Open Water’s newly published Market Architecture Plan (MAP) provides an update on the current industry thinking around the creation of a retail market for water in England in 2017.
As 2017 approaches, incumbents need to make the right decisions on the various issues raised by the MAP. Which parts of the new water market do they want to participate in? How will their organisational structure need to evolve to operate effectively within the new revenue caps? And how they can position themselves to take advantage of a harmonised Anglo-Scottish water market in the future?
The MAP makes it clear that for water companies to make these decisions, they first need to get an accurate overview of their data – particularly basic information on customers, addresses and services provided.
In fact, the MAP places an unusual emphasis on data quality, highlighting it as an issue that even the CEO and Board need to focus on. In the “Key messages” section at the start of the MAP’s executive summary, we read:
“Companies should already be actively addressing issues… such as the cleansing of customer data.”
“Much frustration can be avoided if a company takes relatively simple steps now to ensure that their basic customer information is complete.”
This makes perfect sense when you consider the preparations that water companies will need to put in place before 2017. For example, if a company decides to separate its retail and wholesale businesses, or even divest itself of one of them, it will need to know what services it is currently providing in order to split out its operations accurately.
Equally, from 2017 onwards, sophisticated market interactions will need to become part of business-as-usual – and these rely heavily on the accuracy of customer data. For example, if English and Scottish water companies need to be able to transfer customers between each other, they will need to be able to provide the right data to complete those transfers without delays or disruption for their customers.
A sensible response to the MAP, then, will be to assess the current quality of customer data and, if necessary, embark on data cleansing exercises to improve it. As an example, Appendix 03 of the MAP refers specifically to a data cleansing project performed in Scotland – and you can read about AMT-SYBEX’s role in that project here.
However, we would argue that simply reacting to the MAP’s guidance on data quality is not enough. Water companies should view data quality as a strategic issue, and look to get ahead of the game instead of just chasing it.
The key point is this: the MAP still lacks detail on the specifications for data-flows between participants in the new open market, because these specifications are still very much up for discussion.
This presents an opportunity: water companies that have a good grip on their own data will be in a position not only to comply with Open Water’s guidance – but actually to shape what that guidance will be.
By understanding what is possible with the data available to them today, water companies will be able to feed back into the consultation process and influence the standards, formats and quality levels that Open Water will ultimately specify.
By aligning the specifications as closely as possible with the data types and structures that are already available, it should take less work to achieve compliance with the new Open Water standards.
Moreover, even where significant changes are required to achieve the goals of Open Water, companies that have a good handle on their data will fully understand the nature and scope of those changes – making them quicker, easier and much less costly to implement assuming that they have the right systems in place to do so.
Utilities companies are used to following the course set by the regulator. It’s much rarer for them to have a chance to influence that course, and even to shape the nature of the destination.
Open Water offers an opportunity for water companies to have a real say in how their industry will work in the future – and accurate data is the key to taking that opportunity.
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