Introducing change in water utilities
For many water utilities, there exists a fundamental need to break out of the vicious circle of increasing water losses, decreasing operational efficiency, increasing economic and financial losses, deterioration of the infrastructure and steady erosion of service levels.
It is commonly accepted that promoting change in any organization can be a complex task. This is mainly related to the fact that for such change to happen not only is the alignment of different stakeholders around a specific political, economic, and business vision required, but also the ability to transfer such a vision to the organization’s responsibilities, strategy, objectives, and structure, providing adequate resources and achieving the commitment of the Board, management, and general staff towards implementation.
Thus, it’s not difficult to foresee all the obstacles that may prevent a successful change: the difficulty to build a common vision, the inability to translate such a vision into an action plan with measurable objectives, or the lack of commitment of the organization managers to be involved in a time-consuming and risky process. And these are just a few of many examples.
Nevertheless, sometimes change is mandatory, and it will happen no matter what, either in the context of proper planning and execution or simply because there is a crisis that can’t be avoided, forcing change in a disruptive and usually painful way.
Many paths or strategies can be taken to pursue long-term operational and financial sustainability within a water utility
In the specific case of the water sector, fundamental trends are affecting the way we manage water utilities: growing urbanization, water stress, reduced public financing, growing public scrutiny, and the need to comply with Sustainable Development Goals are only some of the trends that are driving water utilities toward better management and better overall efficiency.
There are many paths or strategies that can be taken to pursue long-term operational and financial sustainability within a water utility. It is well known that one of such strategies is the introduction of projects with scopes of work that require the alignment of several organisational levels and with the potential to change the company’s organisational model. As an example, this could be the case of the introduction of a Balanced Score Card, a new ERP system or the Kaizen method to promote continuous improvement.
When introducing new technologies, it’s important to consider not only the cost but also the difficulty to launch and the benefits
In the case of introducing new projects and new technologies, it’s important to understand and consider not only the total cost of implementation of such projects, but also the difficulty to launch and the probability of harvesting the benefits promised. Only top management can read the organization and understand how such projects should be introduced and sequenced.
The right balance between cost, scope, benefits, and timing can be a powerful leverage to introduce change and move the organization to a new level of performance.
If the need for change is recognized and the right actions are properly planned and implemented, one project that certainly will change the trend in any water utility is the adoption of Performance Based Projects (PBP) aiming to reduce Non-Revenue Water (NRW).
The adoption of Performance Based Projects (PBP) aiming to reduce Non-Revenue Water (NRW) will change the trend in any water utility
The evaluation of previous implementations of such projects not only revealed many success stories but also disclosed that where these projects fail to meet all initial expectations, water utilities didn’t recognize the need to change or weren’t able to work with the new approach, failing to comply with the necessary organizational adjustments or to meet the required service levels.
On the other hand, successful projects emerged whenever water utilities recognized and succeeded in implementing the necessary changes, through new management approaches, work reorganization, revised procedures and methodologies, modernization of IT Systems, among others. All these promoted cultural changes fundamental for long-term (financial and operational) sustainability.
In the case of the reduction of NRW through PBP, such projects will not only address the technical problem of reducing NRW but also promote a new approach to how the day-to-day work is carried out, providing a direction to enable the future success of the water utility and establish the initiatives to ensure its long-term sustainability.
The design of such projects will be based on sound cost-benefit scenarios, aiming to ensure the water utility’s operational and financial sustainability, for long-term periods of 10 - 15 years, ensuring that all investments are made keeping in mind the increase in the performance of the utility.
PBP projects aiming to reduce NRW are based on sound cost-benefit scenarios, to ensure operational and financial sustainability
Due to the magnitude of such a PBP and the resources committed, to ensure the successful buy-in and the involvement of international funding agencies, government entities, or private investment, all these must foresee a change to enable successful delivery of the project. There will not be any takers to invest significant finances in a project where the water utility continues along the same path and a downward slope.
The combination of
- A powerful technical solution to address the complex problem of reducing non-revenue water,
- A common vision among all relevant stakeholders, and
- The commitment of all involved to implement such a solution,
may well result in a long-term transformation that allows a water utility to unlock all its potential and become a reference for good management practices in the sector.
Recognizing the problem of lack of performance is a big step to be taken by organizations and their shareholders or managers
In MIYA we have managed some of the most complex and successful implementations of NRW around the world, demonstrating the relation between such projects and the ability to promote substantial change to ensure the water utility’s long-term sustainability.
It is our wish to see more projects realised and financed by multilateral banks. We believe that the multilaterals should aim higher regarding these kind of projects, as they can bring about the necessary change in the sustainability of water utilities. We have over 15 years experience in the Caribbean, Africa, South Asia and Europe, with proven results; over 9 million citizens have benefitted from our expertise, know-how and efficiency.
Recognizing the problem of lack of performance is in fact the big step to be taken by the organizations and their shareholders or managers. After that, understanding the current situation and a well-designed project will ensure that strategic objectives are met and financial and operational turnaround happens.