Thames Water: Platform Approach Ensures Innovation Flows
By Mark Chillingworth, Contributing Writer, SAPinsider
Mike Potter, Digital Transformation Director of Thames Water, describes SAP, Microsoft, Amazon Web Services (AWS), and Salesforce as dragons. But the business technology leader is not pouring water on the fire breathed by these giants of enterprise computing — he considers his partnerships with SAP, Salesforce, and Microsoft as a powerhouse helping to modernize the largest fresh water and waste-water services company in the United Kingdom (UK).
As the supplier of 2.6 billion liters of water per day to the UK’s capital and the counties that surround London, Thames Water not only has to sate the thirst of one of Europe’s largest conurbations; the business is also dealing with the challenges of climate change. London and the UK’s southeast region make up the driest areas of the country. This is having an impact on the famous River Thames from which the firm takes its name, and the catchment area Thames Water draws water from.
“There is a huge global focus on carbon emissions and a key impact of climate change is water scarcity — sustaining water is something that we cannot take for granted,” Potter says. He has been at Thames Water since 2019, joining as Chief Technology Officer (CTO) before taking on the digital remit in 2020. “It is an incredible time to be in an organization like this and adapt it and look at the long term.”
According to Potter, the water works network is 80 years old and dates back to Bazalgette. The sewage systems were designed in the 1800s by the renowned engineer Joseph Bazalgette, whose architecturally delightful buildings make vital infrastructure such as water pumping houses look like grand train stations. The network put in place in the 1800s was a masterpiece in design, but the world, and in particular the south of the UK, has changed dramatically since then. With major population growth and now climate change, Thames Water has had to modify its infrastructure to deal with the new challenges faced by the sector, and as an aging network, maintenance is a constant demand on the business.
Mike Potter, Digital Transformation Director, Thames Water
“We have to reduce water consumption by helping customers use less and with a relentless focus on reducing leakage. We are also looking into how we can reduce the amount of water we take from the environment by paying close attention to how we treat the water that we return to rivers, and how we return treated water back to the water supply.”
Potter says that there are many opportunities for innovation, and not only in digital technology, but across the organization. This is why his role changed during 2020 from CTO to Digital Transformation Director, as the technology platforms in use at Thames Water play a vital role in ensuring business-wide change flows through the organization.
The digital transformation focus of Potter and Thames Water is the second wave of change that the business has experienced. In 2017 Thames Water realized that its technology operations were not fit for purpose, and a major refresh of the technology estate was instigated to make the business more efficient.
“The technology performance was not there. Availability of service was a significant issue and the technology was not meeting the needs of the business. Now there has been a huge investment into the infrastructure and networks, and all the technology hygiene that is essential has been done. Step two, which we are working on now, is how to better serve the business through application and data.”
Making a Modern Thames
“We are moving towards these large-scale platforms, and that means we are going to end up retiring a lot of the work that was done in 2018,” Potter says of how data centers and mainframes that had to be updated are now being surpassed by the platforms from SAP, Microsoft, and Salesforce. “It was the right thing to do at the time, as the business just could not run without that modernization.” Potter adds that the platform move he is leading today has required a step-change in aptitude and that in 2017 and 2018, the business did not have that capability, so the modernization of mainframes and data centers protected the business and, in effect, bought time to prepare the development of new skills and resources in the business.
“This is all part of a five-year investment plan, including two years to get the modernization done, and now three years to negate the need for less efficient technologies.”
Now, says Potter, the focus on platforms will reduce the operational cost of technology. “Thames Water can drive a dramatic reduction in cost so the business can take advantage of the benefits from our progressive retirement of those initial investments. Thames Water should not be running mainframes,” he says with a smile.
Dragons as Friends
Thames Water began using SAP technology in the mid-2000s, and as part of the major modernization that took place in 2018, became an early adopter of SAP S/4HANA hosted on Microsoft Azure. SAP, Azure, and Salesforce are therefore becoming the three core technology platforms that operate Thames Water. Potter describes the trio, along with Amazon, as the big dragons that currently rule the land, and that a technology leader’s role is to choose the right dragons for the business strategy.
“You will see their footprint grow, and we will all have to work out who the winner is, and then we will grow with them,” he says. Potter cites recent vendor activity such as Salesforce buying Slack as an example of how the platform providers will acquire or build out the capabilities onto their platforms that organizations require for their digital journey.
As a result, CIOs and CTOs will have to make major decisions about selecting the best platform for their organization and, in doing so, be confident the technology platform provider will keep pace with the demands of digital change. “In technology, we are driving agility, but we are also signing a 10-year contract, so I don’t want to get into bed with the wrong dragon,” says Potter.
By choosing the SAP, Microsoft, and Salesforce platforms, Thames Water adds weight to the argument that platforms are replacing systems integrators (SI). “Platforms like SAP, Azure, and Salesforce bring incredible capability out of the box, and that capability is well integrated. We are focused on how we can exploit those capabilities.”
According to Potter, Thames Water utilizes SIs to help with the heavy lifting required to bring capability into an organization, but throughout his career, he has focused on developing the technological capabilities of the business. “The world is changing, and the SI relationship is going to ebb away and be replaced by partners that bring something quite different to the organization. You get these disruptions once every 20 years. That doesn’t mean the job gets any easier for me — I now have to have capabilities in-house to manage the technology platform providers, so it is a very different challenge to managing a systems integrator,” says Potter. He and his team are now constantly looking at how they get more demonstrable value from the platforms.
A commonality of the platforms that Thames Water has selected is their strength in managing major levels of data. As the UK’s largest water provider, Thames has major data sets on its customers, water network, staff, and machinery for treating and supplying water to 10 million customers — including this scribe.
“We have to be at the cutting edge of how we use data,” Potter says of how data is rising in priority on the organization’s agenda, as it is for many. “We are learning as we go in terms of how we use data. We are in the process of mastering our data and cleaning it up as part of the development of a data integration layer for the business. Then we can expose that data to our services and users, but also to the customers,” Potter says.
Potter has a unique way of getting the entire business involved in data projects, which will both deliver data management modernization, but perhaps more importantly, make the business feel like it played a role in the data creation and digital transformation. This will avoid the perils of the organization feeling like the program was done to them by IT. “I have tried to identify business transformation programs that require a change to their data, and as a result, 70% of our technology and data estate consolidation is being done through these change programs. At the same time, we are identifying areas that we can add value to the business through improvements in the data quality. In two years’ time, I expect to have a single, high-quality data set,” he says.
Asset data, such as information on a pump or sewage treatment plant, is the most complicated area of data, but also the one that could make significant savings to the business. “Over the next 18 months, we plan to expose more of our asset data through an open data strategy, so that other people can start using that data and then, in turn, we can find more value from that data.”