EY - Where does the money go?

Where does the money go?

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This article first appeared in Utility Week on Friday, 17 January 2014.

To continue making efficiency savings, water companies need to take a holistic view of their business that allows them to see total expenditure (totex).

Looking at recent submissions for PR14, the current price review, it is clear water companies are following a common path as they strive for operational excellence.

The best performers

The best performers will be able to change and unlock benefits faster and more effectively. Opportunities for this can come from improving a number of areas, from failure incidents in the field, to paying too much for power because equipment is run at less than optimal times.

Before any organisation can consider significantly changing its operational model, there must be a senior leader determined to make this happen. The main barrier to change is that people have been doing the same thing for so long that they become resistant to change. However, there are increasing external influences coming into play over the near to medium term that start to force the hand of change.