The industrial internet - a key theme for success at PR19?

Barry Middleton Water Sector Specialist, PwC United Kingdom

Can Industrial IoT technologies help water wholesalers drive the next generation of improvements in the next asset management period?

When it comes to managing assets and driving the next generation of improvements, utility companies can gain inspiration from industries such as aviation and manufacturing in how to leverage emerging fourth industrial revolution (4IR) technologies.

Deploying emerging technologies that have already been tried and tested can not only help water wholesalers get the most out of their previous investments - it can also help them prepare for Ofwat’s 2019 price review (PR19) and improve service and reduce costs.

We have witnessed significant change in the water sector during the past decade, and this trend is set to accelerate with PR19. The regulator is raising the bar around the quality of business plans it expects from companies. “We want companies to produce high-quality, ambitious, and innovative business plans, pushing forward the performance of the sector as a whole and stretching the boundaries for delivery and efficiency.” 1

A significant wave of investment in the 1990s in telemetry and SCADA reflected a steep acceleration in service and efficiency in the water sector post privatisation. Since then, operational technology improvements have been largely incremental during each asset management period (AMP). However, outside of the utilities sector we’ve seen a seismic shift in the availability of new technology just in the last AMP period – and the landscape continues to evolve quickly.

The emergence of cloud computing, machine learning, predictive analytics and smart sensors is bringing about a new paradigm in managing and operating production lines, networked assets, logistics and interactions with customers. These capabilities can be built on past technology investments, and opportunities are underpinned by an increasing scale of data and the need to undertake more sophisticated predictive and prescriptive analytics.

Our research 2 shows that 72% of organisations believe that emerging digital technology - like Industrial IoT, smart sensors, location detection, 3D printing, and mobile devices - will be a core part of their operations in five years. A further 83% believe data and analytics will be the foundation of this change. Yet this requires significant improvement, given that only 14% of organisations at present have a cross functional data and analytics capability.

We believe that these new technologies provide water wholesalers with a significant competitive advantage in analysing and driving insight, automating asset monitoring and work scheduling, and enhancing systems across treatment and network assets. These capabilities can lead to lower overall totex, better customer improvements, and improved resilience.

In addition to utilities, we are helping companies in many other sectors deal with the disruption associated with these new technologies. Our Alliance with GE Digital is instrumental in these efforts, as GE helps organisations meet these challenges every day.  GE has a rich history as a thought leader in the Industrial Internet. Access our full paper to see a suggested way forward for companies.  A robust business case for your investment plans in these areas in AMP7, particularly in light of PR19, can benefit your customers, employees, and investors.


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Barry Middleton
Water Sector Specialist, PwC United Kingdom
Tel: +44 (0)79 6955 4717
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