Melbourne Water: Digital Disruption and Strategic Response

November 2015

Agenda

1.Melbourne Water : an Introduction

2.Digital Drivers

3.The Digital Strategy

4.Implementation Plan: 1st Iteration

5.Strategy Refresh: 2nd

Iteration

Melbourne Water : an Introduction

What We Do

Melbourne Water:

manages water supply catchments,

treats and supplies drinking and recycled water,

removes and treats most of Melbourne’s sewage,

manages waterways and major drainage systems across

the metro area and beyond.

“ “

Key Statistics

120 years

supply

404 billion

306 billion

8,400 kilometres

managing Melbourne’s water resources

litres of drinking water per annum

or … 277 litres/person/day

litres of sewage and trade waste treated

of rivers and creeks

Water Supply Network

Melbourne Water Storage Levels

Sewage Network

Waterways and Drainage

Digital Drivers

Mobile Broadband Subscription Rates

Smartphone Penetration Rates

Melbourne Water’s Digital Strategy

Digital Strategy Vision

The Challenge:

How can digital technologies enable Melbourne

Water’s transformation?

The Vision:

Safer, faster, smarter and easier to work with

Digital Strategy Goals and Principles

Safer, faster, smarter and easier to work with Digital vision

Digital principles

Strategic Digital goals

Simple and consistent Avoid complexity and cost through the use of existing

and shared capability and services

Digital collaboration Digital collaboration will be employed to

enhance internal and external customer value

Business-led MW will be organised to enable digital capabilities to

deliver business outcomes without undue risk

User centric Services will be user centric in their design and

consider mobile first

End to end processes Digital will improve the efficiency of

end-to-end processes

Agile Digital will enable MW to be agile and responsive to

business needs and external forces

Customer value Digital will deliver increased value for customers

Shared information Information will be shared both internally and externally,

and be easily accessible in order to create value

Enable effective business decisions through

meaningful information

Improve the value of customer interaction

Enable business process efficiency

Establish end-to-end digital capability and governance

Operational Excellence New Service Enablement Customer Focus Safety Focus Business objectives

Business vision Enhancing Life and Liveability

Systems: Current State

Capability

Corporate Systems

Customer Infrastructure

Service Delivery

Capability gaps: There are gaps in digital skill and knowledge that impact our ability to execute.

Use of Cloud technology Use of cloud-based applications is opportunistic rather than systematic..

Integration between applications Integration between functional groups to support enterprise wide processes such as capital planning and the management of customer referrals are limited.

Disparate & fragmented applications Some functional areas are not sufficiently covered by the existing application architecture.

Current

State

Use of mobile solutions Deployment of mobile applications has been limited, with little integration into operational systems.

Disparate & fragmented applications Some functional areas are not sufficiently supported by the existing application architecture.

Lots of data Large volumes of data produced but little meaningful analytics applied to it.

Lots of data Large volumes of data produced but little meaningful analytics applied to it.

Systems: Target State

Capability

Corporate Systems

Customer Infrastructure

Service Delivery

Target

State Elimination of capability gaps and overlaps Capabilities will be optimised to eliminate gaps and overlaps where knowledge and skills are fully utilised;

Strategic adoption of cloud technologies: A more strategic approach to the adoption of cloud technologies will allow Melbourne Water to begin creating further operational efficiencies within IT by a systematic reduction of its infrastructure footprint.

Capabilities supported by enterprise systems All key business capabilities will be supported by enterprise systems. Key gaps such as Risk Management, Project Management, Project Estimation and Procurement will be addressed.

Applications will be consolidated Consolidation within each function driving simplicity, consistency and efficiency. In particular, the disparate systems used for asset management will be rationalised around the Maximo platform, eliminating four significant “stand alone” systems.

Process automation Integration between different function groupings of systems will be supported by the deployment of a Business Process Management (BPM) platform. For example, this will be used to improve the automation of customer referrals and enable customer self-service.

The Digital Strategy: Implementation Plan

Portfolio Roadmap (as at November 2015) We are here

Program 2015 2016

1Q 2Q 3Q 4Q 1Q 2Q 3Q

Service Delivery (SD)

Corporate Systems (CS)

Customer (CU)

Digital Capability (DC)

Business Improvement

Renewals & Infrastructure

SD7 - AMIS

SD3 - Deploy Field Mobility

SD1 - Advanced Asset Management

SD5 - Extend AMIS to cover drainage schemes

SD4 - Operational Intelligence

CU1 - Automate Further Customer Processes

CS4 - Integrated Project & Portfolio Mgmt

CS2 & CS3 - Enterprise Reporting and Data Mgmt

Note: Quarters shown as calendar year

Process Optimisation (Business Transformation)

Infrastructure & Renewals Projects

Upgrade Disaster Recovery Capability

CS9 & CS10 – Incident & Risk Management System

CS7 - Automate Procurement Processes

Intranet

CS5 & CS6 - Extend HR Information System

CU2 - Internal Collaboration (CRM)

DC1 – Gov. & Cap.

