The water sector is experiencing a digital transformation; for this, it has resorted to technology leaders, including, without a doubt, Indra.
Having addressed such transformation in sectors such as the automotive or the oil&gas sector, Maurizio de Stefano now leads the Water Practice at Indra. This industrial engineer and MBA intends, from his current position, to contribute to a paradigm shift where technology will be key to achieve the long sought-after water resources security.
Question - Mr De Stefano, first of all we would like to know about your career path up to your current position with water practice at INDRA.
Answer - I have a PhD in industrial engineering by the University of Naples, and a Master from IESE. Currently I am a professor of Digital Strategy and Supply Chain expert in the Polytechnic University of Catalonia, where I teach Digital Expansion.
I have been working in consulting for 20 years. Along my career path I have been part of Unisys and Mainframe, until I ended up at Italy's largest consulting firm, Replay, first in the Brazil office, and afterwards as General Manager in Spain.
I have worked in many different sectors and regions of the world, and that has given me a global outlook, different perspectives.
Later on I spent a year in Milan and, finally, I returned to Spain to work for Indra, where currently I am the Director of Energy and Utilities and in charge of Water Practice. Assuming the responsibility for the water practice has been a great idea and is an exciting project for me; unlike other resources like oil or gas, the demand for water will continue to increase and the challenges to meet that demand are motivating.
Indra is the world leader in many areas of Energy and Utilities, and we are using this expertise to apply it in the water sector, growing strong in this market.
Q - How did you end up in the water sector?
A - It is an interesting story. In the 90s I started in a junior position in Italy's national gas and water company, ITALGAS, a huge company that at the time was one of the companies investing the most in IT. My first projects there were related to water and gas.
After 10 years, I went on to consulting for different industrial sectors, particularly for the automotive sector. Interestingly, years later life took me to Energy and Utilities and the water sector. We could say that I have come full circle.
It is an amazing market. In addition to having a strong technological component, which has always interested me, the water sector is not just trying to do business, it is doing something for the planet.
Q - Currently you are the Director of Energy & Utilities and in charge of Water Practice at Indra. What type of business is the company involved in? What are the main figures of the company?
A - Indra is one of the main technology and consulting companies, and a technological partner for the key business operations of its clients all over the world. It is a leading provider of its own solutions in specific segments of the transportation and defence markets, and the leading company in information technology in Spain and Latin America. It has a comprehensive offering of their own technology solutions and advanced, high value-added services, which it combines with a unique culture of reliability, flexibility and adapting to the needs of its clients. Indra is a world leader in the development of comprehensive technological solutions in Defence and Security, Transportation and Traffic, Energy and Industry, Telecommunications and Media, Financial Services, Electoral Processes, and Public Authorities and Health. Minsait is Indra's business unit dealing with digital transformation. In 2017, Indra's revenues amounted to 3011 million euros, having 40,000 employees, presence in 46 countries and business operations in more than 140 countries.
Specifically, Water Practice is part of the Energy and Utilities market, a sector where Indra's solutions have been successfully implemented in the past two decades in more than 140 companies — electricity, water, oil and gas — and more than 45 countries. Currently, Indra's technology enables companies across the world to manage directly more than 100 million customers. Indra has 9 Specialised Centres of Excellence in Europe, Africa, Asia and Latin America. Namely, the company has centres in Madrid, Nairobi, Manila, Sao Paulo, Bogotá, Panama, Montevideo, Prague and Sydney. The company offers solutions for the entire value chain of the sector.
Q - In the specific case of Water Practice, what are your main activities?
A - Since INDRA is a technology company, we focus on Smart Water. Our focus is on consulting and the technology side of the water sector.
Q - How is the water sector dealing with this technological revolution which is changing the business model in many sectors?
A - Firstly, the technological change will make water consumption rise considerably. Not long ago I read that NEXCOM, a Chinese company that produces 40% of the electronic devices in the world, is going to build a factory in the United States that will spend 16,000 billion water litres per year.
This means that our consumption behaviour and the growing use of technology in our daily life will increase water demands. By 2050 we expect a 400% increase in the manufacturing industry.
Technology, initially, is a problem for water. Obviously, the sector, to deal with this growing demand, has no choice but to introduce technology in its cycle. We can already see this in real world examples: South Africa has introduced technology in a critical situation and is seeing a certain return; Israel is an example of the introduction of technology to reuse water for potable uses. We have to learn from these countries. Either we embrace a technological change, or we will have a huge problem which we will not be able to handle.
Q - From your position, do you see a change in public policy and corporate thinking concerning this technological change?
A - Public policies are starting to understand that the introduction and the use of technology are absolutely necessary.
It is essential that public authorities and the private sector join forces for better water management and, above all, understand that technology investments mean a financial return and a benefit for the quality of life of citizens.
The issue is not whether management should be public or private, but that management should be efficient and include high level technology, in order to tackle the major problems we face.
Q - Is digital transformation in the water sector being addressed from a global perspective? Or only specific areas are addressed?
A - We are now at a stage where we focus on different parts of the water cycle; we lack a comprehensive approach. Obviously, the investments required are high, and we are not fully aware yet of the problems we face and the problems that we will need to handle in the coming 50 years. The notion of introducing certain changes is there, but it is still done in a biased way, which is not bad, since not long ago nobody even considered these issues. We are slowly moving towards a more comprehensive approach, something already in place in countries such as Israel or New Zealand.
