Digital Transformation — Why Utilities Need an End Destination

The digital transformation of operations and systems can create substantial value for water utilities. With this significant potential, however, utilities often make errors when it comes to why and how they’re investing in certain technologies — leading to disappointing returns on investments. Below, I share my thoughts on how utilities can start their successful digital transformation journeys, including:

How utilities can avoid starting a digital transformation journey with no clear destination
A look at the technologies that utilities are currently focusing on
The problems arising from investing in the wrong technologies
How to start small, but with larger end-goals in mind

Digital transformation: Why utilities need an end destination

Digital is really important right now in the water sector. “Digital water” is the buzzword that everything revolves around. Of course, utilities need to start their digital journey somewhere. What I’m witnessing, however, is that many are starting the journey without a clear destination in mind. In some ways, this creates problems since a lot of effort and resources are going to be invested in their digital journeys — yet the results will not always follow suit. For this reason, it’s extremely important for utilities to carefully consider their end goals, have a clear idea of what they want to achieve, and evaluate the strategic goals they want to obtain before they embark on digitalizing the utility.

The technology that utilities are currently focusing on

The technology landscape is continuously changing, and I would always separate the discussion between hardware and software. The most common example of hardware we see is AMI-driven smart metering to gather significant amounts of data from end users. Pressure sensors and water quality sensors have also been remotely deployed, which continues the trend of SCADA data. In terms of software, digital twins are the “hot concept” right now, since they provide a real-time understanding of what’s happening at the system level. At the same time, I think there are a lot of decision support systems based on artificial intelligence engines which means that utilities have a lot of options to choose from. The trouble is that utilities don’t always have a clear idea of what technology they need and why.

The problems arising from investments in the wrong technology

Right now, we’re seeing a lot of investment in water technology that is sometimes being supported by the administrations. A good example of this is Spain, where €3 billion is going to be invested in digital water in the next few months. The problem I often see, however, is a lack of clear, strategic thinking when it comes to applying digital solutions. There’s a lot of investment in hardware — usually smart meters — and I think that one of the problems that this can cause is that when there’s no return on a large investment, it inevitably creates doubts in the medium-term. While this investment will generate an enormous amount of data, there’s often no clear plan for what the data will be used for. Investments in this type of technology are not one-time investments. For example, in the case of smart meters, these will need to be renewed in a few years and eventually replaced which will represent another significant investment — and without a plan, utilities can’t expect to see a return on investment.

Advice for utilities embarking on their digital journeys

Whether digital “kicks in” or not, I think that water management remains the same. The ABC is to first have a clear strategy in mind — What are your strategic goals? Where do you want to be in 10 years? From there, utilities can design an effective digital plan to achieve those goals. Some utilities also don’t have a full understanding of the potential of these new technologies. In those cases, utilities could pilot schemes of different technologies — both smart meters and a digital twin at the same time, for example. Doing so can help these utilities evaluate whether they want to reduce non-revenue water or improve operations, and scale up from there. These smaller investments can give utilities a much clearer idea of where they want to go next. Digital water technologies like Qatium are a good option for this kind of incremental implementation. It’s a free, open-source solution that utilities can scale into a much more professional solution that can cater to all of their needs. To wrap up, utilities need two things for a successful digital transformation journey: A very good understanding of what they want to achieve, and to start with small investments with the intention of continuous growth.