The impact of digitalisation on the water sector – An interview with Rebekah Eggers

The Internet of Things (IoT) technologies like data analytics, cloud computing, augmented intelligence and blockchain give us new capabilities to analyse, automate, correct in real time, predict and minimise risks. They have the power to help water and wastewater utilities address many of the challenges they face, including extending the life of aging assets, reducing leakages, attacks or other abnormalities in the distribution network, improving water quality monitoring, service levels and reliability of supply, promoting water conservation, or increasing revenue through operational efficiencies. While there is an increase of digital adoption in water, the sector still lags behind other industries in integrating new, smart technologies into the whole water ecosystem. We asked Rebekah Eggers, IBM’s WW IoT for Energy, Environment, & Utilities Business, and keynote speaker at the IWA World Water Congress & Exhibition 2018, what ‘going digital’ / ‘digitalisation’ really means for the sector, how to overcome key barriers to successfully digitise water, and ultimately, who can reap the benefits of this technological revolution.

 

The digitalisation of water is no longer optional, what will be the major impacts on water utilities?

New technologies have the potential to deliver significant outcomes in the water sector. As technology capabilities advance, so does our ability to collect information from remote devices and correlate that information across diverse systems to help us achieve near-real time situational awareness, or leverage augmented intelligence to interpret an array of structured and increasingly unstructured, text based or sensory data.  Cognitive analytics lies at the heart of the ability to derive actionable value from these data and execute or automate the next best action based on predictive and prescriptive data science. It seems that these technological advancements will have a major impact on utilities, but that’s the easy part.

Utilities can be proud of the reliable services they have been providing for over one hundred years, but not much has changed over time in terms of operational tactics. The real impact of digitisation is tying new technologies to reimagine business processes and facilitate their adoption across the enterprise.  A recent IBM Institute for Business Value Study titled, “Who’s leading the cognitive pack in digital operations?”, highlighted the fact that even in leading organisations where core operating functions are well on their way to reinvention, both strategy and execution is lags.  Further companies are struggling to keep up with the talent demands resulting from ‘digitisation.’   Specifically, there are three key recommendations.  First, secure executive buy-in, devise a digital strategy with action plan and stick to it!  Second, build the technological foundation by ensuring you have the basics in place to support future growth.  And third, focus on business imperatives and communicate quick wins and pay-offs to tie the investment in digital to outcomes that support the strategy you outlined with leadership in the first step. This will position us to drive the digital agenda in water rather than having it imposed on our utilities.

 

  The real impact of digitalisation on the water sector is the wholesale reimagining of business models, enabled by today’s advanced technology

 

Are there lessons we can learn from other sectors?

Private sector infrastructure delivery is a promising space to examine for best practices and lessons learned around optimal project delivery models.  From a digitisation perspective, the energy sector is a great proxy. Over 10 years ago, they began with smart meter deployment. Today, over 50% of the US and European households are “smart”. Those electric and gas utilities started raising the question ‘how do you really obtain the value of being ‘smart’?’ Water utilities can benefit from the lessons learned and the established best practices all the way from deployment of those smart devices to benefits realisation. There’s also the potential for leapfrogging, since technology has evolved, the prices for smart devices have decreased, and the functionality has increased.

Another great space to explore are areas where network infrastructures have already been deployed by municipalities or the electric and gas utilities, this is now a place where water utilities have the potential to elaborate the project and pay back on investments that have already been made in the region by the people who are the constituents adopting those services in the areas.

Private sector water utilities, such as Thames Water and members of the Intelligent Water Network in Australia, are already leaders in the digital space and active in sharing their successes leveraging connected devices, AoT, and machine learning.  This digital transformation powered re-imagination of our sector will enable a broad spectrum of outcomes from improved efficiencies to optimised asset management across providers and maybe even new business models such as consolidated multi-utility retail operations.

 

What will be the big digital water trends over the next decade?

