First Things First – Let's Talk about Water

Life brings perspective, and when W.H. Auden wrote, in his haunting poem “First Things First”, that "thousands have lived without love, not one without water”, he was not without experience in both. By 1956, Auden had travelled extensively, seen the privations of civil war and fascism in Germany, China and Spain, and was living between Oxford, Europe and New York. However, he could scarcely have imagined the enduring relevance of his words. Water utilities have a challenge ahead of them, and can longer afford to sit back. By 2030, the world will play host to 41 megacities, each with 10 million people or more. Maintaining equality, services affordability and sustainability within them, with water supply at the forefront, will prove to be a major test even within the most sophisticated and forward planning of utilities. So what does the future of water look like, and more importantly, who pays?

Who pays the price?

Water holds several distinct disadvantages within the “utility industry”, if such a term can be used. Firstly, it must be of sufficient quality to be capable of consumption, at the point of consumption. Secondly, its supply and availability is almost always regarded by developed society as a basic and essential part of the social contract, and thus a societal right. Thirdly, and perhaps most significantly, it is almost without exception globally supplied to household customers at a price which is demonstrably lower than the full cost of its extraction, distribution and supply. Preparing for the future will require intelligent capital and operational planning and decision making, a careful eye on how enabling technologies can be brought into mainstream business as usual systems and processes, and a strategy which is both nimble but expansive. 

But first things first, to coin Auden’s phrase. In most water companies presently, staff costs are growing at a faster rate than revenue, with the highest cost growth often found in (predominantly back-office) desk staff rather than field staff, as numbers grow to handle the increasingly complex issues arising and at higher average costs. Price pressure remains constant, with customers and Governments often unwilling to allow the headroom to enable step changes. While it is easy to say that water utilities must adopt digital technology and innovation to slash operational costs and to match higher customer expectations, knowing where to start can be tough if both the customer, and Governments are unwilling to pay.

Technology will shape the water landscape

It is becoming increasingly accepted by most water industry executives that the probability of serious disruption in the industry is low – indeed, it is hard to disrupt an industry where the prices being charged for the primary product are so significantly less than the costs of supply. This is based on the idea that most disruption relies upon an arbitrage of one of more sub-processes within an overall product set, for example the problem of the peak in electricity. Disruptive technologies are therefore more usefully directed towards creation of a counterparty, rather than a competitor, for water companies, and targeted at enabling reductions in costs. 

Enabling technologies, on the other hand, can be applied directly to the business of water to enable reductions in costs or increases in productivity, with the most applicable technologies being robotics in Horizon 1, but with liquid applications, Blockchain and the Internet of Things (IoT) waiting for applicability in Horizon 2 and 3. 

There is of course a difference between what we might term “robotics” and the integration of “bots” into operational processes, the latter being somewhat less “next century” but no less applicable to the ordinary business of cost reduction. Automating tasks such as processing refunds of security deposits for customers, management of time for employees through automated emails and communications, performance of payroll processing on regular cycles and user administration role management in IT, for example, are the quick wins. It is generally held that RPA will be 30% faster than humans to complete, although this is always best validated through process design and system review. 

The next wave – Innovation and Automation

It is the next wave of innovation that will arm the cities of the future. Nano-bots, autonomous operatives and transport will enable new cost and productivity frontiers in asset inspection and maintenance to be explored. This will include greater integration of artificial intelligence into mainstream operations to further enhance robotics and processes. A world where the integration of new dimensions in the operation of utilities, for example, through augmented and virtual realities in maintenance, inspection and gesture control, that will enable entry into confined spaces and under the soil without leaving the boardroom, is already within reach.

Through liquid applications, for example conversational robotics, seamless interfaces with household and adjacent products and services, with multi-cloud applications, water companies will manage customer demand. Eventually, through Blockchain applications, smart wallet applications, smart contracts and cryptocurrency transactions will become more mainstream. These will combine with advances in the IoT through connected homes, reactive sensors and IoT networks that group products and homes through new modes of supply. While water customers are already “digital natives” who expect a seamless digital experience from their tap to their smartphone, most are only now beginning to understand and explore true connectivity and shared capacity that comes with integrated living. 

Water utilities need to evolve with the current, not against it

These evolutions will take place in a changing world. As urbanisation continues to grow to megacity status, it will be inevitable that water utilities will need to assess their centralised systems of water and waste water treatment to determine if or when decentralised treatment delivers better stakeholder value. 

As the numbers of people increase in a city, so too does density in order to enable access to services; Mexico City has around 8,400 people on average in every square kilometre; London 5,100; and Singapore 8,350.  Taking water from what it has been, to what it will need to be, is not the work of a moment. It will require careful planning, an awareness of technology, and a sensitivity to the needs of a network that has been built a certain way, in a certain time, and prior to the advent of a digital, interconnected and changing world. As Auden wrote later, “We can only do that it seems to us we were made for, look at this world with a happy eye but from a sober perspective”. The water professionals of the world would no doubt agree.