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One month on: The open water market maze

Just over a month into the open water market and our experience of what action companies have taken so far has been interesting and actually quite polarising.

At one end of the spectrum, we have seen a terrific amount of interest in our innovative self-supply approach which gives clients an involved, proactive hand in shaping not only their own organisations’ water strategies but also the future of the marketplace. This is immensely encouraging because the approach should be of considerable benefit to large multi-site customers or high water consuming operations; especially in hospitality, retail, logistics and across the public sector.

At the other end of the scale, there appear to be many organisations that have opted for the ‘wait and see’ approach; presumably anticipating that their billing will be mostly unaffected by the market opening or perhaps these businesses are not regarding their water procurement as a priority for action. It could be that, with media attention firmly focused on broader political matters, they are still blissfully unaware of the market overhaul. Or, perhaps they did dip a toe into evaluating alternative suppliers and tariffs, but found the whole thing far too complicated.

Complicated, it most certainly is.Through-the-maze-blog-image_Apr17

The Central Market Operating System (CMOS), the IT backbone of the new open market, has over 1,700 wholesale tariffs for customers to deal with; a complexity that we had hoped would be reduced by the new market. In fact, of the 1,500,000 plus transactions in April, 72% have been made by MOSL demonstrating an imbalance of activity on the system.

There’s also information missing. Some of the missing data includes yearly volume estimates that have not been entered into the system by wholesalers. This is likely to mean that customers will receive over-estimated bills, based on the maximum capacity of their meter, as early as their first ever retailer bill in May: this is definitely one to look out for!

Finally, there are huge inconsistencies in the way that company data has been inputted which means that, initially, any accurate site benchmarking will be extremely hard to achieve via CMOS. We have requested data rectifications as a matter of urgency and we await news on this.

Our own clients are somewhat protected from these issues because they have access to our Waterline system –independent, robust and accurate data on which they can base buying decisions. It’s true that we always go on about having a good, cleansed data set prior to considering switching supplier, but we really can’t stress enough how important it is. If you want to avoid the potential of being over-charged and then spend many man-hours working through erroneous bills and negotiating rebates, a clean data set is essential. There’s no doubt that being armed with a good understanding of your organisation’s operational water footprint, coupled with appropriate industry benchmarking information, will support any procurement exercise. Whether you’re simply challenging an incumbent supplier or conducting a full-on tender process in readiness for supplier switching, this understanding is critical.

Need help finding your own way through the open water market?  Give us a call or email info@waterscan.com: we’re here to guide you.