Adding value - the water industry's challenge
The water industry needs to assess the challenges it faces to help secure a viable and long-term competitive future. Key drivers around increasing turnover, reducing costs, improving operational efficiencies and developing a sustainable sector for the years ahead, are central to finding the answers. Chief among these are the technology investment strategies needed to manage, protect and mitigate risk to water sector assets and the essential service they provide, says Tony O'Brien.
THE WATER sector has made significant progress since privatisation when the UK was viewed as the “dirty man of Europe”.
In contrast today we have world-class drinking water and a cleaner environment with improved and safer services.
However, the sector continues to face a number of short-, medium- and long-term challenges.
As a key element of the country’s critical infrastructure it has to be mindful of its regulatory obligation to both protect and mitigate disruption to supply.
It must also deal with other major operational and customer-orientated issues that influence shareholder return.
Further pressures include population growth and the associated increase in demand this brings, the operational requirement to manage an extensive infrastructure, the need to act in compliance with Ofwat regulatory controls, as well as ensuring the continued protection of critical assets.
The industry faces real operational risks, but risks that can be reduced through the adoption of an integrated technology-based approach.
And one that is supported through the help of experienced and knowledgeable technology partners who understand the specific requirements of a complex industry.
Driven by issues such as ever-tighter regulatory scrutiny, increasing supply demands, customer service costs and managing the cyclical nature of the AMP spending programmes, water authorities have to deliver more to keep up with expectations. The improvement of costs obtained from technological convergence and the creation of a safe working environment, drive real benefit and add value to the operation.
As stated by Ofwat: “Simply relying on the solutions of the past will not be enough to contribute to deliver the services of the future.
“We need to consider better, more sustainable ways of doing things, and we need to do this now, because new solutions may take a long time to deliver.”
Maximising and improving operational efficiencies also provides a real challenge to the industry.
Asset management, the requirement for high-level protection, the strategic investment opportunities presented by the SEMD Programme, the need for in-house skills, as well as compliance with national regulations, all contribute to the drive to maximise operational effectiveness.
The answer lies in a systematic approach; one that should include the development of a clear technological roadmap to drive a coherent, joined-up and long-term investment strategy – and one that includes safety and security at its core.
Crucially, such investment decisions need to be based on future needs, including the ability to integrate current technology. Sound investment strategies in the SEMD programme can help drive longer-term value, and not just short-term expediency.
From a technology perspective, investments in advanced, bespoke protection solutions that ensure security of supply, have the ability to integrate legacy systems and assist with business continuity will enhance the resilience of the service and improve asset management.
The water industry is facing expenditure pressures across the board. Avoidable costs incurred as a result of loss, theft and vandalism to geographically spread assets, as well as the cost of human intervention, can make a significant difference to improvements in expenditure.
Available answers include more effective surveillance to prevent supply attack or disruption, as well as robust protection systems that can aid efficiency drives and tackle the cost base across the whole estate. End-to-end solutions such as technological convergence support what is a multi-faceted and diverse industry, delivering benefit by way of improved costs through the use of bespoke framework agreements to strengthen the procurement process.
How water companies now choose to address these issues will act as the foundation for future performance. Scrutiny will remain at the forefront of both stakeholders and shareholders.
Whether it is mitigating and protecting against high profile terrorist attack or developing the everyday protection of critical supply, through to consumer confidence and service-orientated issues such as the influential Defra scored reliability of supply, the future business sustainability of water companies is dependent on strategic technology investment decisions in key areas.
Adopting new technology, which enables access to and interpretation of essential data, as well as effective risk management strategies, are essential elements in the creation of a sustainable future for the sector. Indeed, technology solutions already in use in many other public and commercial sectors are yet to be exploited in the water industry.
Protecting and reducing the risk of disruption to essential water supply and services is obviously paramount to all water companies. As indicated, even low level intrusions onto sites – many of which are in remote locations – can be disruptive. Attacks on assets such as water treatment plants can also interrupt vital services and result in a loss of public faith, not to mention a heavy regulatory spotlight.
The development of technology protection strategies such as electronic safety and security solutions to protect people, processes, information and assets, forms the basis of the extensive work Siemens Building Technologies already undertakes across the water sector.
By working in close partnership with utilities and helping companies to develop migration strategies so the benefits of new technology can be enabled, alongside the preservation of original system elements, Siemens is supporting a number of water companies address the operational, protection, safety, compliance and future planning issues they face.
Mindful of SEMD requirements, we have a specialist team whose primary role is to invest time and resource in understanding the particular drivers of a sector which delivers a unique service the nation relies upon.
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