Inconsistent communication has been the bane of the water market’s existence since it opened more than a year ago. Now, at last, a solution is closer to being found.
The water retail market opened in April 2017 and, since then, it has continued to grow and evolve. As of 1 June 2018, there were 747 active contracts between wholesalers and retailers.
However, there is no standardised method by which retailers and wholesalers should communicate. This is adding complexity for retailers, which find they have to deal with 20 different wholesalers all using different methods.
As it stands, market forms and communications are delivered through bespoke wholesaler “bilateral solutions”, meaning retailers must work with a lot of different forms. This not only takes up time and staff resources, it also costs them money.
The second year of operation is now fully underway, could a cure be found for the market’s Achilles heel?
What is the problem?
In short, the issue is that there is no standardised approach to the way retailers and wholesalers interact on things like new connections, planned or unplanned events, and complaints. This has resulted in a diverse and complex set of portals and other technological solutions being offered by wholesalers, which is taking up a lot of retailers’ time and, ultimately, costing them money.
This lack of communication is partially responsible for a surge in customer complaints since the market opened. The Consumer Council for Water found, in its complaints league table for the first year, that some complaints were taking much longer to resolve than they should. The Council put these delays down to “inefficient communication between the retailer and wholesaler”.
A “bilateral solution” to these communication issues was originally in scope for market opening but was removed late on, and this left wholesalers to make their own arrangements for how to engage and interact with retailers.
This issue has provoked a great deal of conversation among those with an interest in the market over the last year or so and, many workshops and discussions later, there has been some progress.
What’s the solution?
The DSC has been working on a new vision for how technology could help the market with a new common solution for all trading parties to use in relation to bilaterals. This could take the form of a centralised and standardised portal or “bilateral hub”.
Nick Rutherford is programme director at Bristol Water, and chairs MOSL’s Digital Strategy Committee. He tells Utility Week MOSL is looking at “a number of potential technology solutions” to understand how they could remove existing problems, create new efficiencies and improve service between wholesalers and retailers. “Both process and technology improvements are being considered to support the existing arrangements and these are being considered using a cross industry team of trading party representatives,” he adds.
Much has accelerated in recent months and in July, a request for information was issued to several potential vendors to understand what a new solution could look like. This is now in full flight and at the end of August, members of the DSC and the retailer-wholesaler group will evaluate the potential vendor presentations ahead of a report back to the MOSL board in September.
The Committee says it wants to communicate this activity to trading parties, so people feel informed about what the opportunity is and how it will help wholesalers, retailers and customers.
As switching continues to increase and more retailers come in, the problems experienced today will become worse if more friction enters the market – to the detriment of customers.
Rutherford writes, in a column for Utility Week’s sister title Water.Retail that market players must use the learnings from the first 16 months of the market to make some “step-change improvements”.
What do retailers and wholesalers say?
Jerry White, operation CIO, Thames Digital, Thames Water
A year after the water market opened for business and following a significant amount of feedback elicited from trading parties we have concluded that several significant and common problems exist with the way requests for market services are made and transacted between retailers and wholesalers through the “bilateral processes”.
Despite many of the wholesale trading parties having invested to some degree in technology solutions to offer self-service application solutions – often through an internet portal – there has been little common approach to these solutions, resulting in a diverse and complex set of technology variants. This has made it extremely difficult for retailers who deal with multiple wholesalers to engage effectively, repeatedly and without error on behalf of their customers.
This often results in rejection of requests by wholesalers and, ultimately, delays to the delivery of service to the end-customer.
A technology solution to many of the problems currently being experienced in the bilateral process has been proposed by MOSL and a group of technology leaders from various trading parties – the Digital Strategy Committee (DSC).
This solution features a central solution that will allow exchange of requests between retailers and wholesalers in a consistent manner and could also be a platform for sharing information, market data, analysis and providing additional services within the market to trading parties and even end-customers.
The benefits to a wholesaler could be as follows:
- Easier and more consistent applications for services will reduce errors for wholesalers to process, reducing handling time and costs within the wholesale market teams and improving the speed of service delivery and retailer/customer satisfaction.