DC2 - Agile Capability

DC3 - Investment Prioritisation & Benefits Realisation

CU5 - FIDSS

Process Optimisation (Business Improvement)

SD8 - Electronic Permit to Work (EPTW) Phase 2b

CS11 - AP Auto

Extension of Field Mobility

and Asset Management (e.g.

predictive analytics) Increased IT/OT

integration + field automation

Embed agile practices

Service Delivery

Customer Corporate Systems

Capability & Governance

Legend:

Business Improvement

Renewals & Infrastructure

Migrate infrastructure to cloud

Development Services System (Phase 1 incl. Basic Portal) DSS - Phase 2

Extension of self-service + customer automation using

BPMS platform

Replace /Upgrade Finance One

Procurement, Project and Program

Management, Business Intelligence

(especially in Finance)

Extend Implementation Plan

Benefits Delivery at December 2015

Objective Description Key Initiatives Delivered (by Dec 2015) Capability Delivered (by Dec 2015)

Smarter

Enhance core service delivery

Deliver efficiencies in our core service processes • AMIS Renewal (Maximo) • Advanced Asset Management

Deployed an industry leading asset management system, supporting decisions with accurate and timely information and leveraging it to enable advanced asset management practices

Support business process automation

Deliver efficiencies in other key enterprise processes

• Business Process Platform Supporting the transformation and automation of processes using a Business Process Management (BPM) platform

Improve yield from IT investment

Strengthen the prioritisation and governance of IT investment

• Re-align Governance and Capability • Investment Prioritisation and Benefits

Realisation

Strengthen the prioritisation and governance of IT investment while improving benefits realisation

Continue to deliver IT efficiencies

Continue to deliver efficiencies within IT by continued rationalisation of systems, capabilities and sourcing

• Back-up & Disaster Recovery Strategic use of the cloud to reduce our infrastructure footprint

Faster

Enable the business to make key decisions faster

Enhance the quality and timeliness of the data available to support key management and operational decisions

• Flood Intelligence Decision Support System (FIDSS)

• Enterprise Reporting & Data Management

• Operational Intelligence

Providing one source of the truth for enterprise KPI’s and timely operational information as well ass flood information for emergency services and the community

Increase speed of IT project delivery

Reduce the timeframe for technology projects from years to weeks or months

• Implement Agile Capability A ‘second mode of delivery’ (Agile methodology) and Agile Incubator framework has been established

Safer Improve enterprise safety Improve the management of enterprise safety

• Integrated Risk Management System • Integrated Incident Management

System

Incident and Risk management capability enhanced to promote safety, monitoring and resolution of issues

Reduce exposure to harm Reduce staff exposure to harm by using digital technologies

• Field Mobility Field mobility capability delivered to ensure workforce is informed of potential hazards

Easier to Work With Improve service for key

customers Improve service for key customer segments

• Accounts Payable Automation • Automate Procurement Processes • Automate Referrals (DSS) • External Collaboration (Self-Service)

Customer referrals system for developers, reducing response time and enabling customer self-service

Collaborate more closely with key customers

Improve collaboration with key customers • Internal Collaboration (CRM) • Intranet Redevelopment

Champion the open sharing of information and extending the use of collaborative tools

Strategy Execution: Challenges and Learnings

Challenges

Integration of IT

“Living within our means”

Domain Structure

New Leadership

Increased Accountability

Cultural Shift

Speed of Execution

Realign Governance

Model

Ensuring the Governance

model is aligned and

provides effective

oversight

Increase the speed of

execution to effectively

deliver the Digital

Strategy

Establish a high-

performance culture,

uplift capability and

increase collaboration

across IT.

Adapt and embrace

increased scrutiny of

investments and ensure

benefits are maximised

Consolidate teams to

ensure IT is unified and

integrated

Continue to drive results under funding constraints.

Significant changes to

leadership including

Managing Director, CFO,

CTO and Board.

