EBC’s benchmarking programme for water services - the art ... · For drinking water and...

Peter DaneHennef, June 4, 2009

EBC’s benchmarking programme for water services

- the art of benchmarking -

Hennef, June 4, 2009EBC’s benchmarking programme - 2 -

Peter Dane• MSc in civil engineering• career of over 25 year in the water industry• experienced in corporate strategy, mergers,

business development, investment planning,contingency management

• at present project manager international benchmarkingat Vewin, Association of Dutch Water Companies

• chairman of EBC’s programme committee• member of IWA’s Joint Task group on Benchmarking

Personal introduction


Content

Supported by

1. Why (international) benchmarking?2. The EBC initiative3. EBC’s benchmarking programme4. Present activities5. To conclude


Why (international) benchmarking?

Drivers• discussions on liberalisation/privatisation since the ’90’s• demand for transparent and efficient public services• Lisbon-strategy (EU, 2000) - water sector needs to be

modernised• EU-Directives require large investments/smart

innovations in the water industry• WFD: full cost recovery


Why (international) benchmarking (2)?

Actual situation in Europe• 2006 Eureau-survey: some 20 regional/national initiatives

− single action projects ánd regular programmes(A, D, DK, FIN, H, N, NL, P, S, UK)

− organised by associations / consultants / regulators− very different, few interconnections

• industry can benefit from:− extending number of initiatives− standardising programmes− connecting initiatives (international)


Why (international) benchmarking (3)?

Benefits of international benchmarking• getting to know your utility in another way• larger reference group to compare yourself with• larger opportunities for networking, identification of best

practices, innovative solutions• showing stakeholders your drive for improvement


The EBC initiative

European benchmarking Co-operation• initiative of national water associations and several utilities

of Denmark, Finland, Netherlands, Norway, Sweden (2004)• objective - to facilitate utilities in the continuous process of

improving performance and transparency by:− offering an international benchmarking programme− providing a platform to exchange best practices of

management and operations− exchanging benchmarking knowledge and experiences


The NEBC initiative (2)

Characteristics of EBC• from the water industry, for the water industry• experienced partners/large network• focus (primarily) on European water utilities• respecting existing national/regional initiatives• co-operating with national associations/regional partners• not for profit, fair fees• fully supported by


The EBC-initiative (3)

EBC’s benchmarking networkWHO (UN)

IBNET (World Bank)

European BenchmarkingCo-operation

EUREAUEuropean Water Statistics

IWA

(inter)national benchmarkingscheme X

individual utility ...

individual utility C

individual utility B

individual utility A

water association ...

Vewin's benchmarkingprogramme

Norsk Vann's benchmarkingprogrammeFIWA's benchmarking

programmeDANVA's benchmarking

programme

regional programme ...

6-Cities Group

aquabench / IWW

individual utility D-...

individual utility D-2

individual utility D-1


EBC’s benchmarking programme

Starting points• water ánd wastewater activities• for smaller & larger utilities, bulk & retail etc.• facilitating utilities in improving business processes by

learning/networking – not for regulation• not too much data, not too complicated

– numerical comparisons just an aid to identify improvement areas– no corrections for local circumstances

• financial data need to correspond with annual report• demand driven, flexible programme


EBC’s benchmarking programme (2)

Some benchmarking fundamentals• IWA’s Task Group on Benchmarking:

“benchmarking is a tool for performance improvementthrough systematic search and adaptation of leadingpractices”

• benchmarking: not a single action!– management tool for

continuous improvement- preferably embedded in

yearly business planning cycle



• benchmarking: 2 consecutive stepsI. Performance assessment− defining benchmarking objectives− defining a model− developing tools− inviting participants− collecting data− analysis and validation− identifying performance gaps− reporting

II. Performance improvement− identifying best practices− preparing an action plan

with targets and priorities− implementing performance

improvement measures− evaluating



I. Performance assessment - areas to analyse

• context information• key performance areas

– water quality– reliability– service quality– sustainability– finance & efficiency

