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2018 preview: Water

Richard Whale

One of the biggest challenges for water companies in 2018 will be the need to improve service, affordability and performance on innovation, driven by Ofwat’s agenda to reposition and promote better outcomes for customers.

Water companies have adapted their business plans and are promoting totex-led investment and integrated supply chains across multiple AMP cycles.

In 2018 the water industry and their suppliers will have to overcome the behavioural obstacles they face when challenged to do things differently.

We have seen several best practice examples in AMP6 whereby water firms have begun to commit to, and benefit from, investment in their integrated AMP6 supply chain and the promotion of totex-led investment.

These examples all share common traits: clear commitment from ‘innovator and early adopter’ sponsors to deliver fantastic customer outcomes; a wider appreciation of business risks (and their interdependencies); and a willingness to remove organisational and behavioural barriers to build on best practice.

In 2018, more and more companies will be adopting this way of thinking and embracing an ‘early majority’ mentality. Those that don’t make this next step in the ‘innovation adoption lifecycle’ will face significantly more challenges in the medium and longer term – particularly given the tougher regulatory drivers the industry will face in AMP7.

Consultants’ challenges

The picture for consultancies is also an interesting one, with the water industry at its most vibrant since privatisation and pressure increasing on consultancies to adapt to emerging client service needs while working more efficiently.

“The past 12 months has seen a significant amount of consolidation across the industry, which will lead to more strategic alliances and greater collaboration”

The outlook for water consultancies in 2018 will depend on the capacity of companies to evolve and deliver smarter, faster and more reliable outcomes in a totex environment.

Atkins, now part of the SNC-Lavalin group, has recognised this need and embraced a digital transformation within the organisation. Digital automation, digital asset management and data analytics strategies are crucial to remain at the forefront of the utilities markets. 

Quality competition

The past 12 months has seen a significant amount of consolidation across the industry, which will lead to more strategic alliances being created and greater collaboration in future.

This investment in long-term multi-client alliancing models will drive higher levels of company co-operation and increase the quality if not quantity of market competition, which will lead to better client outcomes and customer service.

Richard Whale is client director (water) at Atkins, responsible for Atkins’ water sector clients in Scotland, Northern Ireland and the North of England

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