As Severn Trent enters another five-year regulatory cycle, the Midlands-focused water company is working on technology initiatives to lower bills and improve customer service.
Regulator Ofwat sets the rules for all water companies in England and Wales and during the latest control period, 2015-2020, which began in April, consumer bills will have to come down by 5%. Also, Ofwat will introduce competition into the non-household market from 2016 onwards.
While Severn Trent - and the entire water industry - is preparing for a new marketplace and improving efficiency to reduce prices, there will also be a greater requirement to improve service areas that matter to customers, such as leakage repairs, fewer households flooded by sewer water and a reduction in the time lost to supply interruptions.
According to Severn Trent CIO Myron Hrycyk (pictured), the company is now in a position to start making much smarter investments in technology to support these priorities.
“We made significant investments in our platforms and infrastructure a few years back,” says Hrycyk. “Now we are really exploiting those investments and building on them.
“The regulator is steering the industry to constantly improve the level of customer service, so technologies around digital interactions, call-centre technologies and systems that provide a single view of our customers are all key technology drivers for us.”
Read more CIO interviews
- First Utility's CIO Bill Wilkins explains how his firm is using cloud and smart meters to give the big six a run for their money in the energy market.
- Phil Pavitt, the new global CIO of Specsavers, has fixed his sights on helping the high-street optician take an IT leap forward.
- Seven months after taking charge of the IT at consumer goods giant Reckitt Benckiser, CIO Darrell Stein is pushing ahead with a strategy to increase digital revenues to at least 10% of sales.
Monitoring assets effectively
Severn Trent will invest more than £3bn in improving its infrastructure over the next five years. It is therefore crucial for the company to use technologies to collect data on how its infrastructure is working, so it knows where to direct investment and optimise its asset base.
“A lot of organisations that run large asset bases are always looking for ways they can run that infrastructure more productively, ultimately giving customers a better service,” says Hrycyk.
“The two technologies that I see as key to driving the productivity and efficiency that are needed to drive bills down are improved telemetry and technologies related to the internet of things that can pull data back from the infrastructure so we can proactively manage it.
“That way, we can have a lower-cost infrastructure overall and avoid reactive work and outages by managing our assets to keep the flow of water to our customers going, and doing a lot more predictive and proactive maintenance.”
Obtaining more meaningful data about the infrastructure could also help to improve the workflow of Severn Trent's field staff, for example by letting a crew know that another member of staff nearby might have the required tools to finish a job and allowing different ways of looking at an asset fault by pulling historic data together.
“We will be looking at technologies that drive asset efficiency and help us to proactively maintain our infrastructure, and technologies that drive our cost base down or keep our cost base down, so we can pass those savings on to the customer,” says Hrycyk.
Severn Trent already has thousands of telemetry outstations sending messages back to base, as well as technologies that synthesise that data and present it to control centres to inform them of the performance of the infrastructure by, for instance, sending alarms when pumps are failing or when there is low pressure in pipes.
“We have already got that technology in place and it works well,” says Hrycyk. “What we are looking at is how to get more outstations out there to give us far more granular detail more frequently and with more complex algorithms, so we can begin to do far more ‘what if’ analysis and see how we can best re-tune the network to avoid failures and keep customers on supply.”
There is growing demand for staff mobility at Severn Trent, and at the same time, the company is seeking to deploy more mobile tools to help customers, so it set out to deliver a “digital-first” vision, with the goal of an improved customer experience across different channels.
“We mapped out what our customer journeys would be, before deploying the technology,” says Hrycyk. “For example, if they want to look at their bill, how would they want to do that? If they spot a leak when they are out in the region, how would they want to interact with us when they spot a leak?
“Once we analysed what our customers' behaviours were, we started focusing on building apps touching on those specific points in the customer journey.”
It's like democratising IT and getting your colleagues to suggest new apps. The ones that are the most popular are the ones that we build
Myron Hrycyk, Severn Trent Water
Another recently launched customer initiative is the “In my street” website, which is optimised for mobile access and enables customers to find out what is going on at a specific location where maintenance work is taking place - particularly larger works and those that run for some time - providing information on why the company is replacing or renewing pipes and the progress being made.
Hrycyk says the most interesting part of the digital journey has been understanding customers' needs and applying solutions for an omni-channel world, where consumers might start a contact via email, then follow up via SMS, social media or a phone call.
Once the team started to think about the customer journey, the “colleague journey” in activities such as fixing leaks and meter reading began to be considered and the IT team asked staff what apps would make their working lives easier.
“It's almost like democratising IT and getting your colleagues to sort of suggest new apps. They vote on them and the ones that are the most popular are the ones that we build,” says Hrycyk, pointing out that staff and customer journeys often meet.
“For instance, if there's a customer journey that says 'spot and report a leak', that notification can feed down into the colleague journey, which then requests the leak to be fixed and, once the staff member is there, we can start timing the job and that notification can go back to the customer, who then gets the information back on their mobile device,” he says.
