Last week we held our final members meeting for 2014. It was an engaging day with a focus on utility excellence. The highlight was our deep dive into benchmarking. WSAA has been at the forefront of benchmarking over the years with the Aquamark program being one example. Our renewed interest in efficiency benchmarking is to ensure our customers continue to receive the best possible value for money. Benchmarking can be a powerful form of comparative competition that identifies opportunities for improvement.
We heard from Third Horizon’s Rob Kelly and Frontier Economics Sucheta Shanbhag (from their London office). Rob provided some reflections on the UK experience through his work with Thames Water as well as comments on the Victorian experience. One of his key messages was that 100 per cent of the costs across the organisation need to be included in the analysis so that you are getting an accurate picture of efficiency across the whole business.
Other key lessons from the Thames experience included: benchmarking should be used as a practical management tool to examine the business, setting challenging but achievable targets, and not becoming restricted by existing structures. Rob explained that with the right focus and resources committed to exploring the real opportunities underlying benchmark results, mature privately owned businesses can identify significant efficiencies. For Thames Water the process engendered a significant cultural shift where the organisation as a whole worked together to meet and exceed the improvement potential.
Sucheta, from Frontier Economics UK took us through a robust framework on why and how benchmarking can be used. Looking through a lens of the European experience, some of the techniques can clearly be applied here in Australia and New Zealand.
We also heard from some of our own members about their recent experiences. Pat McCafferty, from Yarra Valley Water, Michael Watson, Barwon Water, Louise Dudley, Queensland Urban Utilities and Francois Gouws, Trility with the private sector view.
Trying out something new, we did some real time interactive polling and the benchmarking session was voted by those in the room as the most valuable of the day. I thought so too but it is always good to hear it straight from our members.
Francois said he “found the discussions and the sharing of experiences regarding benchmarking extremely positive and I commend WSAA for initialising this debate as an essential component towards efficient economic regulation”.
From the polling exercise it was obvious that most utilities are doing benchmarking and overwhelmingly the reason was internal efficiency. The polling also made it clear that there is a continued role for WSAA in industry benchmarking. With our members we will now look at projects to capitalise on the work that is occurring. WSAA’s role continues to be to help utilities deliver for customers. Kevin Young, Managing Director Sydney Water, summed it up well:
“Whenever I leave a WSAA members meeting and head home I’m always thinking about the day and the way ahead. The recent Melbourne meeting covered benchmarking in the industry – what’s happening and what could happen and how we need to get ahead of the curve. It’s these insights that mean WSAA delivers on its purpose to collaborate, to innovate and to advocate. We are stronger together than apart”.
20 Nov 2014
