Accelerating Digital Transformation of The Water and Wastewater Sector
Accelerating Digital Transformation of The Water and Wastewater Sector
Accelerating Digital
Transformation of the
Water and Wastewater
Sector
Smart water solutions across the edge and
software layers
Internal
Contents
Accelerating Digital Transformation of the Water and Wastewater Sector ..................................... 2
The Digital Transformation Imperative ................................................................................... 2
Climate change and sustainability ..................................................................................... 2
Water scarcity ................................................................................................................. 3
Infrastructure challenges ................................................................................................. 4
Ageing workforce and the skills shortage ........................................................................... 4
Demand for enhanced agility ............................................................................................. 4
Need for improved safety .................................................................................................. 4
Call for greater customer-centricity ................................................................................... 5
Enabling a more Proactive and Effective Response to the Challenges ........................................ 5
Barriers to Successful Digital Transformation......................................................................... 6
Leveraging Smart Water Solutions across the Edge and Software layers .................................... 7
Partnering with a Trusted Advisor ........................................................................................ 10
Conclusions ...................................................................................................................... 11
About Frost & Sullivan ......................................................................................................... 13
About Schneider Electric .................................................................................................... 13
A Frost & Sullivan Whitepaper | Accelerating Digital Transformation of the Water and Wastewater Sector 1
Accelerating Digital Transformation of the Water and
Wastewater Sector
Ageing
Climate
Water Infrastructure Workforce &
Change &
Scarcity Challenges Skills
Sustainability
Shortage
Call for
Demand for Need for
Greater
Enhanced Improved
Customer-
Agility Safety
centricity
Source: Frost & Sullivan
In the context of a global push toward net zero,5 digital technology is being leveraged to
minimise carbon emissions and extreme event damage to assets, manage future-proofing
infrastructure (such as desalination plants, wastewater recycling systems, etc), and increase
energy efficiency especially at critical applications like pumping or aeration.
insurance entities.
4 2023 Weather, Climate and Catastrophe Insight, Aon plc
5 Net zero means cutting greenhouse gas emissions to as close to zero as possible, with any
remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance.
(UN)
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In addition, the sludge produced from water and wastewater treatment plants plays a critical
role in achieving net zero and circularity goals. Sludge from wastewater streams (especially
those that have significant biological oxygen demand (BOD) content) could be used to
generate green energy and thus reduce the energy dependence of the wastewater treatment
plant. Sludge from water treatment plants could also be used as fertilisers, in re-mineralisation
of water, or in neutralisation of wastewater. From their wastewater streams, industrial sites
that have installed zero liquid discharge (ZLD) systems could recover water for reuse and
recycling, minerals, nutrients, and other resources. This shift from linear to closed loop
systems will require robust, real-time operational visibility and control, which digital solutions
can facilitate.
Finally, the ‘S’ in “ESG’6 is coming to the fore as water utilities seek to define their role beyond
being merely providers of water and wastewater services, to delivering wider social value to
the public. This means improving the monitoring and management of other assets such as
dams, parks, golf courses, recreational water bodies, etc., to improve quality of life of
residents. It also means ensuring better overall services, reduced incidents, as well as
minimised traffic disruption due to unplanned works. And for those disruptions that cannot be
avoided, it means improved data to help utilities inform the public of any disruptions or
inconveniences in a clear and timely manner, or to enable industrial sites to comply with
reporting to external stakeholders.
Water scarcity
Climate change and climate-related catastrophes also contribute to the problem of water
scarcity. This is the result of population growth (with its subsequent need for expansion of
industrialisation, agriculture, and food production – consequently increasing water demand),
ground water contamination (through the increasing use of pesticides and fertilisers), and the
release of untreated municipal waste into water bodies. Half of the world’s population could
be living in areas facing water scarcity by as early as 2025.7 By 2040, roughly one in four
children worldwide will be living in areas of extremely high water-stress.8
Whilst new and disruptive technologies within the water generation and purification industries,
as well as treated wastewater (as a sustainable alternative to freshwater) will help address
this challenge to a significant extent, water conservation and efficient processes are already
being enabled through digital tools. One of the most important areas of focus in terms of water
conservation is the roll out of smart water meters to obtain real-time and granular visibility of
usage and water savings.
Frost & Sullivan estimates that global unit shipments of smart water meters9 will have grown
12.2% each year from 2021 to 2025, to reach 52.6 million units per year by 2025.10
infrastructure (AMI)
10 Global Smart Water Meter Tracker, 2022, Frost & Sullivan, June 2022
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Infrastructure challenges
Ageing infrastructure is one of the major operational challenges for the water and wastewater
industry. In many parts of the world, underground pipe networks have reached the end of their
useful life, creating new challenges in terms renewal of assets. Ageing infrastructure (and the
need to replace these failing assets) creates enormous operational pressures that drive digital
transformation as it prompts operators to leverage advanced digital technologies to manage
their assets better (and extend their useful life as a result).
