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CLIENT CASE STUDY


Government-owned utility: Developing a strategy and business model

A government-owned utility and Accenture collaborated to define a new operating model for future success.

Overview

The client is a government-owned, regulated water utility. Serving over one million households in its home country, the organization manages numerous water supply sources, including major waterways and drainage systems.

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Opportunity

The client faced a number of significant challenges, including population growth, limited capital availability and concerns over the long term security of supply issues. The company was therefore working to earn the trust of its customers and stakeholders and demonstrate that it was addressing critical issues of concern through boosting its finances and enhancing its reputation with stakeholders and regulators. This required a fundamental new business model to help frame and prioritize critical actions.

Solution

The client and Accenture worked together to create a transformation roadmap in pursuit of a revised business model. Essential project activities included:

  • A current state assessment of the client’s capabilities using Accenture’s High Performance Utility Model and global water benchmarking capabilities.

  • A corporate overhead assessment to identify cost reduction opportunities.

  • An analysis of potential asset sales to improve financial health.

  • An assessment of proposed new commercial ventures (such as waste to energy) and a commercial model to progress innovative ideas from concept to successful venture.

  • An analysis of the target state business model, including customer interactions and essential strategic capabilities.

  • An assessment of customer value propositions and the degree to which the organization was currently meeting customer needs.

  • An investigative and then final workshop with the client’s leadership team and board to jointly clarify issues and agree upon required solutions.

The client and Accenture also assessed the change journey needed to deliver the above, including a description of the high level future state operating model.

Results

Close collaboration between the client and Accenture has provided the utility with a clear understanding of the required business model for future success. With this high-level, future-state operating model, the utility has set itself the goals of:

  • Financial health by 2017.

  • Avoidance of US$7 billion in future costs (via new approaches and services).

In addition to providing a clear view of required enhancements, including critical customer-focused capabilities, the new business model identifies new revenue opportunities and required changes to successfully execute at speed, including partnerships and operational and commercial capabilities.

With this implementation roadmap, the client is better prepared for asset sales, and is better positioned to strategically respond to future organizational and industry changes. The utility can now focus on solving urgent, short-term issues–while planning and initiating actions for high performance in the long term. Critically, it can now clearly show how it adds value to its community, how current water services and costs will improve, and how it is addressing the security of supply issues in its operating area.

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