Going against the flow at Severn Trent Water

Transformation has been flowing continuously through Severn Trent Water for the last five years. The floodgates of change opened when a new board arrived at the then troubled utility, bringing with it a new CIO in Myron Hrycyk. During his time in the role, the company has gone from having problems with regulators to fielding a number of acquisition offers.

Severn Trent Wateris the second largest water provider in the UK and is one of the few water utilities on the London Stock Exchange.

“We produce enough water each day to give everyone in the world a glass of water,” says Hrycyk. His transformation project took a lot of effort to get going but, once up and running, has proved unstoppable.

“It’s a lot like moving a flywheel, it takes a lot of initial effort, but then it keeps its own momentum,” he says.

“The transformation is driven by our KPIs, which are focused on health and safety, customer experience and on preventing leakage – and IT has really contributed to these.

“The company has totally turned around and we have built up a really strong relationship with the regulators,” the Coventry-based CIO says, reminding us that it’s only five years since Ofwat fined Severn Trent £35.8m for delivering poor service to its customers.

“We see ourselves as progressive and we are keen to see how we can change the regulations so that there can be an introduction of water trading, rather than having all organisations producing water.

“Also, can water companies look to merge or expand so that they can gain economies of scale? We are working with the regulators to see how we can move the agenda on.

“After all, if we can run a really lean operation, then that strengthens our position,” he says of the changes that have transformed for Severn Trent from bête noire to darling. But, he says, Severn Trent isn’t just looking to benefit its shareholders, and he and the rest of the leadership team know the benefits they can offer the UK and their local economy.

“Some 80% of our spend is with local UK businesses and we contract with and use a lot of local services. Over the five-year period we are spending £2.5 billion on waste and water services in our region and for the Midlands we are a key contributor to the local economy,” he says. The company employs 6,000 people across the region.

Hrycyk is also head of the shared support operation within Severn Trent, which operates the six key processes of the organisation, such as finance. Shared services is also at the heart of the organisational programmes behind the transformation of Severn Trent Water. Hrycyk describes each of the strands.

“Plan to Adopt is the need for the company to have assets and [the arrangements for] planning, building and maintaining these,” he says of the physical items that keep water companies up and running, from tunnels to treatment plants.

“Maintenance is the regime and funding process for the infrastructure and managing the work crews. Hire to Retire is the management of people, Build to Collect is the management of payments and Procure to Pay is about the buying and receiving of items.”

Continuous improvement

Hrycyk describes his role at Severn Trent as “looking after the end-to-end processes of the entire company”.

The processes stretch beyond back office and the CIO and his team are focused on how they can help Severn Trent achieve those KPIs around issues such as leakage and customer care. Here the CIO – a keen proponent of the Kaizen philosophy of continuous improvement – has been helping develop ways in which maintenance and repairs can be made with a single visit to a property, saving time, money and resources. Mobile technology in particular is helping.

“Mobile work scheduling has helped us make these improvements,” says Hrycyk. “When I joined five years ago the chief executive asked me to transform both IS and the business processes. He told me we were going to create a process-driven organisation to simplify the company with lots of productivity enhancements, to take our people on a journey so that employees have an end-to-end understanding of our process.

“It was very clear that this was going to be about people, process and technology.”

One initial technology change was the implementation of SAP across the organisation, something Hrycyk had achieved in previous CIO roles.

“With the SAP in place I found myself able to look across the entire organisation and the role of the CIO is not just about technology, it’s about business processes and business skills, so you find yourself stepping into the process transformation remit,” he explains.

“For me I had experience of this when I was at Unipart, so I came equipped for lean operations.

“Communications is essential to bring people along with you, which is critical. One of the approaches I take is that with any of these changes it is business-in and not technology-out to the organisation.

“We put a lot of effort into what this approach does for the people out in the field and how it helps them to help the customers. Doing that is all about position and how we can help them do their jobs better. It could be that we are making it easier to capture information so that in the future we don’t need to go and gather the information separately.

“We have learnt through the transformation that you can’t do enough in terms of communicating to people, speaking their language and finding out what change means to them. So these are not technology changes, they are business changes,” he says.

This isn’t to say that Hrycyk hasn’t had to carry out some major technology integrations, though that also involves building relationships – with suppliers.

“Throughout the transformation journey as a CIO you have to place bets on companies that you believe fit your strategy and will be there for the long game. Azzurri was a bet,” he says of Severn Trent’s relationship with the managed communications services provider that is also used by his fellow CIO James Thomas at the University College London Hospitals.

“We liked the business relationship you can build with them and we have a very good dialogue with them. So a new telephony infrastructure was commissioned, which was critical to our call centre people.

“Also as an organisation we have a high reliance on mobile and Azzurri bring together the networks for us. We have Avaya in the call centre following a false start with Cisco and it has turned out to be a good move with a quick implementation,” he adds.

Fixed income

Severn Trent Wateris also a major user of Blackberry devices and applications for its mobile workforce. It has removed desk phones from all but a few members of staff in the Coventry office, and instead all workers use their mobile devices for voice communications.

“I expect to see further demand for and investment in mobility for the work crews,” says Hrycyk.

“I removed the fixed lines following a survey my department carried out into their usage. It showed they were never used, and that there was an instant return on investment from removing them.

“I look for suppliers that can bring extra skills to the organisation,” Hrycyk says of his technology choices.

“I’m now planning for 2015 to 2020 and I expect a big increase in mobility and to see more use of video and collaboration software,” he says of the network demands coming downstream.

“As a water utility, we already run big infrastructure and we can collect a lot of data and use that data to manage our infrastructure in a much better way. If you look at other sectors, there will be a demand for a significant amount of data capture over the next five years.”

Hrycyk expects machine-to-machine sensors to revolutionise the water supply industry as the machines, pipes, buildings and plants that utilities operate become networked to their core systems. With maintenance, leakage prevention, health and safety and cost control critical to the operation of a water utility, the early warnings that could be extracted from these Big Data sets could provide a key business strength to companies like Severn Trent Water.

“Data halls and cloud computing will help with these challenges going forwards,” he says.

Myron Hrycyk CV

2008-present: CIO, Severn Trent Water 2006-2008: CIO, NYK Logistics 2001-2003: Studied for MBA at University of Birmingham 2001-2006: IT director, Unipart Previously: Senior IT roles at Oxford University Press, Hodder Headline and Xerox Europe