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22 | 5TH - 11TH FEBRUARY 2016 | UTILITY WEEK Sponsored report BUILDING THE BUSINESS CASE "Utilities – and the water industry is no exception – have traditionally been very conservative, very cautious, and slower than other industries to embrace new technologies. And the regulatory regime has traditionally been very conservative too," says Jacob Tompkins, managing director of indus- try body Waterwise, and former chair of Ofwat's Resilience Working Group. But that is changing, he adds. One reason? In a word: competition. And as new competitors arrive on the scene, bringing with them new technolo- gies and business models predicated on those technologies, the status quo will come under pressure, says Tompkins. That said, it will come under pressure in different ways, and in different places, says Martin Dunlea, global industries lead for utilities at soware giant Oracle. "A lot depends on where in the value chain an individual utility happens to be focusing, and how far along the information technology maturity curve it happens to be," he points out. "Is it focusing on the customer-facing aspects of the business, for instance, or network operations? And is it still running a lot of old-style legacy systems, or has it started to embrace more modern technologies?" Even so, says Susan Furnell, founder at strategy consultancy Furnell Consult, much depends on the rate of consumer adoption of new digitisation initiatives and Internet of Things-based applications. Just because they exist, customers can't be forced to use them, and initial uptake might slow and require traditional approaches to continue operating. "The real way to build a business case is to assume, say, an 80 per cent uptake rate and ask, if I get that, where can I get to? And what can I do?" she argues. "Start with the 10 per cent that you might get to begin with, and you get a different answer, and the danger is that it's an answer that might not persuade a board to make the required investment." can automatically summon a maintenance engineer in the event of a malfunction. Similarly, an app, installed on consumers' smartphones or tablets, provides at-a-glance information on such things as the current temperature of consumers' homes, energy usage, and the present boiler settings, ena- bling consumers to switch their boiler on or off from wherever they happen to be. Again, there are efficiencies on offer. Matt Freeman, head of the operational excel- lence section at consultancy DNV GL-Energy, points to the extent to which maintenance operations – both within consumers' homes, and within utilities' networks – can be made more efficient when devices can self-report the nature of the faults they are experiencing. "It's all about making sure the man in the van is in the right place, with the right tools, equipment and spare parts," he says. "The goal: every service visit is a 'first time fix'." There are efficiencies, too, in network operation, adds John McLean, director of product marketing at energy analytics spe- cialists AutoGrid Systems, a provider of Big Data and Internet of Things-based opera- tional analytics tools and systems. "Basically, the Internet of Things provides utilities with a picture of their networks that is far more granular than anything they could achieve before," he says. "They have a far more accurate picture of the resources available to them, and a far more accurate picture of the demand being placed upon those resources. Previously, demand fore- casting was at the macro level. Now, with the Internet of Things, it can be at the micro level." Moreover, with a network comprising intelligent devices capable of communi- cating with a central hub, a lot of today's Brought to you in association with SERIOUS NUMBERS SPENDING ON TOOLS TO DEVELOP SMART EQUIPMENT USED BY UTILITIES – INCLUDING KEY ENA- BLERS FOR THE INTERNET OF THINGS INTERNET OF THINGS VALUE-ADD BY 2020 Source: Gartner Source: Cambashi 2015 Manufacturing Healthcare providers Insurance Banking and securities Retail and wholesale Computing services Government Transportation Utilities Real estate and business Services Agriculture Other 120 100 80 60 40 20 0 10% 8% 6% 4% 2% 0% Europe, Middle East and Africa Asia Pacific America Worldwide growth 2014 2015 2016 2017 2018 $ million $1.9 trillion 15% 15% 11% 10% 8% 8% 7% 6% 5% 4% 4% 3%