Making a splash

Transforming the fortunes of the Scottish water industry was never going to be an easy task; after years of neglect, water organizations were running inefficient services and leaving customers high and dry. All this changed with the arrival of Dr Jon Hargreaves in 2002 and the merger of the East, West and North of Scotland Water Authorities into Scottish Water, which now serves five million customers in 2.2 million households. Although a challenging step, the merger was seen at the time as being the only option to secure the survival of a public water authority in Scotland, and so it’s proved: the company is more efficient than many of its equivalents privatized 16 years ago, and crucially, there has also been a marked improvement in areas such as customer service.

“Merging three companies into one was never going to be easy,” Hargreaves recalls as he explains some of the difficulties associated with such a large undertaking – not least the fact that regulatory targets had to be met inside four years of the restructuring effort. “One of the biggest lessons we learnt is that mergers need to be undertaken quickly. We literally ripped the management out in less than six months, rebuilt it and then got on and made the necessary changes to IT, processes, systems and people. At the end of the four-year period, we’d made 45 percent operating cost savings.” Remarkably, this reduction in costs also coincided with a substantial increase in customer service standards – almost unheard of, particularly for an organization in the public sector. “I think the secret of our success was to make sure we had a good team,” he says. “One that is dedicated and determined to the cause of knocking prices down, and improving customer service and value for money.”

The customer is always right

The improvements have paid off, and the fact that there has been a 29 percent reduction in customers writing to the organization with issues this year is testament to the company’s newfound commitment to customer satisfaction – something Hargreaves attributes to its strategy of providing value for money. “What I’m talking about here is offering the highest service you can get for the lowest price,” he says. “There may be companies that might have a better service than us; however, it’s likely you will be paying a lot more for it. On the other hand, there will be companies that are cheaper, but the service will not be as good. We’d like to picture Scottish Water in the upper quartile of service and the bottom quartile of price. This is the direction we are heading in at the moment.”

One of the most commendable improvements Scottish Water has put in place is an emphasis on improving communications with customers. Utility companies generally have a poor reputation for customer service, and horror stories abound of customers hanging on the phone with a query or problem for significant periods – often for an inadequate response at the end of it. Under Hargreaves’ stewardship, Scottish Water has been determined to buck this trend. “We’ve put a huge amount of effort into what we call first-time resolution,” he enthuses. “When a customer rings us, either with a complaint or just an enquiry, we find that a large proportion of these can be resolved by having intelligent people on the end of the phone. Putting a man in a van costs hundreds if not thousands of pounds, so if issues can be resolved over the phone it’s much better for us.”

Improvements are obvious. Resolution rates have jumped from 40 percent to about 72 percent – although in an ideal world, the company would like this number to reach about 80 percent; reaching a higher percentage than this is unlikely as there will always be certain issues that cannot be resolved over the phone and will need actual physical contact with the customer.

The company is experimenting with a wide range of channels to improve communications between customers are the organization. These include e-mail and text. “There is a great need to be proactive and to understand what customers really want from us,” stresses Hargreaves. “They tell us they want better communications, that they want us to get on with the job and to keep them informed about developments. For example, if there’s a burst main or power outage, a customer will ring in to a call centre and there will be a loop message clearly informing them of the situation and an estimated time for when it will be resolved. However, sometimes this isn’t always possible – say a problem occurs in the middle of the night or we get to a job that proves more serious than initially expected. We need to improve our feedback to customers so they know when work is going to take more than ‘x’ hours. Otherwise customers get frustrated, start ringing in again and, consequently, the phone lines get bunged up.”

The value of technology

Certain technologies are also helping to improve the quality of services to customers. The first of these is ‘no-dig’, which avoids the need for roads to be dug up so that pipes can be inspected, repaired or replaced. Instead new pipes can be dragged through old ones. This is good news for commuters whose journeys will be less disrupted by traffic jams caused by roadworks. “We’ve got 45,000 kilometers of pipe in the ground in Scotland,” informs Hargreaves. “A lot of it is 60 years old, while some is even older – parts of the network are 120-years-old. It’s being replaced as fast as we can afford to do it, but it’s a very disruptive process, digging up the road and causing chaos with the traffic. No-dig has made a massive difference, cutting the number of complaints we would have had if we were doing open cut.”

On the software side, Scottish Water has collaborated with Oracle to develop a revolutionary new system called Promise to Resolution. The beauty of the system is that it allows appointments to be made with an hour leeway on either side. So, for instance, if you book an appointment for 10am, the appointment will be guaranteed to be met between 9-11am. “This system makes a huge difference, as it means you won’t have to take half a day off,” enthuses Hargreaves.

