BY Capgemini
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Water Utilities: Technology key in the competitive era

17 Jul, 2017 11:11 am

April's change in the law liberalising England's business water retail industry is transforming the utility sector and driving water providers to focus on creating more customer-centric operations.

England's £8.7 billion-a-year water industry is in the midst of the greatest shake-up in a generation with the introduction of new competition to the business water retail sector.

While wholesale providers will continue to own and operate the water delivery and treatment infrastructure following a change in the law, which took effect from April 1, a host of new water retailers are now competing with established companies to provide water to the business sector.
The move has led many legacy providers to spin off their retail divisions in order to make them more agile and able to compete with the new entrants and has sparked a shift in focus to make firms more customer-centric.

"It is the most radical change in England's water utilities sector since privatisation nearly 30 years ago and has led many providers to invest more heavily into integrating technological solutions to their offerings as they seek to woo clients in the new competitive marketplace," says Paul Haggerty, Vice President, Head of Operational Excellence Utilities at Capgemini Consulting.

Similar reforms were introduced in Scotland almost a decade ago and it is likely that the liberalisation is a prelude to allowing competition in the residential retail water sector within the next 5-10 years.

Margins are tight in England's water industry, sitting between 2% to 4%, meaning the battleground to win new clients is likely to be focused on providing technology-enabled customer service.

Sue Amies-King, CEO of Water Plus

© Water Plus

“Retailers need to be operationally excellent”

How significant is technology in terms of creating a competitive advantage?

Technology is a critical enabler for all retailers. For Water Plus, it absolutely underpins our aim of delivering a right-first-time, accessible, seamless service for our customers.

In a competitive market with low margins, retailers need to be operationally excellent, which requires flexible scalable systems to be able to respond to market developments, a digital-first strategy so customers can self-serve, and innovative use of data analytics to understand and predict customer behaviour.

We have invested in a range of new systems leveraging the power of the Microsoft cloud to create a dynamic, agile infrastructure including desktop, voice, network and collaborative tools using Office 365 and Microsoft Dynamics 365 CRM.

This means we can offer a wide range of flexible billing options and can respond quickly to changes in the new water market.
Digital is a key enabler for the Water Plus brand, which is all about delivering a personal experience in a world of faceless utilities.

Can technology improve your capital efficiency and therefore profitability?

There are numerous ways to use systems and data to improve profitability in water retail. Data analytics are essential to ensure we have the most efficient approach to our processes from meter reading, to billing customers, to cash collection. This helps reduce the cost to service customers, which is essential for a retail business.

Regular analysis of customer behaviour can help reduce bad debt by predicting payment behaviours, customer contacts and, ultimately, the potential for payment default.

Call centre analytics can tell us why customers are calling in real-time, enabling us to establish drivers of dissatisfaction and to pick up any early signs of customer churn.

Real-time customer feedback systems enable us to provide timely feedback and praise to our front-line people and to identify customers who may be dissatisfied, so we can call them immediately instead of waiting for a complaint to arrive.

What other aspects of your operations can be enhanced through digital technology?

Our digital-first strategy is not just about giving customers the ability to manage their water account online 24/7; ultimately there will be a move to online personalisation. For example, using data to compare similar customers' consumption in a "customers like you use less water" kind of way, flagging opportunities to reduce usage.

I FaceTimed a customer last week and he really appreciated the opportunity to have a face-to-face conversation - it felt more personal, more human.

Technology plays a big part in water management, from our billing system which alerts us if a bill is higher than usual, to AMR meters which monitor consumption more frequently to identify unusual patterns, or our Water Plus water audit app, which enables our customers to carry out self-audits.

We've recently added a new web-based technology service to our Water Plus Protect portfolio, which provides customers with flood alerts so that they can take action to protect their premises.

Using email technology, we are able to provide our large key customers and partners with regular updates on market information, service updates and ways to be more efficient. It's low cost, quick to deliver and effective in reaching the audience so it's a win-win for us and the customer.
We are continuing to invest in further online tools for our customers and are continuously improving things behind the scenes to make it even easier for our customers and our people.

How is technology helping utilities switch to a role of retail provider in a competitive market?

Digital communication tools are helping us to educate customers on what's changing in the market, and who's responsible for what. We've produced our "Guide to Water Procurement in the Open Water Market" along with other content, which is hosted online and promoted to customers (existing and prospects) via LinkedIn, Twitter and eNews updates to customers.

Technology is also aiding communications between wholesalers, retailers and the industry with regular updates via email or portals, enabling teams to easily access standard data and information they need.


Sue Amies-King is Chief Executive of business water retailer Water Plus, a joint venture between United Utilities and Severn Trent Water. As Head of Retail at Yorkshire Electricity, she led the company's entry into the competitive electricity and gas markets, while her other previous roles include Business Retail Director at United Utilities, where she established a new Business Retail function in readiness for the competitive water market. She was formerly a director at Aviva Insurance Group where her work on customer strategy was recognised by the Financial Services Awards.
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