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Advice and Information for Finance Professionals

The Shape of Scottish Water: Cloud-First Strategy Helps Utility Embrace the Future

Guest Author

By Jay Ghosh, Head of Oracle Enterprise Solutions, UK and Europe, Tata Consultancy Services

Every day Scottish Water—the only publicly-owned water utility in  Great Britain—pumps about 304 million gallons of drinking water to about 2.5 million households and 153,000 businesses across the nation. That’s enough water to fill more than 500 Olympic-size swimming pools. The utility also handles the resulting waste water, taking away and treating about 204 million gallons daily. The whole job engages the efforts of some 4,000 employees—everyone from customer service agents to sewer workers to infrastructure planners.

As a public entity, Scottish Water falls under the watchful eye of the country’s parliament and several regulatory agencies. Its budgets are inherently tight, relying entirely on just two sources of funding: customer charges and borrowing from the government. Both sources are capped. “We can’t easily create money,” says Brian Strathie, Scottish Water’s financial controller. “To generate extra cash for new services, we have to outperform our regulatory contract. It’s the customer’s money.”

The New Scottish Water

  • 85% fewer customer complaints in the last 10 years
  • 21% higher customer satisfaction levels as per Customer Experience Score satisfaction survey
  • 40% faster book closings
  • 12% more accurate project tracking
  • 15% lower IT cost of ownership
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Confronting Risk

To stay competitive and keep customers—not to mention regulators—happy, Scottish Water is raising its game. The utility is redoubling efforts to modernize its back office and unify the business on a single technology platform. “There were a lot of manual jobs, too many handoffs, and too much customization,” Strathie says, adding that the utility’s on-premise applications couldn’t keep up with the latest industry functionality.

In fact, many were on the verge of becoming unsupportable. “Our back-office ERP was outdated and too complex,” Strathie says. “The lack of a single source of truth made it hard to be confident enough in our data to drive productivity and the required service improvements.”

Cloud Bound

With challenges mounting, Scottish Water took action. The utility asked Tata Consultancy Services (TCS) to help it conduct an end-to-end review of operations with a view to not just cutting costs but fundamentally rethinking the way the business worked—in areas ranging from finance and billing, to HR, sales, and customer service. Scottish Water was biting off a lot with this initiative, so it relied heavily on experienced partners like TCS for guidance. “It was a courageous journey and we were a bit nervous,” Strathie says. “We needed a comfort blanket to really go gung-ho into this project.”

The journey led Scottish Water to the cloud, with the utility choosing Oracle ERP Cloud applications to run core back-office functions, including financials, procurement, billing, and project management. Other applications for CRM and analytics (among others) rounded out Scottish Water’s cloud environment. Then the company built an integration layer based on Oracle Platform-as-a-Service (PaaS) to connect their cloud applications to the few systems that would remain on premises, including HR, telemetry, and GIS systems.

The hybrid cloud infrastructure became the driving force behind what TCS and Scottish Water called a “Business 4.0 Digital Transformation.” The transformation had four major objectives:

  • Deliver personalization with better customer segmentation to respond to individual needs
  • Leverage ecosystems of suppliers and customers on a cloud collaboration platform
  • Embrace and manage risk with an “adapt and adopt” culture for agile transformation
  • Create exponential value through faster time to market and shorter billing cycles powered by automation

Scottish Water’s Favorite Flavor: Vanilla

Strathie says that adopting a “keep-it-vanilla” approach to its enterprise apps was one of the keys to success. “We insisted on zero customization as much as possible in our SaaS environment,” says Strathie. “Our strategy was to adapt to best practices in order to adopt Oracle features.” By taking this approach, he says, Scottish Water could keep its apps up to date and create a “platform of the future” that was simplified, integrated, and scalable.

However, convincing the business to embrace standardization wasn’t easy. “To push vanilla across multiple lines of business was a big cultural challenge in the beginning,” Strathie says, but the effort succeeded in the end and was easily worth the pain of changing entrenched work habits.

Payback Time

Scottish Water’s cloud-first strategy is paying off. By connecting all its apps and data on a common cloud platform—and thereby establishing a single source of truth—the utility is generating tremendous operating efficiencies. Order lead time has shrunk significantly, meaning the utility is serving customers faster and visiting customer sites less frequently. As a result, customer complaints have plunged 85 percent over the last 10 years and overall customer satisfaction levels have soared 21 percent. “Our strategy of putting the customer first is working but we need continuous improvement enable by the cloud to maintain this momentum,” says Strathie.

By the Numbers: Scottish Water's Success

Automated and integrated financial processes in the cloud have helped the utility close its books 40 percent faster and cut invoice processing costs. Today managers are tracking project spending in real time and doing it 12 percent more accurately. Meanwhile, the IT department is on track to lower its total cost of ownership by 15 percent.

All of these tech-driven improvements are helping Scottish Water deliver improved performance to its customers. The way Strathie looks at it, IT is no longer hidden away in the back office but “absolutely integrated with the business” and a key enabler of the utility’s mission. “We want to be Scotland’s most trusted business,” Strathie says. “Reputation is key to us.”

Watch the Scottish Water cloud transformation story.

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Comments ( 2 )
  • Ram Subramanian Wednesday, February 6, 2019
    Amazing article with useful and practical insights on approaching cloud based transformation
  • Joydeep Roy Chowdhury Wednesday, February 13, 2019
    Thanks for this, a very informative and crisp one that talks about the journey and finally the implementation of Oracle cloud as one of the biggest SaaS implementation I have seen in recent times. As the project manager of Scottish Water Oracle Cloud implementation it takes immense pleasure for me to see the growth and success of our customer post our implementation
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