Thought Leadership

With a shift toward the delivery of benefits over project outcomes, there is a trend toward a customer centric business model that is reshaping the way the Australian and New Zealand water industry plans and delivers capital. With this change comes the need for capital efficiency and a deeper understanding of value for money and the impact of every dollar invested. However, a concept that many organisations cannot clearly articulate through the value chain driving their business is the line of sight from strategy to execution.

Through the application of data analytics, organisations can make smarter investment decisions, improve confidence in forecasting, and realise efficiencies in capital expenditure. However, as water utilities accelerate their digital transformation and become individually data rich, translating this into action and insight can be challenging and there is a growing need and willingness to look beyond organisational boundaries and further into the industry and across other sectors.

The key to unlocking the potential of data lies in the three key principles of data integrity, quality and availability which provide the basis for a greater level of capital prudency, early intervention, and more accurate budgeting that creates as much as 10% reduction in spend across a capital planning period.

KBR supports water organisations to harness the power of data to enhance decision making through business-wide program management, O&M regimes and asset cost modelling, resulting in a more reliable forecast, reduced variations and more accurate outturn cost.

Watercare provides water and wastewater services to 1.7 million people in the Auckland region and plans to spend $18.5 billion over the next 20 years to maintain and develop a resilient water and wastewater network. Watercare’s supply chain and cost intelligence teams have identified that an improved line of sight is required to prevent budget overruns and increase confidence in its forward plan and has teamed up with KBR to co-design a Cost Intelligence and benchmarking system covering all phases of estimating through to tender evaluation and assurance.

To do this, phase one has involved mining Watercare’s available contract and system data as well as develop fit for purpose data structures, create estimate and pricing schedule templates and establish data capture processes that will allow Watercare to capture, report and visualize asset and internal cost models through a virtual platform.

The system is now live and Watercare and KBR are now scoping out the application of cost models to the asset management plan, the ongoing evolution of platform maintenance and industry benchmarking.

As digital transformation of water organisations continues to accelerate, we’re now shifting our focus to building greater capital plan confidence across the water sector through long term forecasting and comparative industry benchmarking of cost, time and performance to further establish prudent investment decision making in the right project, at the right cost and at the right time.

The intimate partnerships that nurture with water utilities such as Watercare are crucial in exploring the untapped potential of utilising industry lived experience and benchmarking through participation to generate savings in capital delivery spend for the benefit project and organisational success, and for communities.