The Impact of AMP 7 on Digital Technology and Water

An Interview with Stephen Green, Head of IT at Bristol Water

by sat down with Stephen to understand how technology is changing the water industry and gain insight into the major challenges that have historically held the sector back. Where is the water sector in terms of its use of digital technology — how does Bristol Water stack up against the industry standard?

Stephen: As a sector, water companies find themselves a little behind the other utilities when it comes to the use of digital — particularly the gas, electric and comms sectors. This is directly linked to the lack of ‘power’ availability associated with Network assets and the delivery of water. Gravity still remains the main force used to deliver water from its source to your home but gaining accurate data and digital insight into that delivery at point of supply is still not robustly available.

With that said, Bristol Water has been historically one of the most innovative firms in the sector. We have always strived for the application of agility when it comes to digital development. For example, during the early 2000s, we were one of the first water companies to adopt a unified ERP system using SAP, GIS and a centralised Data warehouse architecture.

We have an extensive IT partnership with Wipro IT Services — enabling us to manage and maintain an extensive and advanced IT infrastructure base with a relatively small in-house IT team. It also provides us with access to cutting-edge cybersecurity capabilities, something that has become critical to utilities, not least because of GDPR.

We empower our teams to test new ideas independently and are beginning to research the use of techniques such as ‘low coder’ and Hackathon platforms to increase the accessibility of digital innovation and to bring these innovations directly to the people who understand and operate the water supply within the Company. Is the industry changing, what is driving those changes?

Stephen: The industry is beginning to embrace digital technology, not only as a means of driving efficiencies, but to meet customer demand and improve their experiences. The industry has always been customer-centric, but the changes pushed by the regulator as part of AMP 7 have accelerated our focus, investment and will drive a much broader industry interest in innovation as a major enabler.

AMP 7 will come into effect in 2020. This is the 7th regulatory update under the current system of privatisation and Ofwat oversight and brings with it a much greater emphasis on customer experiences. We will be scored by a more broader customer feedback process (CMEX) rather than the traditional metrics based standards around specific Customer contact, delivery, quality, and cost. The new CMEX model is going to operate a lot more like TrustPilot and other commercial feedback mechanisms than the historical regulatory models.

This creates a challenge for us because most of our customers don’t have direct contact with the company. Traditionally, our focus on customer satisfaction has been around incidents and direct interaction — traditional customer service.

The need to look at customer satisfaction from this broader perspective means that we have to look further afield than simply delivering water without failure and handling incoming customer interactions with tact and professionalism. We need to stay on top of customer interests and preemptively deliver services that meet changing needs. This means being clever with data and the generation of insights in order to manage that experience from beginning to end. This requires digital transformation. What are the largest benefits that you can derive from the application of digital technology?

Stephen: The impact of digital always comes back to decisions. The digitisation of processes allows for better extrapolation of data that in-turn build insights that can be used to improve our strategy and ongoing focus and investments. Historically, our approach to change was to sit down and decide what course of action we need to take to resolve issues or make decisions This has approach has already begun to make a 180-degree change. We are starting to undertake digital results based, data-driven decision making and this will grow as we standardise and pool information around delivering business outcomes.

This approach is about creating ‘best practices’. I think this is critical to improvement and the ‘sea change’ that is needed across the industry to catch up with other digitally enabled sectors. The more data inputs we have, the more we can embrace this type of decision process.

Beyond improving customer experiences, the greatest benefit that this kind of decision-making process can deliver is the optimised use of our water supply. If we 10x our advancement, we could make quick gains in efficiencies — be that through automation, the use of robotics or the use of data directly. We currently operate 7-8 million assets across the estate. The impact of efficiency improvements through the use of digital innovations on that level of scale can deliver massive dividends to our Customers and ourselves. Our goal is to systematically leverage technology to make that happen. What are the biggest challenges in the way of digital transformation within water utilities and what is your hope for the future?

Stephen: A lack of standardisation is a major hurdle. Most of the data models used throughout the industry have been developed on a company basis and are pretty much bespoke to each. This creates huge challenges in creating any kind of unified partnership arrangement across the sector for sharing data or insights. We are currently unable to really deliver National level initiatives without relying on huge specific Company level investments required to deal with this non-standardised use of data. The creation of a set of National data standards for Water would provide huge savings to each organization in the longer term but also accelerate the ability to introduce innovation from our third-party IT and Technology support partners.

The critical challenge for any company looking to place data at the heart of their operations is the development of an appropriate and mature enterprise architecture. Enterprise Architecture is becoming a critical component in managing both Strategic and tactical change into the organisation. It can be thought of as the critical backbone of a modern business and without it, business is really unable to manage the cost and benefits of innovation. Enterprise architecture as a concept has to be culturally embraced fully across the organisation with Senior Management support and real localised ownership of processes, systems and data fully embedded and part of the way we work and make decisions rather than something that IT does in a corner. Without both of those things, we will struggle to deliver the digital opportunities and benefits that are becoming available through the use of technology, data and innovation. We will just lurch unknowingly from one opportunity to another.

I think we are in a good position because of our history of innovation and the head start we have had adopting some of these cultural and technical changes locally first within IT. However, we are working within an industry that is stultified and behind the curve in this regard but, I am positive about our own position, the early work we have done and ultimately this will create to better our customers and our own experiences..  

Information Technology (IT) is no longer relevant when facing today’s digital challenges and instead it needs to become a true Information Service.

Stephen Green is the Head of IT at Bristol Water. IT is central to the company’s plan to improve customer relationships, increase efficiencies and security and keep costs down. Leading IT centric innovation, Stephen is creating a data-driven culture that he hopes to see spread across the entire sector.

Bristol Water is one of the oldest water companies in the country — supplying water daily to over 1.2 million customers. One of the few water companies in the UK to have remained in private hands since its founding, Bristol Water has been at the forefront of several technological transformations in the sector.