SMART WATER REQUIRES SMART PROCUREMENT

Our massively fragmented water utility sector has been built more than half a century ago. Much of this old infrastructure is nearing the end of its life cycle and needs to be replaced. In addition, the growth of the population necessitates cities to provide larger networks of water services. Read More...

Jul 11th, 2017

By Glenn Oliver

The water industry is abuzz with the concept of “smart water” and the many benefits that the concept portends for the water and wastewater utility industry. Essentially, smart water relates to improving a utility’s operational efficiency through the use of new software and other technologies that can detect leaks, track costumer usage patterns, notify customers of unusual spikes in water usage, read meters automatically, monitor the condition of infrastructure assets, transmit asset performance data wirelessly, store infrastructure data, interpret infrastructure data, and provide early notifications of the need to repair, maintain, or replace infrastructure assets. And this is just the beginning.

The smart water movement will bring major changes in the way utilities manage and maintain their infrastructure. It will also bring major benefits. Here are some of the benefits that smart water technologies promise to deliver to the water and wastewater utility industry:

  • Lower capital costs, operational costs, and lifecycle costs
  • Ability to pre-emptively prioritize and manage maintenance
  • Rapid and strategic deployment of resources
  • Increased regulatory compliance and improved service levels
  • Increased reliability of operating assets

  • Ability to remotely monitor and diagnose problems
  • Ability to provide customers with real-time data about their water usage and provide early notification of possible leaks
  • Ability to prevent unplanned service disruptions and public hazards caused by infrastructure failures (e.g., sink holes)

It seems that companies are announcing new smart water tools almost daily. As more and more companies are investing in smart water technologies, utilities are being presented with more new technologies to consider than ever before. However, the water utility industry is a conservative industry that historically has been slow to embrace change and new technologies. In the past, water utilities could wait years for new technology to be vetted by the few progressive utilities willing to be early adopters. This meant that new technology in the water industry would inevitably take many years before it would see even the potential for widespread adoption.

However, in the new smart water era the adoption rate for smart water technologies must speed up significantly. There a combination of factors that will provide pressure for water utilities to move faster in embracing smart water technologies, they include: public backlash over ever-increasing water rates; public demands to see improved operational efficiency and cost-saving measures implemented; droughts; government-imposed conservation goals; ratepayers demanding early notification of leaks (to prevent a surprise enormous water bill a month later); and the need to implement tools with obvious benefits and low down-side risk (i.e., the technology does not risk public health because it does not touch the water). In short, saying no just because a technology is new is going to become harder and harder when it comes to smart water solutions that make the utility smarter, reduce costs, and improve efficiency.

The above factors will also create pressure for utility procurement officials. Before utilities can deploy a smart water technology, the purchasing department has to procure it (usually through a public bidding process). This means that procurement officials (including the engineers involved in the process) are going to have to figure out how to use technology, data, and analytics to make faster yet better informed purchasing decisions. If not, then the whole promise of smart water will never be fulfilled because the conservative culture and institutional inertia will prevent smart water technology from making it through the procurement process.

To meet the procurement needs of the smart water era, water utility procurement officials will need to accept four new realities:

  1. They utility will need to purchase smart water solutions at a faster rate than it has historically adopted new technologies in the past. There is no excuse for a wait-and-see approach particularly when the utility (and ratepayers) will benefit and there is no potential harm to the public water supply.
  2. Data and analytics are going to be key to making smarter decisions and making decisions more efficiently. Today, utilities can research smart water tools that other utilities are buying, what specifications they are using, what prices were paid, and who the procurement contacts are at the other utilities in case they want to perform more due diligence research. H2bid’s infrastructure procurement exchange is one source for this information.
  3. Paper is out, green is in. Paper-based procurement is costly, expensive for all parties, and not environmentally friendly. Electronic bidding is here to stay and will provide a more efficient process for procuring smart water technologies and electronically capturing the data needed for analytics and procurement benchmarking. Paper bidding is going the way of the typewriter.
  4. Those opposed to technology cannot be allowed to impede the modernization of the procurement process. Procurement officials must become comfortable with the data, analytics, software, web-based tools, and other smart, strategic, and more efficient technologies that will be used to enable decision making.

Smart procurement is also enabling new procurement tools. For example, H2bid is developing software that combines infrastructure analytics, energy usage data, and artificial intelligence to make procurement recommendations that may reduce energy costs.

Smart water is an exciting new frontier for the water industry. In order to achieve the full benefits of smart water, smart procurement will be required. This new era will require the water industry to embrace change faster — something that the water industry has not been known for in the past. But over time utilities will see that there is nothing to fear but fear itself. The smart water and smart procurement future is approaching and there is no turning back


About the Author: Glenn Oliver is the CEO of H2bid (www.h2bid.com), a leading source for water and wastewater utility contract opportunities. He has over 15 years of public and private experience in the water industry, including formerly serving as a water commissioner. Oliver is a leading advocate for making infrastructure procurement more efficient in the water and wastewater industry, which drove him to lead the development of H2bid’s exchange to more efficiently connect water and wastewater utilities with vendors and contractors.