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Location:
UK & Ireland
Sector:
Water
Northumbrian Water Group (NWG) is one of the largest regulated water and wastewater services companies in the United Kingdom serving 4.4 million customers in the North East of England (water and wastewater) and the East of England (water supply service only).
NWG employs just under 3,000 people and operates:
NWG supplies 1.1Bn Mega litres of clean water every day and the company is overseen by the regulatory body Ofwat, the economic regulator of the water sector in England and Wales.
In late 2021, similar to many other UK regulated water companies, NWG was facing a capital investment funding shortfall. The total value of the potential investments needed to meet regulatory performance targets on service and resilience exceeded the funding that was available within the five-year AMP7 regulatory period (2020—2025). NWG needed a way to quickly establish which capital projects to invest in to deliver maximum benefits and deliver on the companies’ priorities and regulatory commitments but within the envelope of the funding level available. NWG also needed to understand the overall impact of not making investments due to the funding constraints.
A data-driven approach to solving the problem was needed, however, NWG’s existing processes, IT systems and data were not able to fully support such an approach and external support was sought from AMCL.
NWG had independently procured an asset investment planning software product from an established solution vendor – Copperleaf – to replace the myriad of spreadsheets and other data sources it was using. The new software was targeted for use to develop the investment plan for the forthcoming AMP8 regulatory period (2025-2030).
However, there remained three years left within the current AMP7 period and so NWG sought support from its long-term partner, AMCL, in the role of an independent ‘Business Integrator’ to work closely with Copperleaf and NWG’s investment planning teams to accelerate the development of a near-term investment plan for the remaining three years of the current regulatory period. Achieving this would deliver both in-AMP7 benefits and put NWG on the best possible footing going into the forthcoming AMP8 regulatory period.
In its role as ‘Business Integrator’ AMCL developed a twelve -step Agile-based, iterative approach with specific timescales assigned to each stage in the process. In the initial stages focused on obtaining and cleansing NWG’s existing investment data, infilling any data gaps and loading the data into a pilot version of the chosen software product.
Initial analysis showed that only 7% of the data in the legacy systems was immediately suitable for use by the new system and so this became a critical activity. Once the legacy investment data was improved it was then translated into a structure that could be used effectively and aligned to the NWG’s Value Framework which had been codified in the form of decision-making Value Models in the chosen software solution.
A set of twelve investment optimisation business scenarios were developed in consultation with NWG’s Executive Leadership Team, each scenario with different regulatory performance targets and funding constraints. When the investment portfolio optimisation runs were performed by AMCL in the new software NWG were able to choose from a wide range of scenario-based investment plans each with projected service levels and costs.
Within a matter of weeks AMCL had:
The business required expertise from AMCL to support our tactical planning teams in optimising the remaining AMP7 delivery plan and enhancing our capability in using the copperleaf software. A complex piece of work that involved completing various scenarios and outputs for the business in order to make an informed decision on remaining investment decisions, which has been very successful.
Click the logo to learn more from Copperleaf about the project.
