How the Water Industry Learned to Embrace Data
The water industry is using digital technologies and analytics to derive more value from its physical assets, but, like all businesses, it has faced challenges when trying to transform the roles and mindsets of their employees and their internal- and customer-facing processes. Employees, for example, weren’t quick to change old habits, and, when there were IT problems, many began to question the data. But those that have managed to integrate these elements — People, Processes, and Technology — have created more than data; they’ve also created value for their enterprises and society.
The water industry is using digital technologies and analytics to derive more value from its physical assets. The need for this sector to change and evolve could not be greater: The organizations that manage water supplies around the world are facing critical issues, and water scarcity is chief among them.
Because of changes in our lifestyles, including increased consumption of grain, meat, and cotton clothes, growth in water consumption per capita has doubled over the last century. And demand is increasing. According to a 2016 report from the UNEP-hosted International Resource Panel, water demand will outstrip supply by 40% by 2030. During the same period, according to the World Economic Forum, water infrastructure faces a huge $26 trillion funding shortfall. If not addressed, water scarcity will squeeze food and energy supply chains, and stall economic growth.
To help solve this problem, organizations are using digital technologies and data analytics to improve leak detection. According to the World Bank, the world loses about 25-35% of water due to leaks and bursts, and the annual value of this non-revenue water — water produced and lost by utilities — is $14 billion. Organizations are also using these tools to improve maintenance, infrastructure planning, water conservation, and customer service (including repair efficiencies and pricing).
Although members of the water industry have found success using digital technologies and analytics, they’ve also faced challenges when trying to transform the roles and mindsets of their employees and their internal- and customer-facing processes. But those that have managed to integrate their technological advances with two other key elements — people and processes — have created more than data; they’ve also created value for their enterprises and society.
People: Good leaders know that using and interpreting data is not only a search for insights; it’s also about enlisting the hearts and minds of the people who must act on those insights.
The challenge is that employees are used to doing things in a certain way, and aren’t always quick to change. For example, despite the social and efficiency value of using predictive analytics to preventwater leaks, many utility managers view themselves as heroes for responding afterthe leak has occurred. As one U.S. executive explains, “Most current practice is to wait for the service-failure event and judge performance by reacting to it, because the utility doesn’t get credit from regulators or the media for preventing leaks that the public doesn’t know about.”
Regulatory incentives often exacerbate this behavior. In many parts of the world, the increased operational and infrastructure costs are simply passed on to consumers. In other regions, however, (e.g. Australia, Israel, the U.K.), regulators steeply fine utilities for inefficiencies – and it’s no coincidence that a number of utilities in these countries have been leaders in adopting new digital tools.
But even with proper incentives, there are still challenges. For example, many U.S. utilities have installed smart meters — an investment that can easily surpass $60 million in cities with 150,000 water connections, or about 15% of average annual utility revenue and water rates.
