Water and Wastewater
The evolution of the Water business model has been impacted by a set of significant industry events (changes in regulation, consolidation, technology innovation, price pressure) and external market forces (credit availability, climate change, energy costs). These have raised a number of strategic and operational issues:
- Planning and management of the asset base – ensuring supply security and efficiency, asset portfolio planning and investment, branding strategy
- Delivering effective and efficient operations – executing operational improvements, field force automation, leveraging technology innovation, managing supplier effectiveness and viability, contingency planning and risk management
- Improving customer service – customer profiling and segmentation, focused retail strategy, improved customer satisfaction
- Targeting growth – establishing non-regulated service offerings, identifying and evaluating merger and acquisition potential
- Organization and process alignment – optimization of corporate structures, field force management
Oliver Wyman has significant experience assisting the Water utility industry in addressing these challenges. Examples include:
- Developing effective capital expenditure assurance programs balancing financial and operational necessity
- Assessing and improving outsourcing strategy
- Coping with an aging work force
- Defining and implementing value-sourcing programs
- Helping water utilities and water technology companies define the impact of technology on future business designs
- Developing "first responder" and "storm" strategies
- Defining new customer segmentation strategies and designing new offers
- Creating non-regulated service offerings as a source of additional growth
- Working with water utilities and private equity firms or infrastructure funds on buyer or vendor due diligence and post-merger integration
- Restructuring corporate organizations
- Defining working capital management programs
Recent engagement examples:
Performance improvement: In the water industry, purchasing accounts for 40-60% of costs. Oliver Wyman helped several European water utilities to reach a high level of cost savings by improving their sourcing processes and organizations, in particular during post-merger integration.
Business development in the municipal market: For an international water utility, Oliver Wyman conducted an opportunity screening to identify the highest-priority opportunities in Water and Wastewater in the U.S., supported by customer interviews and taking into consideration demand for new capacity, environmental regulations, and infrastructure rehabilitation requirements.
Growth strategy in the industrial water market: Oliver Wyman led a client segmentation effort that created innovative 'standard' and 'customized' product and service offerings for a major water company.
New offer design in non-regulated water businesses: Oliver Wyman helped define potential business designs in Home Services and CRM for a water company (market opportunity identification, risk assessment, evaluation of potential acquisition targets, including strategic due diligence).
Restructuring and divestiture of the service contracting business of a major U.K. water company: Following a major structural and operational review, Oliver Wyman evaluated options to generate value; we developed and executed a strategy to divest the service contracting business of a major U.K. utility.
Customer service recovery program: After new systems and outsourcing contracts caused customer service to decline, Oliver Wyman created a comprehensive program to redefine standards and improve Customer Service operations.
Competition and regulatory strategy: Oliver Wyman identified and evaluated the strategic options caused by changes in regulation and government strategy; we helped create a negotiating position that was adopted by this major water company.
Cost reduction: Oliver Wyman conducted a review of operations and assisted with the identification, evaluation and execution of cost-reduction measures for a major water company facing regulatory pressure to improve operations.