Context information��

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��

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Water quality

Reliability

Servicequality

Sustaina-bility

Finance &efficiency

Context information��

�

��

�

Water quality

Reliability

Servicequality

Sustaina-bility

Finance &efficiency



I. Performance assessment - participation levels

• 3-level model– basic– standard– advanced

context informationreliability

sustainabilityfinance & efficiency

context informationsustainability

finance & efficiency

context informationwater quality

reliabilityservice qualitysustainability


context informationwater quality

reliabilityservice qualitysustainability


context informationsustainability


context informationservice quality


Drinking water Wastewater

Advanced level

Standard level

Basic level


EBC’s benchmarking programme (6)• IWA’s PI system is applied where possible

Variablesdata element from the system. Can beconsidered as a ‘Building block” forcreating performance indicators

IWA PI-manuals

Performance indicatorsmeasure the performance of anundertaking. A PI consists of a value(resulting from a formula) in specific units

Context informationprovides information on the inherentcharacteristics of an undertaking. Mayaccount for differences between systems

ExampleE-010Registered

customers

ExamplePh-012Number of customermeters / number ofregistered customers(E-006+E-009)/E-010

ExampleCI-014Supply area (km2)


For drinking water and wastewater, a set of input variables is used to calculateperformance indicators. Only a selection of key performance indicators is included inthe reports


45 basic input variables57 standard input variables

107 advanced input variables


38 basic input variables57 standard input variables23 advanced input variables

15 basic PIs63 standard PIs88 advanced PIs

Basic key PIsStandard key PIsAdvanced key PIs


Calculation Calculation

Selection Selection

Available PIs foronline reporting

Key PIs in finalmanagement report

Maximum inputvariables


45 basic input variables57 standard input variables

107 advanced input variables


38 basic input variables57 standard input variables23 advanced input variables






Calculation Calculation

Selection Selection

Available PIs foronline reporting

Key PIs in finalmanagement report

Maximum inputvariables




II. Performance improvement: annual workshop

• discussing (draft) results(understanding PI’s)

• discussing special topics(exchanging knowledge)

• identifying and discussingbest practices

• preparing action plans



Programme experiences• first pilot (2005/2006)

– comparing costs of drinking water activities of 15drinking water utilities with existing (Dutch) model

• second pilot (2007/2008)– successful test of newly developed, web-based

model with 30 water & wastewater utilities• IB2007 (2008)

– first regular benchmarking round– growing interest from utilities all over Europe


At present: starting up IB2008• international benchmarking project with data of 2008• open to every type of water utility• next to performance assessment, this year extra focus on

performance improvement

Present activities


Participants IB2008

OutsideEurope:

Status May 29, 2009:- 41 participants- 18 different countries- representing 55 million

inhabitants


Methodology development• demand driven, flexible programme• frequent adjustment of variables/indicators, based on

– strategic focus of utilities– yearly evaluation + recommendations by participants

• setting up expert groups to advise on improvements• connection to IWA Specialist Groups

Present activities (2)


Network development• expanding number of participants through

intermediates (associations, regional networks)• connecting to other benchmarking programmes like

NWWBI, WSAA for exchanging knowledge and highlevel comparisons



International co-operation• Eureau (Eureau III-commission)

– strategic: in favour of modernisation of the water sector– subsidiarity - up to individual countries how to modernise– supports benchmarking initiatives– EBC’s programme development regularly discussed

• IWA– strategic: strong promoter of utility benchmarking– Joint Task Group on Benchmarking– fully supports EBC-initiative



• benchmarking – science or art?• how to connect available scientific/practical knowledge

about performance assessment/indicators?• EBC’s cross-border benchmarking initiative is open to all

European water utilities ánd to new partners

To conclude

EBC’s benchmarking programme for water services - the art ... · For drinking water and...

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