Scottish Water vans are also equipped with Bluetooth and GIS systems, which can identify where pipes are and draw up customer information including any problems customers have had previously. This has resulted in a great improvement in productivity and massive savings in terms of cost, with £10-20 million pounds saved in operating costs. ‘Before we introduced this technology that connected man, van and customer, our engineers were doing maybe three or four visits a day,” recalls Hargreaves. “There was a lot of downtime traveling from A to B and not knowing quite what to expect when you got there. With these technologies, they are now able to do twice as many visits.”

High and not-so-dry

A major preoccupation for water companies in the UK this year has been dealing with the devastating floods that have wreaked havoc over several counties. The severe floods in Yorkshire, Lincolnshire, the Midlands and, more recently, Hereford and Worcestershire is a stark reminder of the need for water authorities to be on their guard for such disasters. Thousands of homes were damaged and many people were left without drinking water.

The floods highlighted the need for improvements in the municipal water infrastructure, particularly inefficiencies in storm drain pumps, and also a lack of co-operation between agencies. For Hargreaves, the floods were reminiscent of those that affected Glasgow and Scotland back in 2003. “These were floods that should only have happened once every 130 years but, in fact, happened three times in as many weeks,” he says.

“One of the lessons we’ve learnt is that there isn’t anybody appointed in law to be in charge of these things,” he warns. “When the floods hit four years ago, neither we nor the council had a clear plan in place, we all just mucked in together and got on with it. On the back of this, a report was drawn up that recommended, amongst other things, joining up our call centres through the use of a single number. Consequently, we could handle three times more calls. Since then, we’ve pulled together a much more robust emergency plan. It’s so important to be well prepared and to anticipate the worst.”

One of the major problems caused by the recent flooding was that hundreds of thousands of homes were threatened with the loss of water and power. In one incident, 15,000 homes was plunged into darkness when the Castlemeads electricity substation in Gloucestershire had to be turned off due to rising waters. Elsewhere in the county, there were fears that 250,000 people would lose power and water if Gloucester’s Walham station was lost to flooding. The disaster was narrowly avoided thanks to a massive and costly multi-agency rescue operation, Scottish Water is not taking any chances when it comes to its own disaster contingency planning. “We’re having another look around Scotland,” says Hargreaves. “There are a few supplies, mainly in rural areas, which might get inundated if rivers were to break their banks. Fortunately, because of the topography of Scotland, most of our water treatment plants are halfway up hills as we tend to use gravity a lot.”

Nonetheless, there was an incident last year in Orkney that highlights the need for vigilance, when flooding impacted one of the islands’ biggest water treatment stations, which supplies at least half the population. Unusually high rainfall had contributed to the floods, causing a build up of water behind a bridge. “Normally when this happens, the water is able to pass around the back of the bridge,” recalls Hargreaves. “However, the council had built a wall either side of it and effectively created a dam. This backed up and put 10-foot of water into one of our treatment plants, just like the one in Gloucester. The plant was supplying a lot less people than the one in Gloucester, but nevertheless, we had exactly the same issues. Fortunately, the staff managed to switch the equipment off. It took us about five days to get the supply back on. In the meantime, we delivered bottled water and water in tankers.”

Changing attitudes

According to Hargreaves, there is a desperate need for a change in planning and attitude to guarantee the extent of the flood damage in England isn’t repeated again. “This year has been, in many respects, quite an unusual year,” he concedes. “However, there are a few areas we need to look at to mitigate future threats. First, we need to stop people concreting over their drives; this will allow the ground to soak up more of the rainwater. In the case of this year’s floods, the ground’s soaking ability had been lost because of heavy rains previously, so there is also clearly a need for better drainage. Finally, the other thing that’s essential is that the police take control from day one of any emergency situation. They have the ability to command and direct operations, whereas a civil body such as a water company or council has no real power in an emergency. Such a scenario calls for all hands on deck and to be run like a military exercise – otherwise, in my experience, it won’t work.”

As Hargreaves time in office draws to a close (he is retiring in the autumn), he still has many hopes for the company and is eager for it to continue improving its services to customers. “I would like to see the organization continue to be successful and to ensure that we’re better than everybody else at resolving the problems of our customers,” he says. “Customers are generally very satisfied with us, although there is a still a small proportion that we don’t get it right for. We need to focus on these people. My dream is that Scottish Water is recognized for delivering value for money.”

Infographics:
2.2 million
Households served by Scottish Water
45 percent
Operational cost savings realized by Scottish Water in the four years following its creation from three separate water authorities

“We need to be proactive and understand what customers really want from us”

“Such a scenario calls for all hands on deck and to be run like a military exercise – otherwise, in my experience, it won’t work”