- The solution will enable integration with wholesale technology investments and allow better retailer experience without significant investment right off.
- A better and more consistent subscription-based solution should allow improved ease of access to the market for new retail entrants, allowing wholesalers to manage their diverse retailer base.
- A central solution could provide a platform for wholesalers to offer additional services to the market and could provide a more centralised option for sharing data – GIS data for meter locations – and communications between parties – details of service interruptions during incidents.
Darren Thresh, business liaison manager, Yorkshire Water
We must be mindful that the main communication mechanism that exists between retail and wholesale participants is the bilateral forms and processes defined by the operational terms within the codes. These are standard processes and arguably should never have been removed from the scope of the central market solution, which allowed diversification across the wholesale landscape.
Yorkshire Water implemented its bilateral solution – C&C’s SWIMPool – at the very start of shadow operations, six months before the opening of the market, but resistance to use was experienced at early contract stages with retailers who were looking to develop customer levels in the Yorkshire area. Of course, Yorkshire Water was only one of the wholesalers, which were all buying or building solutions to the same local problem: how do we offer this service?
The segregated nature of the wholesale responses has created the frustration that retailers face now. Each wholesaler has a different solution and technically integrating with all wholesaler solutions to drive efficiency would be extremely expensive. We must remember, though, that some forms are wholesaler-initiated. The ability to push notifications to each affected retailer during major incidents would also be of great value.
The current DSC bilateral initiative will certainly remove the frustrations that surround the use of so many wholesaler portals, enhance the retail-user experience, and standardise operational performance reporting across the market. More importantly, however, the initiative will improve the mechanisms by which retailers and wholesalers collaborate to deliver excellent service to our customers.
Establishing a solution that provides all retailers and wholesalers a single experience offers great market efficiency. Of course, trading parties with high-volume requirements for these forms should also be able to make a single investment decision to automate and integrate their back-office solutions with a single hub to access all other trading parties.
Nathan Morgan, waterline development and AMR manager, Waterscan
At present, market forms and communications are delivered through bespoke wholesaler bilateral solutions and retailers and self-suppliers must adapt to a multitude of different form completion methods, processes once forms are submitted and varying outcomes, dependant on which wholesaler region that the end user is located.
Retailers and self-suppliers also experience differing detail, regularity and format of reporting of bilateral SLA performance from wholesalers. This acts as a barrier to understanding wholesale performance across the market, learning best practice and implementing this knowledge with other wholesalers, to ensure end users receive a consistently high level of service no matter where their business is located.
The proposed bilateral solution offers retailers, self-suppliers and wholesalers a range of benefits that will enable productivity gains, data quality improvements and an improved end user experience. It will provide a simplified bilateral process for retailers and self-suppliers, with only a single portal to administer user access for and train staff to use, as well as the ability to use APIs to connect for system-to-system bilateral transactions.
Integration of the market data Set from CMOS into the bilateral hub will improve the quality and completeness of data being submitted through bilateral forms by retailers and self-suppliers. This will reduce rejection rates of bilateral forms from wholesalers and prevent unnecessary resubmission of forms by retailers and self-suppliers.
A centralised database of bilaterals will permit standardised reporting of wholesaler performance against market SLAs, allowing comparisons to be made and trends identified. From this analysis, retailers and self-suppliers will be able to work with wholesalers to improve and achieve the highest level of performance for end-users.
Waterscan believe the bilateral solution will allow us to focus on improving the experience of end-users, rather than struggling with the administrative burden of the current, compartmentalised structure of multiple wholesale portals.
Josh Gill, chief executive, Everflow
We are delighted to see that MOSL is doing the right thing for customers by looking to unify the operational experiences. It’s a move that we expect all parties in the market to support as it’s clear it is the right thing to do for the best long-term customer experience.
It is a move that will reduce cost within the market, lower barriers to entry for new retailers and give customers the consistent experience they want and deserve nationwide.
We would be exceptionally disappointed to see anyone push back against this move as the more the implementation is dragged out, the more cost that retailers and customers must bear.