The digital revolution is providing boards with new insights into how businesses are meeting compliance requirements, the level of service experienced by customers and what is happening in terms of the workplace experience that underpins culture. Here, Lucia Cade, Chair at South East Water, looks at the role of technology in meeting organisational purpose and vision, and the balance in defining a risk appetite that supports bold thinking without jeopardising customer, regulatory and legislative obligations.
Ahead of her presentation at the Digital Utilities 2020 conference in Sydney from 19-20 March, Ms Cade explained that 25 years ago, she created one of the first digital models of Melbourne’s sewerage system to better predict hydraulic performance and service levels.
“My career has always involved modelling and testing various options to achieve a service purpose, understanding what parameters have the most influence on an outcome and making an evidence-based recommendation on a course of action,” Ms Cade said.
“This has translated to the way I think about an organisation’s purpose, the strategic options it faces, sensitivity analysis to identify the key risks to an outcome being achieved and the kind of information required at the board level to make decisions.
“Specifically for digital innovation I think of it as another layer of our assets and systems, one that enables us to deliver services in not only a continuously informed way but also provide a more customised customer experience rather than everyone getting the same service in the same way. It supports utilities being better connected with customers and assets, adaptable to customer expectations and differences in service availability, and faster to respond to change.”
Establishing processes and frameworks for technology consideration
According to research by McKinsey, executives would like boards to have more frequent discussions about technology issues and how technology impacts their industry. South East Water is incorporating technology considerations into many of its strategic discussions to ensure it is adequately addressing technology and IT issues.
“We have a digital utility strategy and a roadmap, an R&D strategy and an internal process for identifying and developing new technologies and services,” Ms Cade said.
“Every investment needs to contribute to a better business. We are a monopoly service provider so our customers have no choice but to use us. That raises the obligation on us to perform well, so every investment we make has to improve service levels in ways that customers value and improve operations by reducing costs or increasing safety. Our board is highly focused on this.
“We operate through a lot of partnerships with others to develop and implement new technologies. One example is the team working with meter manufacturers to develop a digital meter as the market was not producing what we needed at an affordable cost. We also provide some technologies and services to other utilities. My philosophy is that you know for sure you have created something of value when other utilities are prepared to invest in and use what you have created.
“The most important things for the board to consider are how technology innovation can improve how we meet our organisational purpose and how to establish the risk appetite for change to provide management with a safe and at the same time, challenging accountability framework. I think about risk appetite as both the safety net and the trampoline, the framework for taking calculated risks.”
Identifying how digital technologies can deliver a better business
Ms Cade said that the key to managing the risks involved with digital innovation is engaging with customers and regulators to really understand the impact of change and therefore be in a position to consider their needs in the change process.
“At South East Water, we talk about technology regularly and frequently. It’s about bringing value to our customers and community, but also thinking about the risks and opportunities in that and of course our appetite for change,” Ms Cade said.
“It feels like digital has always been part of South East Water’s DNA. It’s helping to provide increased access to real-time data, predictive analysis and remote monitoring. This will support greater connectivity between our organisation and our assets and customers, and create efficiencies to help maintain bill affordability and minimise impact on the environment.
“We’ve started to prepare our network for the IoT, with over 10,000 remotely connected assets already sending real-time data to our operations team. This is just the first step in our journey to become a truly digital water organisation and IoT will take this to the next level, increasing the scale drastically as well as the volumes of data that will be transacted.
“We’re also committed to providing a simpler but better customer experience through our digital channels. Examples include our online customer portal, online chat, proactive works and service interruption notifications, and creating online processes to automate things like applying for a new property connection. Enabling a simpler and more intuitive customer experience is top of mind for us. That’s why there are always new parts to the strategy coming on stream.”
How is South East Water creating a better world for its customers?
Hear more from Lucia Cade about how South East Water is implementing new digital solutions to stay ahead of industry challenges like climate change and population growth, and improve the customer experience at Digital Utilities 2020, running from 19-20 March at the Sofitel Wentworth in Sydney.