Timely advice for Three-Waters investment management

yearbook 2022 Timely advice for Three-Waters investment management

Replacing analogue with digital systems has already enabled companies to rise but now digitalisation offers more significant step changes

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.

A new report by the Global Water Research Coalition, 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.

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, says co-author Dr Greg Ryan, Director of Business Excellence at the Water Services Association of Australia.

Data becomes a strategic asset

Unsurprisingly, technology is identified as a major enabler, and the report gathers input from the Coalition’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.

“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,” says Dr Ryan.

“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 enterprisewide systems referred to by Dr Ryan allows full integration of singlesource data that can be meaningfully interrogated and converted to information for decision making.

The 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. “In a capital-constrained,

post-Covid world, it is becoming increasingly important to become more efficient and deliver high quality customer service,” says Dr Ryan.

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”. 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.

Digital security

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.

The report outlines how digital utilities integrate their business units, including asset management, business processes and customer service

Procuring for Digital Water

The report discusses opportunities such as the UK Government’s ‘Digital Extracted from a Global Water Research Coalition report prepared by coalition partner the International Water Association