by economic and population growth. In recent years, climate change has emerged as a significant game change with regard to water quality, quantity, management, and planning.
These challenges have paved the way for the transformation of the water utility sector, through de-regulation, unbundling and privatisation as governments and municipal authorities seek to provide water and wastewater services at a reasonable cost, decrease subsidies and counterbalance tariff increases by efficiency enhancements, improved O&M, and higher revenue for further investments and improvements.
De-regulation and privatisation imply changes in the way utilities conduct their business, with operational and enterprise efficiency the bywords. Utilities have to streamline their business processes for quality improvement and cost efficiencies; improve customer satisfaction with reliable delivery and timely, accurate billing; maximise the use of existing assets, including human assets and comply with industry and environmental regulations. This will require not only the modernisation of equipment, but also better planning, supervision, monitoring and control of all activities related to water production, transmission and distribution and commercial operations, and in the case of wastewater, collecting, treating and disposing sewage and its by products.
In that respect, as said earlier, water utilities are set to tread the same path as their power cousins who have made major gains in terms of productivity, efficiency, reliability and commercial management through the use of modern Information Technology (IT) tools. In fact, IT can show the way to water utilities looking for new ways to cut waste, reduce costs, increase efficiency, achieve higher return on investment (ROI) and make better use of limited resources. For example, enterprise-wide software solutions can help utilities gain end-to-end visibility into their operations, enabling better decision making and responsiveness in critical business areas. Standardised and measurable key performance indicators (KPIs) can help utilities quantify and analyse a range of factors related to process control, compliance, reliability and worker productivity.
Enterprise resource planning (ERP)
Enterprise Resource Planning (ERP) is the first step for water utilities looking to aggregate information from across the various databases within the organisation for strategic decision-making. By centralising the database and standardising the data flow between business functions, ERP serves as a comprehensive management information solution. Simply defined, ERP software attempts to integrate all departments and functions of a company onto a single integrated computer system by automating the workflows, so that the various departments can more easily share information and communicate with each other. It aims to lessen information coordination problems by creating an integrated core of administrative and financial applications for all enterprise functions.
ERP projects also include the automation and standardisation of business practices as a primary component of system implementation. They serve as the means for business process reengineering (BPR) by breaking down barriers between functional departments and reducing duplication of effort to increase flexibility and responsiveness. Some vendors promote ERP as providing entire business systems integration and applications in one package, while others see ERP as providing a business data aggregation across the enterprise through selection of ‘best of breed’ component applications. Irrespective of such distinctions, ERP is now regarded as a must have IT solution for water utilities, helping them achieve key productivity improvements in operational and customer areas through:
- Optimised management of all business activities
- Standardised internal work processes
- Optimal resource management
- Integrated data infrastructure
- A single snapshot of the entire business for effective management information system
Once companies begin their ERP journey with financial accounting and reporting, they seek to extend it to other areas such as customer relationship management (CRM), customer billing, human resources & payroll, projects, material management, which may be provided in one integrated ERP package or as ‘best of breed’ solution.
Enterprise Asset Management
Water utilities operate in an environment where service disruption has to be kept to a minimum. They also have to provide services – water supply or sewerage – in a cost effective and reliable manner. All this can happen only if their assets work smoothly. A definite outcome of the current economic slowdown is greater focus on maintaining and improving life span of any given component in the utility asset structure because funding for new investments is not available at the same rates as before. For utilities, asset management is a critical component of business performance. Enterprise asset management (EAM) deals with the whole life optimal management of the physical assets of an organisation to maximise value. EAM solutions provides all parties involved – asset owners and operators, asset service providers – visibility of asset performance and maintenance issues, which enables more proactive response and rapid correction of concerns or problems that arise. Utilities with EAM solutions are in a position to address collaborative management needs for work, assets, supply chain, contracts, reporting and analysis, project tracking, safety and compliance and document control. In fact, EAM can bolster the bottom line, through lowering the maintenance cost or raising the availability of the asset. New trends include enabling field personnel to use the EAM solution on any type of mobile device, and using smarter equipment on more positions in networks and stations in order to let the equipment do ‘self diagnostics’ to predict eventual failures, and integration with all other mission critical solutions.