For example, in terms of non-revenue water (NRW),11 apart from water theft and human error,
most NRW is the result of deteriorating infrastructure (leaks and breaks in pipes, storage
tanks, cisterns, etc. due to rust, corrosion, electrochemical reactions, or biological fouling).
The consequences of NRW include lower revenue, infrastructure damage due to poor
maintenance, potential loss of water pressure, and higher energy costs. This drives the use of
novel technologies such as leak detection solutions, artificial intelligence (AI) models, smart
metering, digital twins,12 and data analytics.
Over the long term, the shift towards increased work-from-home practices will mean a
redistribution of peak water demand from households across the day (towards later in the
morning, as households rise later) and similar impacts on drainage and sewerage. This calls
for greater flexibility from operators to meet changed demand patterns.
11 NRW refers to the volume of water that does not reach the end user from the distribution
system source.
12 A digital twin is a virtual copy of a physical entity. In the real world, the entity can vary from
a simple component or an asset to an entire network of bigger and more complex systems.
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Workers in the water and wastewater sector must contend with a variety of occupational health
and safety (OHS) risks, such as working in confined spaces (e.g. in pump stations, manholes,
sewers, tanks, tunnels, pipelines, wells, etc.), working at heights, working with hazardous
chemicals, construction/civil works site hazards, etc. Apart from improving OHS policies and
standard operating procedures (SOPs), utilities are also using technologies such as
wearables, drones, augmented reality (AR), and digital twins to eliminate or minimise
workforce exposure to risks in dangerous and hazardous work environments. For example,
LiDAR13 sensors are being used on drones to inspect water infrastructure sites without the
need for onsite workers. Another use case seeing rapid uptake of digital tools is in the OHS
training/onboarding and continuous learning and development of workers and contractors.
In the future, as more of these technologies become standardised, work-related injuries are
likely to be minimised.
The understanding of available technology options has improved over time (especially given
the larger body of evidence now available through successful pilots and trials undertaken by
the larger first-mover utilities). Progress from pilots and demonstrations to wider rollouts has
gathered momentum. Fortunately, water and wastewater utilities have, in general, shown
remarkable openness to sharing their learnings with each other. Most importantly, the scope
of digital transformation projects is moving well beyond smart meter rollouts (to helping
influence customer behaviour through real-time usage information and greater customer-
centricity in processes) and through to enterprise-wide projects focused on internal processes
and network operations. Apart from using specific digital technologies, this has also led to
better integration of information technology (IT) and OT system environments, and integration
with business systems.
13 LiDAR stands for Light Detection and Ranging, and is a remote sensing method
14 OT covers physical equipment/infrastructure (and related systems and processes)
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Whilst the water and wastewater sector remains behind a number of other sectors (in terms
of maturity of digital transformation) such as defence, automotive, pharmaceutical
manufacturing, banking and financial services, retail, and energy, the improved leverage of
digital technologies is expected to drive further uptake and expansion of use cases.
In addition, with the clear shift toward more online transactions for utility services, the wider
uptake of social media, the already high use of mobile devices (smart phones, tablets,
wearables, etc.), the higher expectations of the younger generation within the workforce in
terms of convenience of tools used, along with the “consumerisation of IT” trend (the use of
consumer technology in the workplace), there is a shift in user expectations in regard to the
ease-of-use of water sector specific applications. This calls for the access to preconfigured
modules, but with the option and flexibility to customise. It also calls for increased use of no-
code/low-code drag-and-drop interfaces and intuitive visualisation. Apart from improving user
experience, this has benefits for operational agility and flexibility as well. For instance, using
the customer’s in-app data, water utilities could also obtain relevant information on overall
system efficiency, which drives operational improvements.
Frost & Sullivan estimates that these drivers are expected to grow the global market for digital
water solutions and services15 by 23.5% each year from 2021 to 2025, to reach US$63.02
billion in 2025.16
People and
Evidence and Cybersecurity
Funding Process
ROI Risks
Challenges
Funding: Many water utilities (especially the smaller operators and municipalities) do not have
significant cash reserves and spend much of their operating budgets implementing repairs just
to maintain operations without disruption. Furthermore, securing investments is a problem in
the current weak macroeconomic environment which leads to much higher increases in
hardship customer volumes (the number of water and wastewater customers facing financial
hardship and receiving flexible payment options, deferred payment, debt waivers or
concessional tariffs) and this could result in additional financial stress on water
utilities/municipalities.
