Navigating the digital current: strategic transformation in water utilities

However, insights captured in our recent paper, Ripple Effect: A Movement Towards Digital Transformation, show the most successful digital journeys build incrementally over time, starting small rather than undergoing a radical overhaul overnight. The key is to root efforts in a strategy that addresses real pain points, not just deploying technology for its own sake.

Leadership needs to begin by listening to and understanding the current state of the workforce and their experience. What challenges, barriers, successes and priorities are they dealing with on the front lines? Another foundational steppingstone is for leadership to have a simple and clear picture of where they want to go. What is the target state? What are key characteristics and service level goals that help describe what the organization aims to achieve and why?  A third building block is empowering the workforce to help identify what changes need to be made for “how” to get from the current state to the target or desired state. A fourth building block is focused on quick wins and small-scale pilot projects as a starting point. This helps to boost workforce morale and identify issues and barriers more quickly so that when larger changes are taken on there can be more awareness around how to minimize the impact. This step-by-step approach means less risk with each iteration.

How can utilities use data more effectively to support their digital strategies?

Overarching any digital strategy should be clear business objectives and outcomes an organization is trying to achieve. This helps to ground what data is needed, how frequently it needs to be collected, and how it is interpreted or assessed by utility staff. Utilities often have access to a wealth of operational data but simply collecting data and sharing it across departments does not automatically translate that information into meaningful insight.

Having clear business objectives and outcomes defined upfront helps the utility better prioritize what data is actually important, where there are gaps, and where modifications are needed to transform it into something more actionable. Having clear organizational goals outlined upfront also helps to inform and guide new technological investments and prevent isolated or siloed departmental projects and applications. With the advent of technology and data taking on a much larger role in utility decision making it is crucial for organizations to have a clear IT roadmap and data governance plan that helps them to stay organized, secure and up to date. Having a plan in place helps to identify the exact data sources, types and relevance of different data streams, while crucially identifying any missing, inaccurate or infrequently calculated data sets acting as barriers. It should also help to define QA/QC processes to ensure data is maintained and held to a certain standard over time. 

A third key element to using data effectively is to provide room and flexibility for learning and being adaptable. Having better, faster access to more data often opens new ways of thinking and troubleshooting, which often results in the discovery of expanded needs and further improvement. Allowing staff the ability to have a sandbox and test environments to pilot new ideas and attempt new analyses is a critical element towards digital transformation and growth.

A fourth key element to using data effectively is having a structured feedback loop between the business user base and the supporting IT department and vendors. Users will inevitably run into barriers or limitations as they begin to utilize and work with data, especially as it broadens and becomes more accessible. If a structured process is not in place for how user issues and needs are acknowledged, defined and addressed then the utility will remain limited in their ability to leverage data, which can stunt a utility’s digital development.

What role should pilot projects and continuous improvement play in a utility’s digital journey?

Another critical factor to consider when expanding from pilot to broader deployment is continuous improvement

To avoid issues of overinvestment in the wrong technology or digital transformation for its own sake, utilities should consider thorough pilot testing of any solution before full deployment. Strategic pilot projects allow for the assessment of operational challenges, pain points and opportunities on a limited scale initially, with minimal commitment required. This approach also enables utilities to confirm that selected technologies and digital strategies are entirely practical, tightly aligned to core utility objectives, and importantly, deliver value for the users who must eventually adopt them as part of regular workflows.

Another important aspect of pilot projects is learning. Utility staff members can better understand what they need and do not need quickly. Equally important to underscoring the potential benefits of an expanded roll-out, pilot projects help to avoid costly barriers and rabbit holes. A phrase sometimes used is “failing fast.” 

Once solutions and systems have moved through an initial pilot phase successfully, it is important for utilities to establish clear benchmarks as part of a broader rollout. Specifically, what are key outcomes the business is attempting to achieve that are directly supported by the deployment of the technology? At what point do they anticipate hitting these goals? What does success look like? Without having these benchmarks and milestones defined and managed up front, it is very easy for expanded deployments to lose relevance and waste a great deal of money and time. Another critical factor to consider when expanding from pilot to broader deployment is continuous improvement. It is inevitable that there will be unknown and unexpected curve balls that come up as one begins expanding the deployment of an application across more departments and users. Identifying upfront how to navigate changing user needs and barriers is important.

As digital tools are developed and fine-tuned over time, utilities focused on continuous improvement can look to build on past project achievements and key learnings from inevitable missteps. This improvement mindset also makes it easier to extend initiatives or key features across departmental silos towards common objectives that move the needle on utility strategy.

How can utilities balance advanced technological capabilities with real-world strategic goals?

On paper, many emerging digital tools and solutions available today have very real and impressive expanded capabilities that promise utility managers an enticing world of possibility. However, while this state-of-the-art functionality serves as important motivation, overfocusing here poses a tangible risk of distracting resources away from establishing core building blocks necessary for improving fundamental capabilities. It also begs the question, is my utility ready to apply more advanced technology solutions? What is the right pace of change for technological advancement at my utility?

As part of this roadmap, it is vital that leadership ground their expectations and aspirations from a current state of organizational readiness

These are questions utility leadership should ask at the start of their digital journey. At the beginning steps, it is important to reinforce and implement a structured roadmap that anchors initiatives tightly to concrete organizational goals, key performance indicators (KPIs) and demonstrated baseline needs. As part of this roadmap, it is vital that leadership ground their expectations and aspirations from a current state of organizational readiness. Which people and processes will be affected? How will they be affected? How will the need for this change be communicated? Who will lead the change? Without having a clear picture of one’s current state and readiness for change, it will be difficult for the organization to adopt new technologies and advance effectively.

One business strategy used by some utilities builds around the operational flow of service. For example, for a utility providing potable water, each core function – from source and supply to treatment to distribution – directly or indirectly ties to service. Defining service level metrics such as reliability, quality and cost, to name a few, throughout the expanse of operational functions helps to establish a framework that orients decision making towards a business outcome aligned with how well service is being provided. This kind of framework allows everyone to align on objectives from the same page and can provide a helpful baseline for determining the value and need for different technological advancements.

What lessons have leading utilities shared about key factors that contribute to digital success?

In my experience consulting utilities at different stages of their digital transformation journeys, a few key themes stand out when it comes to those that manage to accelerate and sustain successful adoption:

First, these more digitally savvy utilities show genuine commitment to the process by proactively dedicating internal staff time and management focus to accelerate strategic priorities. They make it a point of empowering internal staff to be champions and agents of change. And this model of empowerment has a ripple effect increasing both the broader morale and speed of adoption across the organization.

Secondly, they tend to have a technology roadmap that builds insight from other leading organizations and trusted technology partners. They seek to understand what different methods and applications are being used to address similar issues and problems they are facing at their utility.

Finally, and most critically, they don't allow the perfect to become the enemy of the good — recognizing that small initial missteps and regular course corrections are not only unavoidable but lead to better solutions. With this self-aware strategic vision and reliable partnerships in place around people, process and technology, today's utilities can proactively overcome common pitfalls to transform operations on their complex path towards increased digitization.