July 31, 2021

Lessons Learned in Scaling Digital Solutions in the Water Sector

"Digitalization is transforming how utilities function and how water services are delivered," the GSM Association (GSMA) asserts in a report focusing on scaling digital solutions in the water sector. The report adds: "New technologies not only enable existing systems to operate more efficiently, but also make new service delivery models possible. Some innovations are already available in the water sector, with some solutions scaling, while newer ones are developing."

GSMA's Mobile for Development (M4D) Utilities program works to unlock business models that leverage mobile technology to deliver better and more affordable energy, water and sanitation services in emerging markets. The UK-based organization, which represents the interests of mobile operators worldwide, points out that "Through our Innovation Fund we have provided catalytic support to start-ups, non-governmental organizations, and utilities across Asia and Africa to trial and scale new models." What is more, "This support has helped validate and launch a variety of digital solutions to expand and improve water services." The report examines the experiences of two past Innovation Fund grantees, Wonderkid and CityTaps whose journeys to scale hold lessons for all seeking to accelerate digitalization.

"Both companies are business-to-business (B2B) service providers," the report explains. "Wonderkid provides bespoke software solutions to 40 water utilities in Kenya and other African markets. CityTaps provides pay-as-you-go (PAYG) digital metering solutions to utilities. Currently operating in West Africa and Central America, CityTaps is looking to expand in the Kenyan market. Based on the experiences of these two grantees, we identify some critical considerations for innovators at different stages, from ideation to validation, iteration, refinement, scaling and widespread adoption. Their experiences also highlight some of the strategies and critical stages at which different actors can support innovators to scale, such as funders and the public sector."

The GSMA presents the following supporting actions for key stakeholder groups segmented into five categories:

Funders and Donors
  • Invest in developing digital ecosystems as well as specific solutions and businesses;
  • Support the development of digital skills within utilities and among their users; and
  • Structure support to innovators such that capital is available both at the ideation and scaling stages.
  • Be conscious of the capital costs faced by utilities, and structure product offerings to account for these; Maintain a lean approach to the iteration process and develop an adaptable business model; and
  • Focus on building trust and awareness to drive service adoption.
  • Mark out a pathway and take steps towards progressive adoption;
  • Make investments in digital readiness;
  • Demonstrate leadership in digital adoption; and
  • Invest in customer education and promotional campaigns to drive adoption.
Mobile Network Operators (MNOs)
  • Pursue partnerships to enhance customer base, product offering and brand image;
  • Create partnerships with utility service providers to encourage service uptake in new markets; and
  • Focus on creating a more accessible environment for third parties.
Government and Regulators
  • Put in place strong performance management systems. This is what creates some incentives for performance improvements; and
  • Ensure that policy allows for utility service providers to form partnerships with innovators and improve their service offering.

Having watched the rapid digitalization in low- and middle-income countries (LMICs) over the past few years, I concur with the report's conclusion:
No single actor can scale digitalization without working with others. Governments, utilities, innovators, MNOs and donors all have unique capabilities and capacity, and it is only by working together that the full benefits of digitalization can be realized. While new innovations are always emerging, there are already many viable technologies in the water sector that have yet to see widespread adoption. These technologies provide the opportunity to tackle long-standing and intractable challenges in the water sector, and benefit hundreds of millions of people who still lack access to a safe, affordable and reliable water source.
Do you agree with the recommended supporting actions for key stakeholder groups? What are your recommendations for transforming how utilities function through digitalization?

If interested in learning more about PAYG as a business model in delivering utilities to people in LMICs, I recommend reading "GSMA Report Explores the Value of Pay-as-You-Go Solar for Mobile Operators in Africa" previously published on this blog.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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