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UTILITY WEEK | 29TH JANUARY - 4TH FEBRUARY 2016 | 13 Policy & Regulation Market view T he Water Act 2014 outlined plans to drive water market competition by creating a market that will allow cus- tomers to choose their supplier of water and wastewater services. From April 2017, 1.2 million UK businesses will have the right to switch provider, followed in 2020 by tens of millions of domestic customers, if govern- ment has its way. Increased competition gives consum- ers greater choice over which products and services they want to buy, and from which supplier. The changes will require water pro- viders to put the customer at the very centre of their business because increased competi- tion means the consumer can take his or her custom elsewhere if they do not feel they are getting the service they want. For the customer these changes are posi- tive, but are the water companies prepared for them, and can they meet the expectations of customers in a digital first world? One thing is for sure, neither the industry nor its customers want to see a repeat of the chaos caused by deregulation in the elec- tricity industry, with customers billed twice when old contracts were not properly termi- nated or out-of-date customer records result- ing in a far from seamless experience. The proposal for deregulation in the water industry opens up lots of potential challenges for providers in terms of customer experience, as well as data and information management. To avoid disappointing cus- tomers who are looking to switch to gain a better, more customer-centric service, it is imperative that companies get their ducks in a row sooner rather than later. Just as electricity deregulation gave rise to well-known retail brands becoming energy suppliers, it is likely that consumers will consider changing their water supplier to a brand they know and trust. If the choice is a well-known high street retailer with a reputa- tion for good customer service over their cur- rent water supplier, consumers will consider the options that retailer has to offer. But any transition needs to be seamless to the cus- tomer. As Ofwat chief executive Cathryn Ross perfectly summed it up, "customers' priori- ties should be at the heart of water services". Ahead of the April 2017 deadline, and even more importantly the advent of con- sumer services deregulation, water com- panies need to ensure that both their information management systems and the customer experience provisions are suitable for a digital, deregulated world. If a customer does decide to switch pro- vider, this needs to happen digitally within a 24-hour period. Equally important, the current water supplier needs to put in place the sort of customer-centric service that cus- tomers expect if they are to retain their cus- tomer. Historically, the water industry has not needed to worry too much about omni- channel commerce, or online switching and market comparison sites. However, by 2020 these will be the digital experiences that today's water companies need to embrace – or see customers float away in their millions. While we can draw similarities with, and learn lessons from, the electricity switcho- ver, there is one fundamental difference. The UK's electricity system is fully connected on the national grid, making the wholesale mar- ket effective because retailers can buy power from any generator that wants to sell it. But there is no UK national water grid. While a customer may have switched retailer, they will still be getting the same water, through the same network of pipes and services. As retail brands begin to enter the water indus- try, massive, complex, cross-country nego- tiations will be required to ensure that fresh, clean water comes out of the customer's tap, no matter where in the country they live. The result, a very obvious need for clear, accurate and well-defined data management strategies across the organisation, and a business net- work allowing the secure exchange of infor- mation around billing, management, service delivery and wholesale water market trading. If that wasn't complicated enough, as retailers become water companies, they will be subject to the same Ofwat-imposed regu- lations as the incumbent players in the mar- ket. As with any industry that is subject to a regulatory framework, a well-executed infor- mation management processes is vital to ensure compliance to these strict regulations. Be prepared Market Operator Services Limited has been tasked by the government with making the Open Water programme a success by deliv- ering the core IT systems that will enable registration, customer switching and settle- ment between wholesalers and retailers for 2017. Questions over how information about customers is shared with other water suppli- ers, and how that information is secured and managed, are yet to be fully considered. It is important, however, that organisations get information management processes in place now, and that they start to consider how to deliver an experience that puts the customer at the heart of everything they do. The 2017 switchover with non-domestic customers will, undoubtedly, be a test bed for organisations to get ready for the changes in 2020. Those that have embraced a digital first approach, that have their data and infor- mation management systems in order, and understand what their customers want, will have the competitive advantage in 2020 and will handle the switchover like a duck takes to water. Geoff Sheppard, sales director, OpenText Digital exposure Water companies need to get their IT systems up to speed quickly to cope with customer expectations shaped by the digital age – because competition will expose the laggards, says Geoff Sheppard. Key points Competition means putting the customer at the heart of the business. The digital age has raised customer expectations. Water companies face severe challenges in providing a good customer experience. Information management systems need to be fit for purpose. Accurate and timely data exchange will be necessary intra-company and between companies to ensure the integrity of the water supply.