Customer management
The customer information system (CIS) is at the heart of any utility’s customer service and billing operations, enabling it to provide a responsive and efficient service to its customers, industrial, commercial or domestic. In fact, CIS has developed into a core economic asset for water utilities. The value of the customer information goes beyond the bill when it is interfaced or integrated with other systems like ERP, EAM, Automated Meter Reading (AMR) and Geographical Information Systems (GIS). An integrated billing and service system provides a single, unified customercentric view across all departments and can provide cost savings in terms of back office functions, technician management and fleet management.
In fact, it can be of major benefit to customer service department, in terms of providing quick updates regarding supply disruptions and restoration management. CIS can be extended to via portals to provide end users with direct access to applications and associated business processes. By providing web access to CIS applications, customers can carry out on their own service requests, status updates, billing inquiries anytime. CIS benefits utilities in terms of increased cost recovery through better revenue collection, better tracking of customers to manage the collection process, reduction in arrears through accurate billing data, processing customer requests quicker. It makes available accurate, consolidated and critically important commercial data for use by management for better control of operations and planning purposes.
Geographic Information Systems (GIS)
For example, if a water utility has a burst pipe leading to wastage of water and widespread disruption, and if the location of the incident isn’t recorded accurately, it can lead to substantial delays in repairing the burst leading to an increase costs and inconvenience for the customer.
In addition, the company might send an engineering repair team to a wrong location. Valuable time is lost and a lot of additional effort is wasted trying to find out the correct location of the burst pipe. By using GIS-based network management system, water utilities can get a single geospatial view of its entire asset base, helping them reduce costs and track performance. By linking GIS with customer service applications, it is easier to identify the location and cause of customer complaints and attend to them immediately. Use of handheld computers with GIS allows utility companies to access system maps, monitor pipes and reservoirs, and pumping stations. Such computers save time in the field collecting information, and just as much time back at the office processing it. The same time could now be spent on other, more productive work. Handhelds also saves time by providing directions to call sites and scheduling information, and eliminates the need for regular trips to the office.
Automated Meter Reading/ Advanced Metering Infrastructure
Automated Meter Reading (AMR) device is essentially a smart meter which automatically collects metering data and transfers the same to a central database for analysis and billing purposes. Detailed water usage data can be collected continuously at regular intervals and can be read remotely via an automated process, with the usage data sent to the utility’s management and billing system. The use of such smart meters improve the understanding of water consumption and flow patterns, track and predict changes in trends and demands, highlight anomalies and identify leaks or other waste minimisation opportunities. Advanced Metering Infrastructure (AMI) starts with smart meters and adds twoway communication between the meter and utility, and between the meter and consumer. This means that in addition to providing readings, the meter can also receive (and often act on) instructions sent from the utility or consumer. The operational benefits of AMR/AMI systems are reduced meter reading costs, reduced costs associated with field visits and customer calls, improved billing accuracy and improved cash flow, improved outage information and response and more efficient asset management and distribution engineering design.
Business Intelligence
Utilities sit on a trove of unstructured information that can be used to make better, faster, more informed decisions using Business Intelligence (BI) platform.
Water utilities can use BI software to create common repositories of data that can be tapped into for effective decision-making in business areas like demand forecasting, asset optimisation and maintenance and customer service improvement. They can use BI to create decision support systems to help identify problems, such as leakages and where it needs to invest in infrastructure and pipe renewal, track the performance of the procurement process and use dashboards to monitor KPIs. BI can be used to deliver correct data, efficiently and the right time, to end-users inside the utility organisation, thereby increasing their productivity. Utilities can also use BI to reduce cost of servicing customers and identify opportunities to market and sell new products and services.
Supply chain management
In the water supply chain, water is both the raw material and the product of final consumption during its lifetime unlike in most industrial scenarios, where the product is subject to processing or alteration. In the case of water, the role of the supply chain is to add value to the product through the processes of abstraction, storage, treatment and distribution in order that the customer, either private or business, receives the product in a suitable condition for consumption. The operational focus on issues such as waste reduction, yield management and updating of networks and facilities meant less emphasis or need for the advanced supply chain tools adopted in other industries. Yet, utility operations have a wide geographical spread; they have to manage a diverse material base, deploy these materials to a wide range of field locations, deal with uneven demand, strike a balance between safety stock and spares inventory. In fact, there is tremendous scope for improving utility performance in the demand forecasting and procurement areas of supply chain management.
To conclude, Information Technology (IT) can play a significant role in equipping water utilities to effectively respond to the transformation underway in their business, by serving as a platform for execution of business processes and as an information base for decision-making at operational and strategic levels.
