No longer is the old adage that “water and electronics don’t mix” entirely true. Ever since the need for digital technologies dramatically accelerated in early 2020, businesses worldwide have invested heavily in digital transformations that overhaul legacy systems, upgrade cloud and data capabilities, and enable stronger, future-proofed customer services. The water industry is no different.
highly dependent on technology. Thousands of electronic sensors help to monitor blockages and highlight flooding risks, while advanced data collection systems track water quality and deliver tailored services to vulnerable customers. But in today’s tough economic landscape, marred by utility shortages and record price inflation, there’s even more pressure on companies to deliver resources, meet targets, and secure returns on investment.
Unleashing digital potential
Continuous investment into digital transformation is likely to be relied on by water companies to navigate these challenges while keeping profits high. “Companies are now looking at how they can stimulate growth and generate efficiencies at scale as a result of these investments,” says Ross Sleight, Chief Strategy Officer, EMEA, at CI&T, a global digital specialist. “They want to know how they can get the most out of their strategies, platforms and teams, and how they can best operate as a business in order to do that.”
Yet the traditional structures of water companies may be inhibiting this growth, with one reason being that silos exist within different functions. “In most businesses, digital isn’t actually ‘owned’ by anyone,” adds Sleight. “Most of the time there are lots of different departments involved, with each seeing digital differently.”
For water companies to overcome these issues, they must cultivate alignment between the different stakeholders of digital transformation, including commercial, finance and technology teams. “If you ask a chief marketing officer and a chief technology officer what digital’s role is, you’re likely to get different responses,” he says. “You need a series of clear strategies and agreed objectives shared among the organisation.”
The other, perhaps even larger, challenge holding back water companies is the way in which they run digital operations. “We talk a lot about moving from a project to a product mindset and approach,” explains Sleight. “All businesses want to be more agile, but for this we need to set clear objectives and build a multidisciplinary team, including everyone from technology, design, legal and compliance, to meet those objectives.”
According to Sleight, it’s crucial that the customer is at the core of everything. “Teams need to empathise with customers’ problems and needs, ideate potential solutions and then prototype and test them,” he says. “Operating in a product mindset means teams will consistently meet customers’ actual needs rather than what the business perceives as customers’ wishes, which is often the outcome of a project mindset.” Sleight continues: “Adopting a product mindset means businesses are forced to break down the silos that have held them back up to now.”
The next generation of water
Once water companies reach this mindset, they can maximise the potential of the underlying technology in which they’ve already invested, and even add to this infrastructure with newer innovations. In particular, intelligent and adaptable water tech could be game-changing for the sector and its AMP8 compliance. From upgraded water treatments to ultra-accurate flood risk management, data collection across geographically disparate locations to the better delivery of services for all customers, the possibilities are limitless.
In fact, industry regulator Ofwat has established a £200 million Innovation Fund, aiming to ‘grow the water sector’s capacity to innovate, enabling it to better meet the evolving needs of customers, society and the environment.’ Water companies can enter competitions and earn funding for initiatives that do just that. The scope of the fund is simply another demonstration of the importance of digital transformation in the water sector.
Ultimately, success is dependent on a product mindset. “Working in a product mindset demands agility. In a project mindset, time is spent creating vast requirements documents aimed at providing visibility. Still, in an agile product mindset you get to transparently see progress and validation as the products and services evolve, which provides far more visibility and risk mitigation.” He asserts that this can also help minimise risk by keeping stakeholders aware of, and involved with, each stage of development.
According to Sleight, some sectors are already working via a model that keeps the customer at the core of every decision, while others are lagging far behind. “The industries that have sorted this are the ones that were forced to undertake digital transformation early on, such as media, entertainment and retail,” he says. “They are all now in the post-transformation world, working in a fundamentally different manner than they were 10 or 15 years ago.”
The importance of a partner
Generally, water companies still have a long way to go. However, there are clear signs of progress. In 2021, United Utilities committed up to £270m to analytics, control and monitoring platforms to drive digital transformation and improved customer services. And in January 2023, Thames Water created a swathe of new job roles for tech experts and digital specialists, aimed at accelerating the company’s journey towards digital intelligence.
These digital projects are often most successful when external perspectives are involved. End-to-end digital transformation partners like CI&T can help shift organisations away from their traditional, legacy operations and focus on realising the tech-powered benefits of new ways of working. “We are generally brought in either by commercial departments to solve a very user-centric problem or by technology to scale engineering or platform efficiencies,” says Sleight.
“We can bring a bird’s eye view across the business and their silos, which clients often can’t do because they are focused on their silos’ requirements and their own ways of working. Our job from a strategic perspective is to understand how the user can be put at the core of the business, and how we can begin to help orchestrate success through collaborative teams working in a product mindset across the business.”
Water companies that establish agreed-upon digital objectives, and pivot their operations towards making these objectives a success, will maximise their existing investments into digital transformation while benefiting from a truly customer-centric business. “Though regional monopoly water companies don’t have to worry about losing customers, working via a product mindset still helps to deliver faster, greater value to customers, which ultimately leads to a stronger C-MeX score and higher outperformance payments,” says Sleight.
CI&T partners with some of the UK’s key utilities companies, and some of the world’s biggest brands, to craft digital products and solutions that fulfil the customer needs of today and tomorrow. With over 6,500 experts across strategy, product, research, data science, design and engineering, discover how we can accelerate your digital transformation, too. For enquiries, contact Rebecca Crook, Chief Growth Officer, EMEA at rebecca@ciandt.com