Q - How are the urban, agricultural and industrial sectors dealing with this transformation?
A - The urban sector is starting to introduce smarter management of the water cycle. The most important part, agriculture, representing 70% of the water demand worldwide, still has to embrace this change. The problem will get worse in the future, given that this demand is expected to increase by 55%. Therefore, it is not feasible to continue with the status quo. Agriculture has to introduce technology to improve the efficiency of water conveyance and irrigation. There are methods, products and solutions to do this.
The industrial sector is another challenge. I recently read an article by Deloitte where they affirmed that the four major industries — automotive, construction, consumer electronics and food — could reduce their waste by 66% if they introduce new technology. We have a large room for manoeuvre to improve how we manage our resources. We need to analyse the cost-benefit balance and the business costs, but, obviously, we must encourage a different production model, because this one is not sustainable.
Q - One of the concepts we hear a lot when we talk about ‘Smart Water’ is ‘Big Data’. Are we just collecting information? Or are we processing and interpreting that information to make better decisions?
A - Indra has many years of experience with Big Data. I think the term is overvalued and overused.
What can Big Data be used for? It is not just about storing a massive amount of information; this information has to be used afterwards for something that is useful for people. For example, there is a solution which, using this technology, allows you to detect the consumption patterns of people or collectives that may be at risk of social exclusion. In these cases, technology is used to help people, which is its ultimate purpose.
Q - Aside from Big Data, there is also a lot of talk about concepts such as the Internet of Things (IoT), Augmented Reality, Virtual Reality, etc. Which technologies have a practical application in the water sector?
A - Virtual Reality, Artificial Intelligence and the IoT will completely change not only the water industry, but in general, our way of life. Introducing the IoT in a water network, having it perfectly monitored with sensors, control consumptions...it will allow enhancing the management of the resource.
Indra has extensive experience in the development of virtual reality projects. We have experience with aeronautical and military simulators, and we are carrying out very interesting projects in the industrial and water sectors.
Currently, we are involved in a project in Asia where we offer the possibility of participating in remote training through e-learning, so we are going from on-site training to virtual training. We also work in disaster prevention and management projects, where it is possible to simulate floods and other extreme events, and design early warning systems.
In addition to Artificial Intelligence, which will entail an important paradigm shift for water management with regards to asset and infrastructure management, I would add two more elements that will have a key role in the future: the experience of the user, which up to know was not taken into account and will be increasingly more important, and digital 3D printing. In this case, Indra is participating in a pilot project where spare parts are manufactured on-site in real time, so that crews do not have to go to the warehouse to get them.
Q - One of the issues directly related to new technologies and which you have discussed in several published articles is the issue of the security of infrastructure. What is the role of Smart Water in this area?
A - I have given several lectures with a very simple and interesting argument. When we talk about introducing technology, often we do not consider that, besides all the advantages it has, it also opens the door to a new problem: putting at risk a precious resource such as water.
Cybersecurity affects all infrastructure considered critical. Attacking water means attacking the trust of citizens. A terrorist group would be happy to carry out a hypothetical attack on the water cycle.
We did a study on the security of the infrastructure that is part of the water cycle, and, analysing it from a historical perspective, we could see that attacks on water supply systems have taken place for centuries. In their time, Leonardo da Vinci and Maquiavelo tried to divert the Arno river to defeat the Florence army; the first thing that Egyptians, Persians and Romans would do in their battles was poisoning water tanks.
It has been done since ancient times and it continues to happen. Nowadays some wars arise from access issues to water resources, and yet in others, water is used as a weapon. The United States Department of Security has prepared a report stating that water is the fourth most vulnerable element in case of a terrorist attack.
As I said before, the water cycle is still the target of attacks, only the way of doing it has changed. We live in an era where the most complex attacks are perpetrated by large organisations with a certain capacity, such as nations, but we cannot rule out that, in the future, technological advances make them more accessible to others.
Q - What projects is Indra working on to contribute to smart water management?
A- Indra has a suite of their own products that provide solutions to the main issues involved in the management of the integrated water cycle. These issues include: network leakage management, which we deal with a 'neural water' system; 'work for management' systems to manage human resources in the field; geographic information systems; and a commercial system which is among the most well-known worldwide with the Gartner magic quadrant.
Q - Please tell us about a landmark project you are working on.
A - Something interesting for us is that we work all over the world. The challenges of water management are different in each region: the issues are not the same in Spain as in the Middle East or in Mexico. We have a high capacity to adapt to the different circumstances.
Some of our most representative projects are, for example, in Costa Rica, where we manage practically all the human resources in the field, or in Sao Paulo, a city with a population of 30 million and complex, large scope projects. We are also developing a commercial system in Peru. In Asia, as I mentioned earlier, we use virtual reality for training, through e-learning. And in Europe, we are working in Italy. We are involved in many projects and we are very enthusiastic about them.
Q - To conclude, since we have talked about virtual reality, let us imagine we are in 2050. Considering everything we have discussed in this interview, how would you like water management to be 30 years from now, and how would Indra contribute to that improved management?
A - I like to think, and I am sure this will happen, that technology will have a key role in the management of water in our planet and our cities. It cannot be any other way.
Technology must be an essential element of a Water Resources Security Plan. This security cannot be achieved solely with technology: it will also require water conservation and monitoring policies.
This paradigm shift will occur when governments and citizens realise that fresh water is not an infinite resource, and so water reserves need to be protected.