Utility benchmark review a catalyst for transformation
Published in CIO UK
‘Benchmarking study like this is a waste of time unless it is actually used as a catalyst for change and transformation’, according to utilities company IS commercial manager William Sanderson.
Thames Water is using a recent benchmarking review to drive a transformation programme at the utilities company.
The water supplier to over 14 million customers in the London and Thames Valley area has just completed an extensive ‘Value for Money’ study of more than 30 of its outsourced IT infrastructure and support services, driven partly by the need to prepare its business case for the Ofwat 2014 price review process.
“Our view is that a study like this is a waste of time unless it is actually used as a catalyst for change and transformation,” said IS commercial manager William Sanderson.
“The thing about undertaking a benchmark review is that it doesn’t just show up the good, bad and the ugly; it shows up your strengths and weaknesses in comparison with others.
“No company wants areas of relative weakness within their operation so benchmarking gives us a clear and evidence-based indication about what changes need making now in order to see future benefits,” he said.
Thames Water undertook the review to compare itself against a number of European utilities organisations, mostly gas and electrical companies, to find out where it stood with its major IT service providers.
Sanderson said: “Benchmarking can either be a total waste of money or it can provide useful information; it all depends on the granularity. Many studies are spurious because they give you only a cursory view without the kind of detail or nuance required to compare on an ‘apples-with-apples’ basis, with the result that you can end up on a wild goose chase.
Sandserson said that one of the things discovered was that some services had departed considerably from their 2009 benchmark. In the hosting space in particular, Sanderson said, Thames Water was considerably ahead of its rivals in cost to serve, yet even though improvements were made the company was overtaken by its peers in price and service quality.
“We were always well ahead in terms of cost but marginal in terms of service, so we looked at our strategy and the business needs to invest more in our services,” Sanderson said.
“The benchmark was precise enough to enable us to do this.”
Before Thames Water carried out the benchmark, which was conducted by ImprovIT, Sanderson said the company went out to its vendors.
“Good relationships are vital,” he said. “We don’t believe in conducting this kind of exercise without first talking to our service providers.
“For them to believe in the authenticity of the data, it must be viewed as a collaborative project from the outset with full co-operation, sign-off and shared results.
“After all, our IT partners are key to helping us successfully leveraging optimisation opportunities going forwards.”