15 Smart water metering; Smart online water sensors; Smart leak detection and NRW
management solutions; Smart pipe network management and optimisation solutions
(including smart pumps and pumping stations); Digital twin solutions; Smart operation and
maintenance (including enterprise asset management and asset health and condition
monitoring)
16 Global Digital Water Solutions and Services Growth Opportunities, Frost & Sullivan, February
2022
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Evidence and ROI: The quantification of return on investment (ROI) is difficult for several novel
technologies because there is limited guidance that utilities can use to evaluate these
technologies (since there is still limited documentation of results due to the relatively brief time
period with novel technologies in operation). To counter this restraint, utilities and
municipalities are focusing on:
• Increasing collaboration and information sharing (so that critical success factors are
visible to all)
• Expanding the scope of benefits from proposed digital transformation projects (from
immediate operational outcomes to adjacent benefits, such as enhanced customer
service and liveability outcomes, improved workforce wellbeing and retention, etc.).
People and Process Challenges: Short-term thinking prevents digital transformation projects
from progressing despite visible payback. Overall, priority given to reactive tasks is challenging
the industry. In addition, the senior management’s appreciation of the benefits of specific
advanced digital tools is often lacking.
The siloed nature of operations and management teams, and at times, a conservative and
risk-averse mindset are also internal barriers.
Resistance from internal IT departments, difficulties in transitioning from legacy systems that
work on diverse platforms, point-solution-focused approaches that hinder a holistic,
enterprise-wide approach, and the insufficient articulation of enterprise-wide benefits often
hamper potentially significant digital transformation efforts.
As a result, achieving scale beyond pilots remains a major challenge. To address this restraint,
a significant paradigm shift is required within utilities and municipalities in terms of thinking
and processes to embrace collaboration across the enterprise, to educate employees on
digital transformation initiatives underway, and to ensure the commitment and ownership for
digital transformation moves from C-level to middle management level.
Cybersecurity Risks: Over time, increased openness and collaboration on digital networks has
made industrial systems more vulnerable to cyber-attacks. The use of IP-based, wireless,
and mobile devices in industrial environments has increased. Also, with the increased use of
commercial off-the-shelf IT systems in industrial environments, industrial control systems face
increased exposure to malware and security threats that are targeted at commercial systems.
However, the water and wastewater sector’s operations workforce tends to be skilled in
automation and control, and not as much in IT security. This hampers digital transformation
as it weakens their ability to devise comprehensive protection and prevention strategies and
protocols.
Leveraging Smart Water Solutions across the Edge and Software layers
In the face of such formidable challenges, some utility operators and industrial users may be
forgiven for placing digital transformation projects in the “too hard” basket. For one, there is
the misconception that they need to start from a clean slate. This is not only financially
unviable, but also unrealistic and unnecessary. By partnering with a trusted advisor who can
factor in existing infrastructure and orchestrate new solutions on top of existing assets, utility
operators and industrial users can accelerate their digital transformation journey. One such
trusted advisor is Schneider Electric, with its suite of smart water solutions at different levels:
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automation and control, water analytics, and enterprise operations. This suite of disruptive
smart water solutions includes EcoStruxureTM Automation Expert, EcoStruxure TM Water
Advisor, and AVEVA TM Unified Operations Center (UOC).
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• EcoStruxureTM Water Advisor –
East Water
Water Loss: Offers automatic
Largest supplier of untreated water for
leakage calculation and real-time industrial use in eastern Thailand, and the
alarming, as well as management country’s first complete water pipeline
of leak detection teams and stretching nearly 500 kms.
monitoring of leak repair activities CHALLENGE
to reduce NRW. • Pumping water from multiple sources
• EcoStruxureTM Water Advisor – while ensuring constant water
pressure and volume
Urban Drainage: This provides
• Energy costs ~40% of OpEx
real-time management and • Droughts
optimisation of wastewater and • Leaks in pipeline network
stormwater networks, with • Coordinating efforts & workflow
prediction of severe rain and storm between operation, maintenance,
events, automatic event detection, management, and other
and control of assets and water departments
quality. SOLUTION
EcoStruxure Water Advisor and AVEVA
• EcoStruxureTM Water Advisor – Unified Operations Center
Energy: This solution for energy RESULTS
• Up to 30% increase in operational
management of drinking water
distribution networks enables efficiency
users to arrive at optimised • 15% drop in energy costs
pumping strategies that can be
implemented automatically through integration into the SCADA system.
