Tapping into digital as Severn Trent Water faces a post-monopoly world

Profile picture for user slauchlan By Stuart Lauchlan October 20, 2015
Summary:
Severn Trent Water is facing up to the loss of its monopoly status and that's driving its focus on digital transformation, internally and externally.

Sarah-Bentley
Sarah Bentley

Although the talk around the emerging Industrial Internet is beginning to address the imbalance, the utilities industries often get overlooked when it comes to discussions around digital transformation, none the moreso than the water industry.

A regulated monopoly in the UK, the water industry can seem at times to have done little to break away from its roots in the Victorian pipes that run across the country. But in fact, digital technologies are about to play a major role in what’s set to be the biggest overhaul in the sector that there’s ever been.

Sarah Bentley is Chief Customer Officer for Severn Trent Water, where she is responsible for Household Customers, Group IS and Group Transformation. Severn Trent was formed in 1974 as a regional, state-owned water authority based in Birmingham, with responsibility for water management and supply, and waste water treatment and disposal, in the catchment areas of two of the UK’s largest rivers - the Severn and the Trent.

The third bit of her job title is the one that’s going to come to the fore in the next few years as externally-enforced legislative changes bring with them internal changes to the operating model of the utility. Bentley says:

There is a huge transformation going on.

We have a short window of luxury as we are a regulated monopoly. None of our customers have any choice at the moment about who their water provider is.

But in less than a year, we are moving into shadow operation for our B2B customers and undoubtedly that’s the regulator testing the idea of competition in the market.

We’ve all observed what’s happened in the energy sector as competition has come in. So we have this window in which to get ourselves out of monopoly mindset and into customer-centric.

That’s why, despite owning responsibility for digital transformation, Bentley is Chief Customer Officer rather than Chief Digital Officer. She explains:

My role is to put the customers at the heart of the business, which is why, quite deliberately, my title is what it is.

Strategic thinking

Bentley argues that there are three distinct aspects to Severn Trent’s digital thinking:

Firstly, how does digital show up in the way that we interact with our consumers?

The second piece is around our colleagues. I am honoured to work with the most delightful set of salt-of-the-earth people who work 24 hours a day, 365 days of the year, to make sure that you can have the ignorable luxury of knowing that stuff is going to come out of your tap and not kill you and that you can flush your loo and the waste gets taken away and safely returned to the environment.

This is a very manual workforce, literally digging the roads and unblocking your poo from the loo. Helping then on a huge journey to be digitally savvy is enormous. There’s a lot of excitement and also a lot of fear in terms of what that means for their career and their future.

To get that workforce digitally-enabled is a work-in-progress, she admits, but there have been successes:

Since I joined we’ve rolled out smart devices to all our field force. This has revolutionised the bricks that they used to take around and then had to enter stuff into spreadsheets. That’s got its challenges. My two nightmares are battery life and connectivity. When you’re serving Shropshire, all the mobile operators can say what they like, but there are a lot of dark spots out there.

Buying the actual Samsung or Apple or whatever it is is quite straightforward, but then there’s a whole journey of two things.

Firstly, just helping people to use technology that they’re never used before. We’ve got Genius Bars rolling out with these devices to help people practically to use this stuff. All of us probably have some settings on our smartphones that we don’t really know how they work. This is not an elitist thing about people in cities know how smartphones work and other people don’t.

Then practically-speaking the other thing is how do you get the data to them in a way that’s visually engaging and they can interact with? Culturally, how do I get people enlightened about all the data that’s around them that’s interesting? So how do I get a culture of an organisation not just digitally-savyy, but properly valuing data and data quality?

So if I’m out on a job doing X, there are many other customers, pipes, networks and manhole covers that I could solicit information about if that was easy to do. Partly it’s skills and technology and partly it’s about just making things easy for people. But if I can’t fix connectivity, I’m dead.

The third element is aspirational on a grander macro-scale. Bentley declares:

We’ve also got a huge part to play as a regulated monopoly in the Midlands. We talk about Silicon Valley and Silicon Roundabout. I am determined to get to Silicon Ring Road. There’s a huge opportunity. There are some amazing educational institutions in our region, but a massive lack of digital skills and technologies. If we can embrace helping our workforce to transform to a digital era, we can also play our part in our area.

Industrial thinking

But inevitably it’s the Industrial Internet that offers up the ‘sexy’ potential for the utilities industries. Bentley argues:

Think about that fact that we have 150 water treatment works, 47,000 kilometers of clean water pipes, we serve 1.8 billion liters of fresh water to our customers every day. and we’ve got over a thousand waste treatment works.

What we are doing with your poo is deeply fascinating, not just returning it hygienically but there is very little wasted waste, whether that’s toilet paper being recycled or the gas-to-grid where we take poo and turn it into electricity and gas that you can use. We are a leader in this space. Harnessing the waste we produce is fantastically critical agenda. We are so blessed in the UK to have the resources of water that we have, but it’s a luxury that we can’t take for granted.

So there is a lot of innovation and technology that we can put into place for global benefit of billions of people who don’t have access to clean water. There’s a huge opportunity, whether that’s through telemetry or just advancements in digital technology, to optimize the supply-chain, from stuff falling out of the skies to be returned to the environment in most optimal way possible.

There are clearly some internal and external challenges ahead, as Bentley notes, although despite the forthcoming regulatory changes, the competitive landscape is different to other sectors that have faced digital disruption to the status quo:

In retail, we have a huge shift of culture, systems, processes to move from monopoly mindset to competitive mindset. We have time to do it, but too early to say if in retail space [our] size is helpful or not. It’s certainly got its challenges.

On the distribution side, it’s unlikely that full competition will come to the network. Who’s going to come along and lay tens of thousands of kilometres of new sewage pipe? Competition will come at the periphery, with energy treatment or water sources.

She concludes:

As we deal with our Victorian pipes, I don’t think anyone is waking up and thinking, ‘Where is the next Uber?’. But having watched his happen to other competitive, more digital sectors, there is a very nice opportunity to look at what’s going on out there and say, ‘What if?’.

But most of those tens of thousands of kilometres of pipes were designed and built by the Victorians, so they're not very digital at all. We have incredible opportunity across all spectrums of this quietly forgotten sector.

Sarah Bentley was talking at the London CDO Summit