Mobile Systems - Southern Water's (UK) Competitive Advantage

This paper outlines the reasons why field systems should be considered by Utilities as an enabler to assist the Company in improving its internal efficiencies. It looks at the benefits to be gained and outlines the approach adopted by Southern Water in implementing a 200-unit roll out of a mobile GIS system. The paper also identifies the next steps to be taken to deliver additional benefits to the business. The final section includes a perspective from the supplier of the Southern Water System, Procis Software Ltd.

1. Business Drivers
Utilities today are facing pressure from several quarters, all of which result in a drive to improve internal efficiencies. Whether in Europe or in America our customers are becoming more demanding: higher levels of service; better quality of supply; improved responsiveness; compensation if the standards are missed.

The regulators are charged with ensuring the right balance between business profitability and customer charges. Within the UK Water Sector, one of the mechanisms used is that of ‘comparative measures’ and is used in the absence of a competitive market, as each Company has a monopoly within its own area. This approach means that any best practise from one utility company is adopted as the benchmark against which the other companies are measured. Each company is driven to steadily improve its performance in order to maintain its position, in comparison to the other companies, The Electricity and Telecommunications sectors do have more of an open market, but the regulator still plays an active role in influencing the regime within which the Companies compete. The end result from the regulators’ activities is to maintain pressure on the utilities to improve their internal efficiencies.

Shareholders also add to the pressures of a utility company. There is an expectation that dividends will be maintained if not improved year on year. The investors also expect that share value will increase above the rate of inflation over the medium to long term. Given that the customer and the regulator are looking for a reduced charge, the shareholder’s expectations would appear to put the pressure on from the opposite end of the spectrum.

There is a further driver for the Water Industry of water quality. There is an ever increasing set of water quality standards, both in the quality of drinking water, evidenced by the recent legislation in pesticides, and in the quality of the waste water effluent discharges, as seen in the ECUrban Wastewater Directives. For some of these increases in quality standards the regulator has allowed for the cost to be passed through to the customer. More recently the engineering work required to meet the increased standards is expected to be met from profits, not by increased charges to the customer.

All these four areas drive the business to look at ways of increasing the internal efficiency, as one of the few ways in which to deliver the means to address the various external demands.