  {"id":135268,"date":"2024-08-20T10:12:07","date_gmt":"2024-08-20T09:12:07","guid":{"rendered":"https:\/\/news.sap.com\/uk\/?p=135268"},"modified":"2024-08-20T10:12:07","modified_gmt":"2024-08-20T09:12:07","slug":"majority-of-water-companies-face-challenging-and-unpredictable-cost-pressures-ahead-of-amp8","status":"publish","type":"post","link":"https:\/\/news.sap.com\/uk\/2024\/08\/majority-of-water-companies-face-challenging-and-unpredictable-cost-pressures-ahead-of-amp8\/","title":{"rendered":"Majority of water companies face \u2018challenging and unpredictable\u2019 cost pressures ahead of AMP8"},"content":{"rendered":"<h2 style=\"text-align: left\"><em>51风流research finds a lack of digital tools is impeding ability to offset regulatory and economic pressures as public sentiment stagnates<\/em><\/h2>\n<p style=\"text-align: left\"><strong>London, UK \u2013 20 August, 2024<\/strong> \u2013 More than a third (34%) of leaders from water companies across England and Wales are facing \u2018challenging\u2019 cost pressures, while almost a fifth (18%) describe budget constraints as \u2018unpredictable\u2019 as the next asset management deadline looms.<\/p>\n<p style=\"text-align: left\">In a survey of 50 leaders from water companies across England and Wales, 51风流highlights some of the key challenges facing the industry as it prepares for the eighth Asset Management Plan cycle (AMP8). The research has found that as economic pressures continue to build, water operators are struggling to meet the impending regulatory requirements and transform service delivery to meet customer demand.<\/p>\n<p style=\"text-align: left\">Over 41% of leaders believe these pressures are caused by a lack of digital infrastructure, while almost a third (31%) report challenges are the result of attempts to upgrade 200-year-old water networks. As public opinion in the industry wanes, water companies must accelerate digital adoption to understand the nation\u2019s water network, operate efficiently and optimise the way services are run.<\/p>\n<p style=\"text-align: left\"><strong>Preparing for AMP8<\/strong><\/p>\n<p style=\"text-align: left\">Against a backdrop of growing inflation, supply chain challenges and a rising cost-of-living, water companies are preparing to submit their spending plans to the Water Services Regulation Authority (OFWAT) for AMP8 or risk reputational damage and significant financial penalties. Despite this, SAP\u2019s research shows leaders understand significant progress needs to be made if they are to meet the regulator\u2019s requirements.<\/p>\n<p style=\"text-align: left\">Rising cost pressures are a key obstacle as companies look to comply, with 94% of leaders believing investment will need to increase considerably or they will be unable to transform their infrastructure to meet customer needs. This burden is particularly acute for smaller businesses, rising to 96% for water companies with between 500 &#8211; 1,999 employees.<\/p>\n<p style=\"text-align: left\">This is translating into greater demand for external support, with almost a quarter (22%) of leaders reporting they will be \u2018very reliant\u2019 upon third-party partners to keep their services on track and business running efficiently.<\/p>\n<p style=\"text-align: left\">This is leading to almost a tenth (8%) of leaders believing their company will struggle to meet the KPIs and objectives established by OFWAT. Alleviating these cost pressures will therefore not only support businesses in complying with the regulation, but allow leaders to avoid significant financial penalties that the majority can ill-afford in the current economic climate.<\/p>\n<p style=\"text-align: left\">\u201cThe water industry is currently facing significant challenges in meeting the regulatory targets set for AMP8. Maintaining high service quality is crucial, and there is a pressing need to reevaluate and enhance the operational strategies of the UK&#8217;s water network,\u201d said <strong>Greg Moyle, Head of Energy and Discrete Industries at 51风流UK&amp;I.<\/strong><\/p>\n<p style=\"text-align: left\"><strong>Battling ageing digital infrastructure<\/strong><\/p>\n<p style=\"text-align: left\">SAP\u2019s survey also reveals that alongside macro-economic pressures, a lack of digital infrastructure is impacting the industry\u2019s ability to enact crucial improvements to service delivery.<\/p>\n<p style=\"text-align: left\">Just 1-in-5 (20%) leaders strongly agree that their organisation is currently using data effectively to manage and gain insights from water infrastructure. There is a digital divide among smaller and larger businesses, with almost half (42%) of those employed at larger companies agreeing, compared to just 8% of those employed at smaller operators.