Digital water is really about setting the foundation for utilities to begin applying data science and augmented intelligence techniques to business problems, so this virtual representation of the water system will enable situational awareness or near-real time flow and quality monitoring, which has great potential to solve many of the challenges faced by the industry. We’ve seen improvements in event- response times by 20%, increases in work reutilisation by 25%, 15% reductions in energy use across the network and other benefits across the value chain, specifically in the area of asset management. Most utilities today have an EAM (Enterprise Asset Management) or CMMS (Computerized Maintenance Management System) in place that helps them with network execution. Over the next decade or so, I foresee that all utilities will take that next step to moving from time-based to condition-based maintenance, so by adopting the ability to understand the effective age of their assets and then forecasting potential failures, utilities will be able to identify and schedule massive improvements in life extension maintenance activities as well as strategically plan for their replacement in their long-term asset plan. There’s probably a third area of progress enabled by cognitive or augmented technologies. We’re already able to use video imaging and pattern recognition to review and analyse images. If we consider the area of asset management, the ability to process images captured during a normal inspection process enables speedy identification of anomalies and defects by matching patterns to images that were previously analysed and classified. That will allow us to identify hundreds or thousands of defect models and create those using cognitive technologies that have been trained by human expertise. I’m really excited about that in the application to leak detection, water quality management and asset assessment.

 

  We are in a far better position to understand conservation requirements in times of drought thanks to accurate groundwater resource modelling or conservation habits.

 

Green innovation around agriculture is an emerging area in which the IoT is making huge progress by digitising the supply chain for the production of coffee beans, for example. Farmers are getting paid appropriate prices now for their products whereas before, none of the processes was being tracked properly. From a water-stand point too, we can use weather data to predict the amount of rain that is going to come onto the land, so we can help farmers better manage the amount of harmful chemicals that they put into the soil and then ultimately run off into our drinking water sources, so I think that’s an incredible application. At the same time, we can use technologies to help those farmers come to the market with prospective buyers, because we can notify the latter which sort of crops are coming to market in advance. This example also reveals that building trust is a critical factor in spreading adoption of technology – farmers need to trust the data that we’re bringing to them and see the benefits that they can reap on leveraging this or that technology or system.

Finally, I must call out the discipline of resiliency or disaster preparedness which is on the rise in terms of critical focus.  We live in a time of increasingly frequent and severe floods and droughts, and as such water utilities and cities are looking for ways to become more resilient.  Losses due to disasters from natural and man-made hazards including floods, storms and the impacts of climate change are mounting and on average cost governments over $300 billion USD globally each year.  For example, the Rockefeller Foundation has made an important investment in this space with the 100 Resilient Utilities initiative.  IBM has partnered with the United Nations to publish a Disaster Resiliency Scorecard which over 200 cities globally have used to assess several aspects critical to anticipate, mitigate, prepare for and recover from the effects of a hazard in a timely and efficient manner including the policy and planning, engineering, organisational, financial, social and environmental aspects of disaster resilience.  We have further modified the scorecard and applied to the water, electric, and gas utility industries to set a current state baseline and future state near and long term aspiration in strategy planning.  Furthermore, companies like Cloud to Street are contributing by monitoring flooding likelihoods and impacts in real time, helping to avert the human and economic costs of flooding, as well as assist in the aftermath. We are increasingly seeing smart storm water systems that leverage existing infrastructure. Also, we are in a far better position to understand conservation requirements in times of drought thanks to accurate groundwater resource modelling (Hydromodel Host), for example, or conservation habits.

 

  The most significant barrier to adoption of digital technologies in the water sector is the diamond water paradox, which is to say that even though water is an essential element of life, diamonds are more ‘valuable’ in the marketplace. 

 

What are the main barriers to adopting digital technologies in water and wastewater utilities, and how can those barriers be overcome to accelerate full digital integration?

I think the most significant barrier to adoption of digital technologies in water is the diamond water paradox, which is to say that even though water is an essential element of life, diamonds are more ‘valuable’ in the marketplace.  Water is considered a commodity and in many places a ‘right.’  For that reason, critical investment decisions go unfunded year over year, contributing to the aging infrastructure challenge and new ideas around digitisation are considered a luxury or would require immediate pay back in order to gain approval for implementation. Further, the fragmented nature of the water and wastewater utility value chain strand decision making, restrict funding pools, and strangle business cases.  Some of this stems from regulations which, traditionally, are barriers to innovation. Other stakeholders, such as employees and technicians and/or unionisation are naturally resistant to change.  But most stakeholders, including regulators, utility employees, and the communities they serve are thoughtful and can understand the benefits of digitisation, there’s so much that will need to change to truly adopt these technologies, and we’re making small changes along the way.  One imperative is to bring the stakeholders into the discussions earlier, encourage more collaboration and consideration around what’s the ultimate vision that we’re trying to achieve, and that will help us to get there. Having conferences like the IWA World Water Congress are great to foster collaboration and open discussion among all stakeholders involved.

 

Will we see new, more agile competitors to established utilities disrupting the sector?