• EcoStruxure TM Water Advisor –
NRDA Naya Raipur
Well Watch: Monitors productivity,
India’s 1st smart greenfield city.
pump efficiency, and pump
CHALLENGE
condition at wells, aquifers, and
• Rapid urbanisation
boreholes. • Severe pressure on city resources
• EcoStruxureTM Water Advisor – • Unequal distribution of city resources
Waterways: Provides a surface- • Lack of social inclusion
water management solution to • Livability challenges for citizens
manage flood/low-water levels, • Environmental sustainability
surface water quality, as well as • Inefficient city operations
SOLUTION
advanced control of structures
EcoStruxure Water Advisor and AVEVA
such as dams and reservoirs. Unified Operations Center
RESULTS
• Increased efficiency of operators
and management
• Improved situational awareness and
operational readiness through
advanced unified dashboards
• Immediate access to critical KPIs and
reporting data in the field
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Scope of EcoStruxure Water Advisor
AVEVA TM Unified Operations Center (UOC) is a system of systems that connects IT and
OT to enhance business insight and decision making around water and wastewater
infrastructure, operations, workforce, and resources. By providing a single pane of glass (via
a unified user interface) to management, it helps break down organisational silos that threaten
to weaken contextual awareness and the quality of decision making. This ensures optimal
visibility and control across not only OT environments, but also integrated with IT, security and
CCTV, safety systems, building management systems, etc.
It is also critical that the approach is holistic i.e., across the full water cycle – water sources,
treatment, distribution, wastewater collection, treatment, and recycling - and across both
municipal and industrial users.
Finally, it is important that solutions are tailored to meet the unique needs of water and
wastewater operators at the specific stage that they are at in terms of digital maturity.
Given that Schneider Electric’s offer extends well beyond automation and control (through to
a range of other solutions used across the lifecycle of assets and across different types of
assets – for example, power distribution equipment, data centre solutions, security solutions,
building management systems, etc.), it is ideally positioned to support utilities and industrial
users with solutions and services that enable successful holistic digital transformation.
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As Schneider Electric directly addresses the needs of diverse sectors such as consumer
packaged goods (CPG), semiconductor, mining, chemicals, and other segments, they bring
an inside-out understanding of the unique considerations for industrial sites.
In addition, the company’s open solutions such as EcoStruxureTM Automation Expert allow
integration with third party apps, or with diverse data streams (operational, financial, and
commercial).
Based on the maturity of the customer, Schneider Electric’s solutions can provide real-time
visibility of operations, recommend actions to be taken to optimise, or even automate for
unmanned operations.
Conclusions
In the context of the increased frequency and intensity of natural disasters, water and
wastewater sector operators are asking key questions such as: “What is the definition of safe
critical infrastructure?” “How can operational data and modelling help improve readiness and
inform decision making during extreme events?”
To combat water scarcity, they are asking, “How best can we conserve, optimise, and recover
water?”
In the face of infrastructure challenges, their focus is on: “How can we move from reactive
approaches to more predictive and prescriptive approaches to asset management?”
To get both ageing workers and younger workers to own the continuous and enterprise-wide
digital transformation journey, operators want to know, “What tools, processes, and training
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do we put in place to help the workforce serve customers better, meet operational and
business goals, as well as find satisfaction on the job?”
In the search for enhanced agility, their question is: “How can we transform from slow,
analogue, closed, and siloed systems to agile, digitally empowered, open, and integrated
systems?”
In the push to improve their track record on workforce safety, their demand is: “With the
constantly changing asset mix, how can we ensure safety of our personnel?”
When progressing customer-centric initiatives, operators are asking the question: “How close
does the end-user want to be to water and wastewater usage data, and how can we support
them in this regard in the most appropriate manner?”
Addressing all these questions calls for building and optimising business and operational
capabilities around people, processes, data, and technology. Whilst water and wastewater
operators and industrial users are often confused by the sheer volume and diversity of solution
options available to assist them on this journey, it is critical that they find and partner with a
trusted advisor who understands their industry, has an open, software-centric solution which
covers the whole water cycle and the entire lifecycle of assets, and provides expertise and
support tailored to the digital maturity of the customer.
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About Frost & Sullivan
For over six decades, Frost & Sullivan has helped build sustainable growth strategies for
Fortune 1000 companies, governments, and investors. With a team of experts based in 45
global offices, we generate intelligence spanning 10 industries, 35 sectors, and 300 markets,
providing actionable insights to navigate economic changes, identify disruptive technologies,
formulate new business models, and create a stream of innovative growth opportunities that
drive future success. www.frost.com
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