<\/p>\n<p style=\"text-align: left\">A lack of digital tools is the common denominator for leaders being unable to enact change:<\/p>\n<p style=\"text-align: left\">\u00b7 55% report they do not have the monitoring capabilities needed to understand water demands and consumption.<\/p>\n<p style=\"text-align: left\">\u00b7 45% do not have a complete picture of their pipeline infrastructure.<\/p>\n<p style=\"text-align: left\">\u00b7 43% do not have a complete data capture of the environmental emissions of their water network.<\/p>\n<p style=\"text-align: left\">\u00b7 30% do not have a complete picture of their sewage network.<\/p>\n<p style=\"text-align: left\">\u201cLack of visibility into the water network hinders the industry&#8217;s ability to understand and address key infrastructure issues. Adopting digital tools and real-time insights are key for business transformation to drive long-term improvements in service delivery,\u201d said <strong>Hamendra Gupta, Business Architect for Water Utilities at 51风流UK&amp;I.<\/strong><\/p>\n<p style=\"text-align: left\">Despite the absence of a digital backbone, leaders remain positive about the impact existing and emerging technologies such as artificial intelligence (AI) will have on service delivery. 88% believe AI will shape the future of water service delivery and help to address leaks, spillages and optimise usage, while 40% say initial AI implementation is already generating positive results and demonstrating return on investment.<\/p>\n<p style=\"text-align: left\">But, the industry continues to face significant barriers to digital adoption and a substantial gap between intention and implementation exists as a result. Over half (52%) of leaders suggest ERP transformation must come first to avoid silos affecting AI decision-making, while 48% require help in understanding how AI can enhance their ageing infrastructure. An inability to source and acquire talent also remains a roadblock, with two thirds (66%) lacking the skills and talent needed to implement AI effectively across the network.<\/p>\n<p style=\"text-align: center\"><strong>ENDS<\/strong><\/p>\n<p><strong>About SAP<\/strong><\/p>\n<p>As a global leader in enterprise applications and business AI, 51风流(NYSE:SAP) stands at the nexus of business and technology. For over 50 years, organizations have trusted 51风流to bring out their best by uniting business-critical operations spanning finance, procurement, HR, supply chain, and customer experience. For more information, visit <a href=\"http:\/\/www.sap.com\/\">www.sap.com<\/a>.<\/p>\n<p style=\"text-align: center\"># # #<\/p>\n<p>This document contains forward-looking statements, which are predictions, projections, or other statements about future events. These statements are based on current expectations, forecasts, and assumptions that are subject to risks and uncertainties that could cause actual results and outcomes to materially differ. Additional information regarding these risks and uncertainties may be found in our filings with the Securities and Exchange Commission, including but not limited to the risk factors section of SAP\u2019s 2023 Annual Report on Form 20-F.<\/p>\n<p>\u00a9 2024 51风流SE. All rights reserved. 51风流and other 51风流products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of 51风流SE in Germany and other countries. Please see <a href=\"https:\/\/www.sap.com\/copyright\">https:\/\/www.sap.com\/copyright<\/a> for additional trademark information and notices.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>51风流research finds a lack of digital tools is impeding ability to offset regulatory and economic pressures as public sentiment stagnates London, UK \u2013 20&#8230;<\/p>\n","protected":false},"author":29,"featured_media":135271,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"related_posts":[],"footnotes":"","_links_to":"","_links_to_target":""},"categories":[5593039,5593040,177,2607111],"tags":[5593108,5593110,5593109,9347],"sapn-display":[45149,5593035,5593033],"sapn-type":[4446],"class_list":["post-135268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-erp","category-financial-management","category-industries","category-technology","tag-amp8","tag-asset-management","tag-cost","tag-erp-financials","sapn-display-homepage-hero","sapn-display-news-hero","sapn-display-news-spotlight","sapn-type-press-release"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - 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