There’s been this strong feeling that these big mature companies are on the defensive in risk of being disrupted by start-ups and digital challengers, but that belief actually ignores a built-in competitive advantage that is not easily replicated or leapfrogged by new comers. There’s this statistic that says that only 20% of the world’s data is publicly available; the other 80% is behind firewalls. This realization gives rise to an era for business that we’re calling “incumbents strike back”, where those organisations that own 80% of the world’s data and the direct interactions between consumers and producers are essentially best positioned to dominate the market and create these new business models that will lead to a successful digital transformation of a utility.

In emerging markets we will continue to see more and more creativity and new business models. There will also be a proliferation of onsite treatment and reuse in new high-rises etc., as well as greywater recycling (at some point). “In-function” recycling will also emerge (sinks, showers, etc.). But where centralised utilities are now, there they shall remain.

 

What will be the effect of these transformations on the “digital” consumer?

I can understand the perspective that the digital transformation is happening to consumers and believe that it’s up to us to ensure that with any changes there is a communication strategy in place to bring all “digital” stakeholders, including consumers, employees, regulators, ecosystem players, etc. in the digital transformation.  On the other hand, I would suggest that the digital consumer is actually driving the change to some degree versus acting as a recipient of it. Customer’s expectations around sustainability are driving behavioural changes in traditional utility practices, and this concept of consumers as prosumers is widely applicable to water. Some consumers already participate in water conservation and reuse as prosumers, and they will be able to do that more and more as utilities digitise, making smarter decisions about how they use and reuse their water. At the same time, consumers are also coming up with innovations. I’m reminded of the 7th grader from Denver who decided that it was silly to have to wait so long for lead testing so she built herself a sensor to test the amount of lead in water and she won a science award for her innovation and, even more exciting, she’s in the process of commercialising her idea.

 

We’re hearing a lot about blockchain technology and its potential to enhance trust by creating transparent supply chains or trade of water rights in water markets. Where do you see it can be most beneficial for water utilities?

There is a wide ranging hope for blockchain. An area where I think it could be interesting is in addressing the problem of drought. Think of the potential of blockchain credits for proving efficiency measures. If utilities could prove that they are being more efficient, they could earn blockchain credits and this could create a market with the shifting of water and drought situations that could affect real change in behaviours, because there will be a monetary reward for being more efficient and that is definitely something that IBM and our partner ecosystem are exploring today in proofs of concept and trials.  Other more advanced use cases include, cybersecurity, water rights trading, smart contracts and settlements, peer-to-peer trading, and capital raising.

 

Will cyber security become an issue for water utilities?

Cybersecurity is already a concern today and the risk is increasing. Historically, the water utility control systems were not designed with security in mind, and while this alone doesn’t make them vulnerable, considerations must be made when you’re digitising an existing system with older applications and tools. Network intrusions have long been a concern for utilities as well, because they’ve had processes in place for many years around the protection of personally identifiable information, and that’s something to remain to be concerned about. Increasingly, there are threats around the critical control systems, especially those that control water flows, so treatment works and dams come to mind immediately as security and safety threats.

 

Looking at 2030, what will be the big question water-related professionals will need to answer with regards digitisation?

When you start talking about new technologies like augmented intelligence, cloud, and sensor technology from the standpoint of a water utility, many of them are still struggling with reports that are on paper, so there’s a long way to go. It’s not IBM that’s going to come in and digitise a utility – it takes an entire ecosystem. There are already incredible innovation partners, incubators across the world who are making huge advances.  On the flip side, I worry about what will happen if we don’t move quickly enough.  The water, energy, food triad is real and at our current pace of growth and consumption water scarcity has the potential to grind food and energy supply chains to a halt impacting economic growth.  To accelerate the pace of change, the real question is how we can help these innovative incubators establish the foundation and use the power of IBM as a strong, mature, trusted company, to become providers for these water utilities, while helping the latter to adopt these technologies. Our current focus is really about establishing that backbone that can enable the trial and testing of these technologies, and accelerate the results that we’re obtaining. We’re just getting started, so let’s work together to drive real change in this world!

 


 

Meet Rebekah Eggers and other creative thought-leaders at the IWA World Water Congress & Exhibition, 16-21 September 2018. Register now!

 

Marta Jiménez

Communications Officer
  Marta has been working for IWA since 2015 contributing to develop communications and content strategies for IWA’s key thematic and programmatic areas. Marta has previously worked in development organisations with a focus in strategic communi... Read full biography