Re-engineer the business
“So when you look at these journeys, you begin to see how you can re-engineer your business using digital technology by having customer and colleague journeys that integrate with each other.”
Since the digital-first drive was introduced, Severn Trent has built a range of apps focused on customer needs. It has also developed six staff-focused apps and has about a dozen more in the pipeline.
Despite the focus on app development, the mobility drive at Severn Trent is not new. Since 2010, the company has invested in equipment for its field workforce, as well as real-time applications and an MPLS communications network provided by BT that carries data from the centre to mobile workers and other staff members, including team managers who work in offices but also travel.
The water company is evolving its mobile strategy and rolling out Samsung tablets and smartphones to about 3,000 staff, including field and office employees, equipped with apps developed by the IT team that will replace the company’s Blackberry estate and some laptops.
“We were already in a pretty good place a couple of years back, when we invested in that first generation of mobility,” says Hrycyk. “Now we're really exploiting that with next-generation consumerised devices and then putting these apps out on those devices.
“What we find is that if you give people smart devices, you've got to give them some apps to use. There's no point in just giving them the device and it hasn't got any business apps on it, so we're trying to line up the roll-out of the devices with some of the apps that are coming through the pipeline.”
Enhancing the basics
To support Severn Trent’s innovation and efficiency ambitions, other investments have been made, including SAP Hana in-memory computing provided in the cloud by IBM, which is expected to improve the water company’s metrics and operational reporting and is currently being deployed.
Hrycyk’s team has also deployed other cloud-based applications, such as ServiceNow for the help desk, Concur for expense management and Workday for human resources. The company’s non-regulated business outside the UK has also seen a recent Microsoft Office 365 roll-out.
“We've seen some specific deployments of cloud technologies which are really enabling us to provide high-quality IT services at a relatively low cost,” he says.
“In addition, we've spent some significant time looking at the robustness of our web services to give customers a better service and to enhance our digital offerings. We've deployed Amazon Web Services with the underpinning technology for our website deployments, and that has proved highly successful because it's very resilient and performs very well.”
For customer relationship management, Severn Trent is implementing Microsoft Dynamics for residential customers and is looking into an equivalent product for business customers.
“Strategically, it would be logical to use the same product for our non-household as our household customers because it kind of leverages that platform, but we're still working through exactly what features we need for our [business] customers,” says Hrycyk. “So we haven't made a commitment for Microsoft Dynamics for our business customers yet - that's still to be decided.”
Read more about IT in utility companies
- Crude oil price cuts meant thousands of jobs lost in Norway. It’s now more critical than ever for energy operators to make better use of IT.
- Portsmouth Water has started switching over custom mainframe applications to IFS in a bid to improve data use and customer service.
- National Grid has started a project to supplement its existing asset maintenance system with predictive analytics.
Introducing new priorities such as building apps for staff and customers has also brought a new mindset to Severn Trent's IT department and got the team thinking about different ways of delivery.
“Rather than embarking on large, high-level designs followed by detailed planning, a build stage and then a long test-and-release phase - all of which traditionally takes months - we said, let's think about the end-to-end journey, where that technology fits strategically, where that application might fit in a suite of apps, then let's start small, build it very quickly and simply, and get it out there to be used,” says Hrycyk.
“Then, if it's not the right app and it's not popular, fail fast. If it is the right app and it’s working well, scale soon. That approach proved to be quite successful in getting us to be more agile and innovative.”
Looking back at the IT transformation agenda led by Hrycyk over the last seven years, Severn Trent went through a phase of investment in “heavy lifting” - infrastructure, large applications, simplification of the technology platform - followed by what the CIO calls the “second generation” of mobility with the introduction of change in working practices, before now focusing on enhancing the customer and staff experience through digital technologies. The main challenge of this latest phase is getting things done more quickly.
“The way that the IT capability has had to change - and I've seen it accelerate in the last couple of years - can be summarised in the fact that we've had to become far more pacy, nimble and rapid in our responses,” says Hrycyk.
The new demands drive a “think big, start small” approach and allows the IT department to try things out, and Severn Trent's IT team has responded well to this.
“This wave of technology geared towards the digital customer journey has made IT relevant again,” says Hrycyk.
Does the fact that people in the business recognise the contribution of IT to overall performance make things easier for the CIO?
“All well-run businesses still make sure they spend and invest their money wisely, so we don't have blank chequebooks or anything like that,” he says. “Rather, we have a pretty in-tune executive team that understands the potential of technology and where it can be applied for real business impact.
“Of course, we still have to justify our expenditure, there's no doubt about that, but I've sensed an increase in the pace and the speed at which we go through that process. Plus, the delivery is far more rapid - and I find my fellow executives are very supportive of it.”
Myron Hrycyk was a speaker at a recent CIO Event. The next UK CIO Event takes place near Heathrow Airport on 12-13 October 2015.