Introduce a domain

structure to ensure

alignment with other

business units

Strategy Refresh: Second Iteration

Safer, faster, smarter and easier to work with

Digital vision

Domain themes

Strategic Digital goals

Process Automation and Integration

Enable effective business decisions through

meaningful information

Improve the value of customer interaction

Enable business process efficiency

Establish end-to-end digital capability and governance

Operational Excellence New Service Enablement Customer Focus Safety Focus Business objectives

Business vision Enhancing Life and Liveability

Customer Centric Approach

External Collaboration and Partner Channels

Self Service and Automation

Internal Collaboration Mobile Enabled

Workforce

Safety

Ease of Use

Orchestration and Self Service

Data Driven Insights

Mobility (Personal Productivity)

Asset Management and Maintenance

Operational Intelligence IT/OT Convergence

IT Asset Management

Security

Cloud and Shared Services

Culture and Change

People, Digital Skills and Talent

Collaboration and Agility

Governance

Digital Vision and

Strategic Goals have

been validated for

relevance and remain

unchanged

Domain themes have

been established

during the refresh to

further define and

support the Strategic

Digital Goals as well as

ensuring alignment

with Domains

Infrastructure

Corporate

Service Delivery

Customer

Capability

Strategy Refresh: Validation and Alignment with Domains

Strategy Refresh: Outcomes and Benefits

Capital Distribution

INFRASTRUCTURE

CUSTOMER

SERVICE

DELIVERY

CORPORATE

SERVICES 20%

30%

20%

30%

• Implement systems that are highly integrated and support the use of automation mechanisms to streamline processes

• Implement systems that are intuitive and easy to use to reduce processing and system specific training

• Enable data driven insights facilitating informed decision making

• Facilitate mobile access to data, content and process workflows

• Implement solutions that produce predictive information which will optimise the use of its assets

• Use advanced analytics to better understand operational landscape

• Integrate operational technology and IT technology to enhance management, utilisation and optimise operational activities

• Become safer using digital solutions to inform our workforce and the community with relevant information

• Enhance mobile capability in the field to become more efficient and collaborative

• Drive collaboration with industry partners to develop online space for key customer needs

• Work collaboratively with key customer segments to develop appropriate customer solutions

• Enable customers to self-serve their interactions driving greater efficiency

• Use collaborative digital capabilities to open processes across the organisation

• Well defined technology automation and support self-service capabilities

• Enhance management of IT assets to ensure sufficient benefits are derived from investment into infrastructure

• Enhance digital security to protect digital assets and maintain data integrity

• Leverage cloud and shared services models to provide flexible and scalable platforms

• Reduced process cost, effort and time

• Higher proportion of time spent on value-add activities

• Become more informed and make better decisions

• Improved decision making through availability and visibility of useful data

• Improved asset utilisation and lifecycle through monitoring of asset health

• Improved safety through less exposure to dangerous environments

• Reduced cost to serve through digital customer self-service

• Improved reputation through improved service and collaboration

• Increased collaboration across the organisation and with our customers

• Faster and more effective adoption of new technologies

• Lower cost through improved project success

• Greater success of technology adoption, resulting in more effective use of spend

Actions Benefits

• Establish the foundational capabilities, structure and governance required for

Melbourne Water to deliver on its 5 year Strategy

• Deliver prioritised list of initiatives that align to the Digital Strategy Goals and

will deliver value in the initial 12 months

• Implement quick wins that we deliver short term value for Melbourne Water

• Integrate Digital Strategy into overall organisational change to ensure

transformation is visible to, understood and successfully implemented

• Continue to mature and evolve digital capabilities by capitalising on

increasing sophistication of Melbourne Water’s expertise

• Develop capabilities that enable closer engagement, partnering and

provisioning of advice to MW IT’s business customers, providing

“value add” services whilst maturing the service delivery and

management foundation that was established in the previous phase

• Deploy more value added services for customers and cross industry

collaboration opportunities

• In the longer term MW will continue to mature its digital

capabilities including strong partnering between IT and

the business

• Digital technologies will be utilised across MW to

optimise business efficiency, customer value and

collaboration across the industry

• New services will be routinely deployed using an agile

approach

• MW should maintain a focus on continuous

improvement of its processes and capabilities, and

ensure the direction of MW’s Digital Transformation

remains aligned with the direction and needs of the

business and its customers.

ESTABLISH FOUNDATION AND GOVERNANCE

(First 12 months)

IMPROVE

(1 – 3 years)

OPTIMISE

(3 - 5 years)

Iteration and 2nd year

implementation plan

2

1

3

4

Year

5

Five Year Digital Roadmap

Melbourne Water: Digital Strategy