How public utility Thames Water fosters digital innovation


Thames Water has formed a digital innovation and technology team to help modernize its legacy IT and assets as it adapts to a new business landscape

Thames Water rig outside Houses of Parliament 370px
Maintenance rig in Thames by Houses of Parliament

Digital innovation is cropping up in the most unexpected places these days. Even a public utility like Thames Water, which supplies drinking water to 9 million Londoners and handles waste water for 15 million, set up a “digital and innovation technology” team six months ago to help it modernize and adapt to change.

The utility faces an important symbolic change from April 1st, when changes in regulation will leave consumers free to choose an alternative water supplier, where previously Thames Water had a monopoly. Demographics are forcing further changes — while London’s population continues to grow, land is at a premium, so rather than building extra capacity, the utility must engage with customers to encourage them to conserve water.

All this change comes against the backdrop of an organization that can trace its history back to the early 1600s. That brings a huge legacy, says Jon Reagan, Head of Digital and Innovation Technology and Transformation Alliance at Thames Water:

We’ve got a huge old legacy of assets — physical and IT. A big old estate that’s really ripe for modernization.

To help modernize that legacy, the utility has signed a long-term contract with four IT services providers — IBM, Deloitte, Accenture and Bilfinger (a process industry specialist) — in which payment is “based on customer outcomes,” says Reagan:

We didn’t want to work transactionally, we wanted a different relationship.

At the core of the vision for this partnership is a commitment to make Thames Water a connected organization, one that’s able to collect data which can provide insight and intelligence to inform the organization’s operational excellence and business growth.

Proving value of innovation

The digital and innovation technology team is an important enabler in bringing this vision to life. Formed late last year, many of its members were brought in from partners, as it’s difficult for Thames Water, based in Reading where it’s in competition with well-known global technology brands, to recruit digital talent. But it has been able to recruit its first ever user experience expert, says Reagan proudly:

For the first time in our history we have a UX person. It’s really transformed everything and made us think differently about things. Having that capability in house is an absolute critical thing for us.

The innovation team’s role is to collect or generate ideas and then flow them through a process to deliver those that show value. Its agile methodology is in stark contrast to the traditional waterfall approach of the conventional IT function. If ideas can’t rapidly demonstrate a business case, they are quickly abandoned, as Reagan explains:

We’ll get a technology, create a prototype, show it to people. If it doesn’t make money then it’s gone. We work in an iterative way to demonstrate value quickly and then refine it.

Demonstrating some quick wins has been a priority for the new team. In mid-February it hosted a two-day digital mashup event that brought together people from across the business. Out of eight ideas that were developed and pitched, one winner was picked and is now in development at the IBM Bluemix Garage in London. A finished prototype is due to roll out to field technicians in the first week of April. That’s an unprecedented speed of delivery at Thames Water, reflects Reagan — to go from concept to field prototype in less than two months.

Reagan gave some other examples of how the team is exploring how to apply new technologies to age-old business problems at Thames Water:

  • Virtual reality headsets are being used to give initial training for safe working practices in hazardous environments, such as working in confined spaces, or setting out traffic cones on a busy highway. Whereas previously the only way to get this training was to go physically into the danger zone, trainees can now put on a VR headset in the safety of a training room to get used to the environment, experience the risks and practise their behavior. The team has also tested using VR to help offshore call center agents get a better understanding of the surroundings that staff may be calling in from when they log a report.
  • Gamification has helped improve the volume and quality of data collection, simply by awarding badges for performance and running league tables. Says Reagan: “We’ve seen a real shift in the quantity and quality of data these guys have been gathering. We didn’t really know how that would work with an engineer workforce but it’s worked really well.”
  • IBM Watson has been recruited to analyze the videos Thames Water routinely takes of the inside of sewer pipes. The cognitive intelligence engine can learn to automatically identify dislodged joints and blockages, which could potentially help improve the efficiency of future maintenance work.

Building this new culture of innovation isn’t without challenges, of course. When recruiting participants for the recent mashup event, some engineers who wanted to bring along their ideas were blocked by managers, says Reagan:

Some of the people who wanted to go, their managers said they couldn’t go — “Your job is fixing things.” Some managers felt this was not the right way to work.

My take

It’s astonishing how widespread the takeup of digital innovation techniques is becoming. Evidently there are still mindsets to change, as people need persuading of the concrete value of such initiatives. But the crucial first step is to get out there and demonstrate that it does work. Kudos to Thames Water for taking that step.

Image credit - courtesy of Thames Water

Disclosure - Jon Reagan was speaking at Cloud Expo Europe.

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