Battling the odds: achieving success in adversity

Can water utilities overcome the constraints of their operating environment to deliver meaningful change and added value for customers? Hayley Monks, SVP sales at consultancy WNS, reflects on the sentiment and experiences of business leaders at a private dinner hosted in partnership with Utility Week.

There are few other sectors with the same range of challenges and constraints on success as utilities. Here, a powerful combination of regulation and immovable, essential service commitments mean that options to expand the top line or reap efficiency benefits by slicing the bottom line are limited.

Overlay a hostile political and media environment, and growth, profitability and the ability to invest for transformation can seem illusive at best. And yet, across the sector, energy and water companies have their success stories to share. Through diligent work to adapt processes around hard-baked industry frameworks, replace outdated systems and find new ways of engaging and motivating the people that make organisations tick, meaningful business wins have been made.

This context set the tone for discussion at a Utility Week business leaders’ dinner, supported by WNS, before Christmas. At this event we sought to understand where leaders see the real opportunities to make sorely needed efficiency gains and improve customer experience and engagement whilst their options are constrained by regulation, statutory duties and social expectation.

The discussion was lively and interactive but the frustration was palpable.  The sector and its employees work hard daily to ensure that homes and businesses have clean, safe water and that waste is removed and managed and yet public opinion of the sector, on the back of very public media attention on Combined Sewer Overflow scandals and the headline-making financial troubles are at an all time low.

Combine this situation with a cost-of-living crisis and the challenge for water companies may seem unconquerable.

AMP8 – a new paradigm

All guests agreed that delivery and performance expectation of AMP8 are going to require something really quite different.

Water companies are going to have to overhaul the way in which they think, interact and engage with their customers.  Pressure for change is mounting quickly with the changes Ofwat have made to the licence condition – introducing a new customer-focused licence condition – coming into effect on the 12 February 2024.

The discussion on customer focus continued and how water companies need to proactively engage with their customers. In a commercially competitive sector companies focus on “winning hearts and minds” of prospective and current customers.

“There is considered to be a game changing opportunity to improve customer service interactions, through accurate billing and consistent service levels as well as to enhance water companies knowledge of customers behaviours and needs.” Hayley Monks, WNS

It is a key focus for the Marketing & C-Suite teams. These teams invest in developing and building detailed strategies on how to win prospective customers and retain current customers; something regional monopolies haven’t had to think about in the same way.

But while water companies don’t have to compete for their customers they do need to compete for their support, commitment to the future and help in water management.

In short, investing in a detailed understanding of their customer bases and how to engage with them is going to be key to success in the short, medium and long term.

Technology solutions which can help companies on their way to achieving strategic objectives also gained a lot of airtime during our debate. There is considered to be a game changing opportunity to improve customer service interactions, through accurate billing and consistent service levels as well as to enhance water companies knowledge of customers behaviours and needs.

It was also recognised that technology solutions are not the holy grail of service improvements.  Implementing a new billing system may go along way to improving the accuracy of the customer bills and enabled customer interaction management, however ensuring the system is fully integrated across the entire water company ecosystem, water, waste, field operations, and developer services etc is the real game changer.

“We’ve not been used to advertising and standing on a soapbox and shouting about what we do or what needs to be done. It’s never happened. We’ve always thought that that’s not the right way to spend customers money properly…but things are changing.”

Bob Taylor, CEO of Portsmouth Water was among the attendees at this Utility Week-WNS dinner debate where he shared why he feels his company’s adoption of the disruptive technology platform Kraken provides a strong foundation for AMP8 challenges. Read more here.

For those not going for wholesale systems transformation there are opportunities to embrace targeted technology solutions to streamline the customer operations, improve customer experience and help develop capability in the customer facing and field network teams through assisted AI solutions.

Whilst AMP8 presents new focus and opportunities, the conversation returned to the hostile political and media environment, the structure of PR24 and the continued focus on assets, the need to retain and attract investors and off course the need to take the consumer on the journey of the investment required in securing an ongoing clean water supply into the future.

Time to really think differently; if Carlsberg ran water companies….