I began doubling down on digital a while ago, and with the emergence of the pandemic, it became clear to me that we were entering the end of the beginning for digital. Several management consulting and businesses have commented on the acceleration of adoption of digital technologies out of necessity due to the pandemic. One management consulting firm, for example, said, “We are seeing three years of digital transformation in three months.”
Why is this the case?
Digital water technologies deliver advantages over analog solutions. These advantages were apparent pre-pandemic but are now even more compelling. Take for example technologies such as satellite earth observation technologies that monitor water quality and quantity and flood prediction; infrastructure leak detection and ecosystem mapping; artificial intelligence and smart hardware to monitor energy use and predict asset performance; smartphone apps that facilitate a direct connection to consumers. These digital solutions not only benefit centralized water and wastewater systems but are enabling technologies for innovative water and treatment technologies such as air moisture capture and localized treatment systems. One way to understand the role of digital technologies is to visualize the digital water value chain providing real-time data to support the water sector workforce and customers and consumers (Figure 1).
I have started to focus on the ongoing challenges in bringing digital water technologies to market and ensuring that a workforce has the capabilities to translate these technologies to enterprise value. The human side of digital transformation has become more acute. Workforces need to get up to speed quickly and technology providers must be creative and clear with their value propositions in offering digital water technology solutions.
The challenges identified in the International Water Association (IWA) Xylem Digital Water Report remain as relevant as ever and require investment and a strategy to overcome them: systems integration and interoperability, human resources impact, financing solutions without a clear value proposition, and cybersecurity. The 2018 IWA – Xylem report highlighted the human resources needs and challenges that have become more apparent and in need of attention over the past year.
It was apparent from the IWA Xylem research that one of the greatest challenges facing the digital transformation of the water sector was not about technology. Digital technologies are available and innovations are steadily being developed. The greatest challenges and opportunities reside with the workforce. As a result of learnings from the IWA report, I have increasingly focused on the human side of digital transformation.
A resource that has helped guide me in working with startup digital technology companies and industrial and utility customers is the book, The Technology Fallacy: How People Are the Real Key to Digital Transformation. The harsh yet obvious reality for solution providers and customers is that technologies don’t sell themselves. As a result, organizations that have committed to the digital transformation journey must focus on people and processes and not necessarily on technology. The most important conclusions from the underlying research from this book are:
- Digital disruption is primarily about people and that effective digital transformation involves changes to organizational dynamics and how work gets done
- Every organization needs to understand its “digital DNA” in order to stop “doing digital” and start “being digital.”
With regards to the workforce implications from an analog to digital transition the key conclusions are that respondents prefer to work for a digital leader, digital maturing organizations attract digital talent and create an environment for learning, and a lack of digital opportunities may increase attrition. Equally important are the conclusions on how to start the digital transformation journey. The conclusions are not surprising:
- Organizations identify and assimilate innovations at different rates – it is a learned capability over time.
- Those that make digital core to their organizations’ strategy see a stronger return from their investments.
- Digital organizations are more agile, they encourage experimentation and continual learning, recognizes and rewards collaboration, accepts risks of failure, and increasingly organizes around cross-functional teams.
How to improve digital adsorption for the workforce:
- Increase the organizations mechanisms (e.g., sensing systems) that allow it to more effectively acquire knowledge from outside organizations.
- Increase the velocity of internal information flows through initiatives ranging from employee rotation to collaboration tools.
- Focus on helping employees understand the why to close the “knowing – doing gap.”
- Test fast, learn fast and scale fast.
- Engage cross-functional teams in testing: disseminate learnings quickly, systematically, and broadly.
Digital transformation is not easy but is critical to ensure sustainable, resilient, and equitable access to water. We must learn from each other and be open to new technologies, business models, and ideas. I believe we are making progress, but to accelerate the adoption of digital solutions, we must challenge the status quo and ensure we provide our workforces with the strategy, culture, and tools to succeed.
There is an exceptional opportunity for scaling digital water technologies in Latin America. The Sustainable Development Goals (SDG 6.1.1, SDG 6.2.1, and SDG 1.4.1) establish ambitious goals, introducing the concept of “securely managed” services. According to these new parameters, 165 million people do not have access to safe water services, and more than 440 million are without access to safe sanitation.
It is estimated that in this region the capital cost to comply with SDGs 6.1 and 6.2 is USD$14 billion per year.[1] Analog solutions will not get us to achieving SDG 6. Instead, digital technologies can assist water and wastewater utilities to do more with less resources and support an already stretched workforce. For utilities, the digital technological transformation of systems and operational processes can result in a reduction in operating expenses of up to 25 percent. [2]
Advanced technologies can transform business models necessary for the provision and maintenance of water, sanitation, and hygiene service (WASH) and, in doing so, unlock a variety of new economic opportunities. [3] One of my favorite quotes is, “The future has arrived, it’s just not evenly distributed yet” by William Gibson, author of Neuromancer and credited with the creation of the cyberpunk genre.
The future is here, but it’s up to all of us to ensure it is “evenly distributed.”
[1] Hutton and Varughese, 2016
[2] McKinsey & Company, 2018
[3] Sarni et al., 2018.
Originally published on IDB.
