Digital water – building a conceptual cost-benefit framework based on the experiences of frontrunners

The ability to meet challenges of our time with ‘digital water’ is illustrated and praised in reports such as that of the IWA. On the other hand, making business cases for digitalisation proves difficult and the introduction of further digitalisation is mostly done on the basis of conviction or vision. There is also the argument that smart water carries a so-called ‘moral hazard’, namely the implicit belief in technological solutions. This could blind us to the underlying transgressions of planetary boundaries.

Drivers of frontrunners

Everything comes together in identifying the business and societal drivers of frontrunners in digital water and its outcomes. Here we learn these companies shaped their digitalisation (vision, business case) and what the end results are (evaluation project or evaluation implementation). We also seek to answer the question to what extent the first-mover disadvantage exists, or to what extent being ahead has led to lock-ins. To what extent did this affect the water companies or did it influence other design choices?

Costs and benefits

In this project, we also look at the costs and benefits of digital water, and not just its financial aspects. Different dimensions of social costs and benefits are considered, such as social and ecological aspects.

Scenarios

A number of scenarios (visions, implementations) are developed, relevant for the Netherlands and Flanders. From the broad framework of costs and benefits, the research focuses on the optimal form and degree of digitalisation. This includes both the perspective of individual water companies and the national perspective. Indeed, these two perspectives do not necessarily align. The framework and these scenarios are intended to support water companies in further digitalisation and the development of their vision and decision-making therein.

Frontrunners and framework

The project starts by taking stock of progress in digital water at drinking water companies worldwide. Which water companies are in the lead and which are not progressing as fast? Where do the Dutch and Flemish water companies stand? Then, based on surveys, interviews and workshops, an overview is made of the motives, reasons and motivations of companies that are taking the lead. Why are they investing in digital water? And what challenges, developments and threats are involved?

Descriptions are made of business cases and other applied approaches. Evaluations take place of (pilot) projects and implementations. Based on all this, we create an overview of best practices for Dutch and Flemish water companies, including the foundations involved, including IT architecture and infrastructure. Finally, we develop a framework for determining the social costs and benefits of digital water at the level of individual applications with financial, environmental, social and possibly other dimensions, using existing building blocks if possible. This framework will be applied to a number of illustrative scenarios, relevant to drinking water companies.

Informed decision-making

The results of this project increase understanding of the state and potential of digital water globally. By uncovering underlying reasons for smart water decisions and looking at the successes and challenges, a better understanding of the do’s and don’ts emerges.

The developed cost-benefit framework can contribute to a structured and uniform basis for decision-making on digital water investment for water utilities. It incorporates as many relevant dimensions as possible. When this framework is applied to illustrative examples, understanding of it, including its merits and limitations, increases.