"Utilities will have to work smarter not harder in order to succeed, with the right digital tools"

Klir has just released the report “Building the Utility of the Future”. How did the idea of producing the report come about, and what is the target audience?

What inspired the report initially was a desire to tell the bigger story about software in water and why getting digitization right will be an existential necessity for the water sector over the next 20 years.

Utilities will have to work smarter not harder in order to succeed, and that means picking the right digital tools and implementing them correctly. This came out of countless conversations we have had advising and hearing from the industry’s greatest thought leaders and really this report is for them – namely utility executives like general managers, IT leaders and those responsible for regulatory compliance.

When most technology providers talk about digitization, they immediately default to discussing a specific aspect of the problem: the role software might play in increasing the life of your assets through better leak detection for example, how to build an LSL inventory cheaply and quickly, or how to manage customer information more effectively, for example. We didn’t see anyone speaking about how all of these problems fit together or the bigger picture of software in water.

You interviewed dozens of staff at different water utilities in the US, Canada and Australia. What are their drivers to adopt digital technology, and what barriers are they encountering?

It’s interesting because we found that digitization is inevitable, even for utilities that don’t make an effort to get rid of paper forms or analogue processes. Digital tools are impossible to avoid these days: even small understaffed rural utilities with no IT infrastructure use computers and the internet to get work done today.

The question isn’t whether they’re going to digitise but how, and one big barrier or obstacle we’re seeing right now is uneven digitization. Leadership in water utilities are notoriously slow when it comes to prioritising new technologies, so instead frontline employees will go off and adopt their own solutions manually, which for large organisations can be a big problem.

Different treatment plants or trade shops might end up using different, incompatible asset management solutions. Or two different programs for budgeting or accounting. Or two different LIMS solutions.

Uneven digitization can create a lot of problems, especially at the administrative level and particularly for managers that have to ensure compliance with drinking and wastewater regulations. 

Why should utility leaders that don't work specifically in IT care about data management? How does it connect back to the bigger challenge of running a utility?

Fundamentally, the problems of tomorrow won’t be solved by yesterday’s solutions. The environment we are operating in is much more complex than it was 30 years ago. The expectations of our customers are also higher. In a world where we have to do more with less, and do it a lot faster, effective integrated data management is critical for continuously delivering safe & secure water services.

Because it’s unavoidable. You need data to make evidence-based decisions, and an increasingly large portion of that data lives in digital systems. Becoming fluent in how those systems work and what those systems can do for the organisation is going to become increasingly important.

It’s difficult to find a function at a water utility that doesn’t need the right data to operate, but I’ll just use compliance as one example. Drinking water utilities need to know that the water they’re delivering is safe and compliant with drinking water regulations, not just assume it. And the only way they can do that is if they’re confident in their drinking water data. You can’t really have that confidence without airtight data management: until you have that, you’re always just assuming.

The importance of compliance comes up again and again in this report — why is that? Why should utility leaders care about compliance?

There is so much that a water utility does on a daily basis — thinking about how to digitise all of it can be overwhelming. We beat the compliance drum because we think it’s the ideal starting or entry point for utilities that want to get serious about digitising and managing their data properly. And the reason for that is that compliance touches virtually every aspect of what a water utility does.

Whether it’s cross-connection control, drinking water regulations, lead service line replacement or construction permits, most processes at a utility are regulated and generate massive amounts of administrative work. We have noticed that digitising, organising and automating that work is the greatest predictor for success when building the utility of the future. Pinning hopes on knowledge platform projects or “everything as a work order” rollouts tend to fail because the system has specific uses and, for teams they are not applicable to, the chasm is too much to cross to get benefit from it.

There are quite a few software solutions that are broadly aimed at utilities. Are there any software-related challenges that are specific to the water sector?

While it’s true that there are some broad similarities between how utilities operate, the fact that water utilities deal with drinking and wastewater makes their work pretty unique on both a micro and macro level. Let’s take the compliance and environmental angle as an example: water utilities must constantly collect samples throughout their system, send them to a lab, and then report the results to a regulator. The data you collect and the processes you have to follow in that kind of environment are pretty unique — you’d have a tough time managing all of them using software that isn’t purpose-built. 

We can look to other sectors for learning in this space. A decade ago finance and tech companies were buying a variety of software tools for almost every business process they could find. Now they are spending hundreds of millions of dollars trying to rationalise & consolidate these down. In software, we broadly look at these periods and say, this is a “roll up” decade or this is an “app for everything” decade. A great example is when personal computers came out first, the word processor was one program and the number-crunching spreadsheet generator another. Microsoft came along and bundled this into the “office” package which resulted in even digitisation of the new modern workforce.

The same is happening in water. Those utilities that buy dozens of different apps for all their regulatory programmes (like backflow or reclaimed water) will be left having wasted a lot of money when they see that platforms like Klir exist and all of this can be done in one system for most of their needs.

How can utilities assess the success of digitalisation efforts, and what metrics can be used to track progress?

A breach in public trust can cost you severely, not just when it comes to rate increases but in terms of public health & liability too

ROI is an obvious one: at the current rate, how long will it take for the software solution you’ve onboarded to start paying for itself through efficiencies or increased revenue? How many hours per week is the solution saving your administrators?

But the more nuanced way is thinking of this like an insurance policy. When something goes wrong, you don’t want to find out you are not covered – this can be a compliance violation or a cyber security attack. The public is entrusting their water providers to manage this task responsibly, and claiming this is being achieved with paper stacks & various spreadsheets just doesn’t cut it anymore. A breach in public trust can cost you severely, not just when it comes to discussing rate increases but in terms of public health & liability too.

Remember to also factor in what you’re now able to do with the hours you’ve saved. When compliance managers don’t have to sort through stacks of permits, for example, does that mean they now have more time to serve internal customers with new permit applications? Are they now able to help with applying for more infrastructure funding and accelerating important projects in the pipeline?

What risks do utilities have when going digital, and how can they be addressed?

This fundamentally comes down to the problem-solution fit. Because the water vendor community is solution-led, providers often talk about the solution first and then look for the problem to solve. It sounds simple, but listening to the actual problem is rare and is further compounded by providers thinking a generic problem is the same across different industries.

A great example again is laboratory systems. The FDA might need significant documentation when reviewing drug approvals, but water is different. The job of the utility is not to create as much documentation as possible, but to efficiently and effectively evaluate if the water services they are providing are safe and secure. They are different things. When a solution provider truly understands what the users are trying to achieve, then they can make the software work for them rather than the other way around. When software is a job that detracts from a user’s day-to-day, that is when software does not stick and you run into problems.