Learning Lessons and Future Ways of Working – Blog by Paul Horton & Richard Laikin

A lot has happened in the sector in the month since our last blog was published ‘What now for the water sector

Water companies have done a fantastic job getting on with keeping the network running and ramping up support to vulnerable customers. They have been ably assisted by their many supply chain partners. Over 70% of utility staff are working remotely, and we have seen reports that staff absentee rates have fallen to around 5% from double that earlier in the crisis. There have been much publicised initiatives to support the NHS, such as connecting supplies to the new Nightingale hospitals around the country.

Much of Ofwat’s public focus has been on the non-household retail market with decisions made, in consultation with MOSL and market participants, to address liquidity challenges for retailers and increases in bad debt as a result of the impact of the pandemic on business customers. In contrast to Ofgem, the water regulator has not issued detailed guidance to the companies about what should be considered higher and lower priority activities during the crisis, and other aspects of regulatory performance monitoring and treatment. This still leaves some uncertainty as to how Ofwat will treat the disruption to plans, performance and costs as we come out of the immediate crisis.

In the short term

By necessity, we have seen a massive change in how training, team meetings, employee and contractor communication and recruitment processes are being delivered. Huge swathes of core business processes have been converted to virtual/ digital almost overnight. Expertise has been brought in virtually, site visits are being conducted remotely. The use of remote working techniques using drones, virtual reality and artificial intelligence is proliferating. Rapid adoption of new working practices, ideas and technology, cutting through red tape, has become the norm.

Some supply chain partners and contractors, have reported that the crisis has led to an increase in communication with water companies and Tier 1 contractors. There has been increased visibility of schedules and plans, along with increased co-operation and collaboration in prioritisation, planning and task allocation.

Let’s not forget that some of the new statutory requirements haven’t gone away, for example on cyber-security. Implementing the National Information Security (NIS) Directive has become even more important as remote working has become so prevalent!

As we emerge from lock-down

We don’t know what the economy and working practices will look like once the current lockdown is relaxed – much will depend on government guidelines around social and workplace distancing and on whether there are subsequent waves of infections requiring further lockdowns.

However, water companies and supply chain partners now need to put in place plans on how to operate as they emerge from the immediate situation. Business continuity plans have been tested and challenged by the pandemic. The learnings from this will need to be built on, especially in areas where resilience should be reinforced. This may be around supply chains (for chemicals, for spare parts), strategic stocks and where they are held, and the location and availability of specialist technical staff and expertise.

Many AMP7 projects have been delayed or deferred, and companies will need to decide which projects are to be pushed up or down the priority list. This is an opportunity for companies to re-imagine AMP7 delivery plans and supply chain partners have a major role, working alongside the companies, to develop the best plans, contingency arrangements and working practices under different scenarios.

This is also an opportunity to get ahead on customer engagement for AMP7. Trust in water companies appears to have gone up in the short term and this may be the ideal time for further customer engagement building on the sector’s positive position and asking whether customers’ priorities are still the same as before. The lock-down has also thrown up masses of new data, for example around consumption patterns, leakage, pressure, wastewater treatment inflows, and so on. These datasets could offer real insight for the sector into operational impacts and customer behaviour from this unique situation.

Looking to the future – embedding new practices

The fundamental challenges facing the sector haven’t changed as a result of the pandemic: in particular we still need to mitigate and adapt to climate change – by moving towards the sector’s net zero carbon commitments, putting in place the right suite of measures to manage changing resource requirements, significantly reducing leakage, encouraging lower water consumption, and building more sustainable integrated systems and more resilient wastewater networks.

The opportunity to re-imagine the path to the future is here now, so when money is short should the sector double down and be seen to be doing even more with even less, or is this a chance to refocus on the long term challenges as part of a wider greener, infrastructure-led, response to the crisis?

Innovation-related activities (projects, learning virtually from elsewhere, and working closely with partners including in the supply chain), will be just as important, if not more so, than before. Many innovation projects and initiatives are continuing, but some will inevitably have been delayed or frozen, which means there will be a need for some catch-up.

Looking forward, the utilities will need to work out where to go back to previous practices, what changes to keep, and how to embed more agile innovation and transformation into normal business operations. The sector could be adopting practices and new ways of working not thought possible a few months ago.

The Future Water Association and its members look forward to contributing to the debate as we emerge from lock-down into a new world.

 

                                                                     

Richard Laikin                                                                                Paul Horton
Director, RL Strategy Consulting Limited                                CEO, Future Water Association
Email: richard@rlstrategyconsulting.com                                Email: paul@futurewaterassociation.com

11 May 2020