Thames Water has been using IT benchmarking service from business consultancy ImprovIT for the last four years to see how well its IT is run compared with other utilities.
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In its latest benchmark exercise, Thames Water measured how changes it implemented in an audit three years ago had improved the cost and quality of services delivered by IT.
"We regularly benchmark our IS services to make sure they are the best," said William Sanderson, IS Commercial Manager at Thames Water.
“No company wants to have areas of relative weakness in their operation, so benchmarking gives us a clear, fact-based indicator about what changes need to be made now to ensure by the time we do our next review in a year or two, we will see further improvements," Sanderson added.
"We look at our position in the market so we can say we're not only delivering IS at a good price in the water industry but in equivalent industries."
Benchmarking is used to enable an IT team to ensure it is providing services that are price competitive and strike the right balance between cost and delivering a good service. But Sanderson warned it can be a waste of money unless it is done regularly.
He said ImprovIT went into a lot of detail, which meant the benchmark took more effort to compile. But the effort was worthwhile.
"You get much more useful, calibrated and weighted information," said Sanderson.
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This information is fed back to Thames Water's IT suppliers, since the company's IT is largely outsourced.
However, he said Thames Water does not use the benchmark as a stick to beat up suppliers: "We would like to deliver significant improvement so we need our partners on board day and they are joint recipients of the benchmark report."
After the last benchmark exercise, Thames Water retendered a major contract.
"We then looked at the effectiveness of the changes," said Sanderson. By comparing the previous benchmark test, he said Thames Water was able to measure whether the changes introduced in the new contract were delivering tangible benefits.
"In one of our service lines, we were well ahead of peers three years ago," he said. "Although the current benchmark showed we had improved, the rest of the market had surpassed us. This was largely because of implementations they had made in new technologies like the cloud."
Sanderson said such information feeds back into the IS strategy: "We focused on delivering a higher service quality which had an impact on price."
But the cost the service does not increase in a linear fashion.
"If you want to improve 10%, you don't have to put in 10% more budget," he said. In his experience, with the right level of budget, an IT service can be improved without a significant increase in budget.
In end-user computing Sanderson said Thames Water invested in using permanent PC engineers instead of contractors to improve the relationship between IT and staff.
"People knew who their desktop engineer was they appreciated that," he said.
The study gave recommendations for optimisation and improvement.
Some service lines could streamline processes to achieve an additional saving of conservatively 4% and optimistically up to 10%.
“It was a nice confirmation to find that based on empirical data, the business decisions we had made and the changes we implemented following the 2010 study had been successfully implemented by our service partner and that the improvements we anticipated were being delivered,” said Sanderson.
Benchmarking will help Thames Water IT as it moves to a chargeback model next year. Sanderson said: "Value for money will come under greater scrutiny under chargeback."