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Chris Loughlin, Chief Executive Officer Delivering unrivalled service Success in the new world of water March 2017
Chris Loughlin, Chief Executive Officer
Delivering unrivalled service Success in the new world of water
March 2017
© Pennon Group plc 2017
Industry undergoing unprecedented change
2014 Water Act
Most significant change since privatisation
Progressive introduction of market forces
De-regulation / Competition for Non-Household Retail
Further de-regulation ‘Upstream Reform’ 2020
PR14 facilitated its implementation
Wholesale and Retail segregation
Consolidation within sector
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Philosophical shift • primacy of customer relationship
- customer engagement
- outcomes
- totex and ODIs
• greater use of incentives
• risk based reviews
• focus on market mechanisms
Legitimacy • sharing out performance equitably
• ‘nudge’ regulation
• ‘regulation’ by social media
• board governance
Challenging the investment proposition • RPI vs. CPI
• non-household deregulation
• RCV ‘carve out’ – water resources and sludge / direct procurement
Unprecedented change
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Unrivalled service Customers at the heart of everything we do
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Unrivalled service Paradigm shift
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OLD MODEL NEW MODEL
• reactive to customer issues • customers as our quality control
issue response information share engagement
Customers at the heart of everything we do New model for customer service
• reaching out to customers • proactive – one step ahead • understanding customers
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Unprecedented change Themes in the new world
Resilience • short / long-term
• multi-dimensional
• environment / assets / companies
Innovation • integral to everything
• supply chain engagement
• source of competitive advantage
Customer focus • reaching out
• beyond engagement
• wholesale / retail polarisation
Investment case • attractive investment proposition
• predictable / transparent
• wholesale / retail polarisation
Efficiency • affordability / vulnerable customers
• imaginative solutions
Partnership working • solutions with / by local community
• holistic solutions
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Innovation Digital delivering business solutions
Customer data
Asset data
• engagement
• research findings
• infra
• non-infra
• third party
Business / operational intelligence
Services tailored to
customer needs
Identifying vulnerable
customers
Informed decision-making
Right decisions, right time
iSCADA – alarm intelligence
Machine learning / AI
Reliability-centred
maintenance
Innovative business solutions
Business
Intelligence
dashboards
Virtual tours /
augmented reality
Automated processes
BIM models
Drone / aerial
outputs
Mapping
Real-time reporting Data web portals
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Innovation Digital interface with customers
Website
Social media
Mobile apps
Rich media (video etc.)
Chat service
Digital underpins ‘unrivalled service’
Engaging on customers’ channel of choice
Requires real-time information
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Partnership working Solutions delivered by/with local community
Partnerships to protect the environment
• catchment management programmes (Upstream and Downstream Thinking)
• initiatives with councils, conservation groups and other parties (e.g. BeachWise)
Community partnerships
• affordability initiatives (e.g. CAB)
• joint working with stakeholders (e.g. housing providers)
• new ways to engage
Supply Chain partnerships
• ‘virtual utility’
• permeable supply chain delivering innovation
• source of competitive advantage 10
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Resilience Ability to anticipate, absorb, adapt, rapidly recover from a disruptive event
Many dimensions – current and future
• whole system / infrastructure / climate change
• financial
• public support / legitimacy / customer affordability
• corporate
• governance and decision-making
Resilience is about risk and mitigation
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Efficiency Business critical
• affordability
• supporting customers in vulnerable situations
• imaginative solutions
• lowest cost provider in a changing world
OFWAT INDUSTRY RORE(2)
COMPARISON 2015/16
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Reflections on success in a changing world
• public health and sanitation – basic human right
• legitimate to treat as a tradable commodity?
• customer engagement critical to success
• integrated supply chain
• community-based RCV model
• emergence of regional infrastructure providers
• virtual utility?
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Customer of the future will be...
More individualistic...
...but more focused on the values and ethics of businesses
They will live in a climate of expanding choices...
...so will want more integrated services
Tech-savvy...
...and will expect the same from the companies they deal with
They will expect straightforward, convenient communication...
...with companies that understand their needs
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...So the ‘Utility of the Future’ must be...
Pushing all the ‘frontiers’
• reaching out to customers
• continually innovating – digitally enabled approach
• working in partnership with communities
• delivering efficiently – maintaining legitimacy
• flexible and resilient in a changing world
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Chris Loughlin, Chief Executive Officer
Delivering unrivalled service Success in the new world of water
March 2017
