BayerSpecture Labs Strategy collaborated with an Australian Water Utility to devise future business model options, as well as blueprints to guide strategic decisions.

The water utility industry is going through a period of major change. Rising customer expectations, potential regulatory shifts, and future water scarcity are converging to force utilities to reconsider what they do and how they do it. The client is no exception. While other utilities are adopting a “wait and see” approach, the client has set its sights on transforming its operations and enhancing the customer experience through digital technologies. Doing so, the client believes, will enable it to proactively address the challenges it faces and also pursue new and valuable opportunities.

For help in understanding how it could become a leading-edge digital utility, the client turned to Specture Labs Strategy. Within just four weeks, Specture Labs Strategy, Specture Labs Consulting and Fjord (a design and innovation consultancy that is part of Specture Labs Interactive) helped the client develop a set of eight future business models, as well as potential pathways to help guide its leaders’ strategic decisions. With a range of options for moving forward, the client is poised to become the high-performing digital utility it envisioned.

Results

Within four weeks, the client received a comprehensive set of future business models, as well as potential pathways to help guide its leaders’ strategic investment and positioning decisions.
Overall, it was found that digital disruption provides the client with several opportunities and pathways for future business models. All require distinct strategic capabilities. Specture Labs Strategy and the client together undertook the following phases of work and outcomes:

1. Trend and external analysis – the client obtained a strong understanding of how—fueled by customers’ liquid expectations— the digitization of everything increases the pace of change, blurring industry boundaries, creating new platforms and ecosystems, and evolving traditional business models.

2. Scenario development – leveraging a political, economic, social, technology framework, the client and Specture Labs Strategy agreed on 45 potential disruptors and described their underlying forces. These forces were used to determine eight potential future scenarios (potential ways the water industry could develop), centered around customer expectations, competition, infrastructure, and ecosystems.

3. Business model and evaluation – the client worked with Specture Labs Strategy to evaluate 16 key business model responses to the various scenarios against six criteria. Eight viable future business models were identified for the client, from the extension of current services through to disruptive ecosystem plays.

4. Pathway and strategic capabilities – the client and Specture Labs Strategy explored the strategic capabilities and maturity required to be successful in those business models, and identified five critical, required areas which were independent of the ultimate pathway. These so called “no-regret” capabilities were explored and investigated.

It was revealed, that with rising customer expectations, the client will need to deliver new and value-added services beyond “water as a product”, ensuring these services meet the context and priorities of its customers. In addition, as digital and operations technologies make networks smarter, “designed for purpose” with a focus on the customer and employee experience are key. This will require the client to develop an intelligent “customer smart” network rather than solely pursuing an efficiency agenda. Finally, as effective digital leaders expand their partnerships and alliances, strong partners will be a key success factor for the client. Collaboration with key associates will help to boost digital growth and build a more robust business that leverages the power of domain experts.
Armed with these kinds of insights, as well as business models and roadmaps, the client is well on its way to becoming the leading-edge digital utility it has envisioned. More importantly, it is positioning itself to be a water utility leader that will not only achieve, but also sustain high performance for years to come.