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  • David Tyler

Water Competition & Interoperability

Updated: Sep 17, 2018


Bilateral (or, rather, multilateral) interactions continue to be a challenge for the market.

Context


The competitive non-household water market in England is now over a year old and is proving that the underlying processes are fundamentally stable for allowing customers to act on their ability to switch retailers, should they wish. There is still work to do and awareness continues to grow - but there's a strong foundation, for sure.


There are challenges, though. Two major ones are the efficiency of communication between wholesalers and retailers (bilateral interactions) and data quality. In fact, there is an overlap between those: if retailers find a data issue, they usually need to engage a wholesaler to get it fixed. That symbiotic relationship means that a problem in either aspect would be hard enough: a problem in both aspects is serious indeed.


Digital Strategy Committee (DSC)


The DSC is a MOSL group looking at technology in the market, such as the potential of blockchain. Bilateral interactions are a key topic for them and they've convened a subgroup to develop the business case and requirements for a common solution across the market.


I have had some involvement in past industry work on this area and recently shared some thinking with the DSC on Nebraska - the Brodick Consulting concept for what a common solution may look like. While it's a fully-defined solution, our intention remains the same: to help the industry establish the most effective solution, even if that is not Nebraska. So here's a summary of the key components that underpin Nebraska and that we think would help all market parties.


GUIDING PRINCIPLES

Nebraska was based on feedback to some principles we posted on our website in early 2017. It may not be a complete list and you may disagree with some but the guiding principles were:

  • There should be a single point for all LVI and HVI interactions (and MVI, if adopted)

  • Standards should be formal but any investment to OSD601/OSD602 should be respected

  • There should be no dependency between parties on their method of interaction

  • The overall trajectory should be towards digital interactions: ‘LVI only’ companies should not be disadvantaged but nor should their preference limit the scope for digital integration

  • Companies should have the flexibility to manage their own path to automation

  • The standards for market transactions should be used for bilateral ones as far as possible

  • Payment for any solution should be fair and reflect a party's chosen ways of working


CATALOGUE AND TRANSPORT STANDARDS

There was a standard for digital interactions developed before market opening, at a time when attention was on the compliance aspects of getting ready for market, understandably. The bilateral conversation, though a concern, was never going to be allowed to distract from that core trajectory.


Even so, we did develop some standards and, as a group, I think we achieved a lot in a fairly short period of time. Perhaps with hindsight it was always going to be a challenge for the work to be widely adopted before market opening or even to attract the level of formality that would maintain standardisation beyond, however. It was clear that wholesalers needed to offer something to their retail customers to help with raising operational requests, even if that gave rise to different ways of working - and many portals to visit.


On top of the formalisation of the standards, there are some things that ought to evolve, in part because those initial standards were seen as an interim step anyway but also in part, frankly, because there are some aspects that we could and perhaps should have done differently.

An enhanced catalogue may well be needed with the following updates (expecting that any solution would convert to/from the existing standard, where equivalent transactions exist):

  • Keep transactions focused. It makes sense for forms to cover many scenarios but less so digital transactions. In practice, this is a presentational point because transaction payload between scenarios has a lot of mutual exclusivity anyway. This approach would make things easier for developers and users in the long run, however.

  • Strengthen the transport standards. A structured XSD, with ‘human readable’ data items and values would make for much easier handling and utilisation by users and for automation.

  • Extend the catalogue to cover:

- More of the end-to-end processes and to improve compliance to WRC

- Enabling standards of service management and reporting

- ‘Value add’ or additional information services that wholesalers may wish to provide

- Data management messages to streamline the reporting and resolution of issues.

- Enable some of the other concepts set out here


Of course, these could be implemented gradually but a central platform ought to help that.


ON USING CMOS

I understand the appeal of having all interactions go via CMOS and there would be some clear efficiencies and opportunities. Recently, I wrote a blog item setting out some counterpoints to using CMOS for bilaterals but that was more to help the overall discussion than to suggest that it would be counterproductive entirely. My personal instinct is that CMOS may well be the best ‘steady state’ option, even if it is trickier to implement.


One major counter to that would be if there was any appetite to harmonise with Scottish Water Wholesale down the line but there are many impediments to that happening. Similarly, a bilateral solution could be made available to certain parties like developers but, again, that may not be palatable (and a common portal specifically for them could still be created if needed).


By ‘steady state’, I am referring to a position of stability in the requirements and a position of consistency in adoption across the market. My concern would be that the longer it takes to establish an effective solution, the greater the problem becomes in the short term. Agility and flexibility are crucial to some of the observations and recommendations that follow, some of which do not exist in CMOS yet. Perhaps a stabilising solution is needed to pave the way to a full CMOS implementation in the long run.


WORK CENTRES AND MULTI-QUEUE FUNCTIONS

The ability to separate out work into content-specific tranches helps keep things moving in sequence, while also allowing specific teams and systems to get at the data they need more readily. This is not a capability in CMOS yet but I think it is a necessary function for managing the adoption of common standards. Not only would this allow parties to calibrate how they consume each transaction type but they could even ring-fence those they don’t intend to act on at all (such as ones received for info because they are the wholesaler of the other service).



In my view, the work centre mentality is critical to not only making these processes more efficient but also enabling parties to manage how they automate their processes at all.


SELF-NOTIFICATION

One of the drawbacks with using a wholesaler’s portal (or indeed CMOS) can be the need to re- key information either into the portal from CRM/ERP systems or vice versa. A self-notification message (as HVI) from an LVI input can mean that CRM systems can be updated (since many can store XML messages anyway, even if they don’t process the payload). That can also help with managing the path to automation, perhaps negating or delaying the need to build outbound automation capability.



CASE MANAGEMENT & STANDARDS OF SERVICE

I am a firm believer in using metadata to determine processes, transactions and performance standards rather than hard-coding, making setup and maintenance straightforward. It also makes it easy to map the possible next steps by either party in an ongoing exchange, improving the workflow management capabilities.


New cases are triggered by certain transaction types, where the expectation is an extended series of interactions - what we call dialogues (while one-time, one-way messages are called monologues). For cases that have one or more standard of service, an epilogue is a post- completion summary of the standards of service, viewable through LVI or HVI, as required - and reportable to support market compliance.


INCIDENT REPORTING & DOCUMENT SHARING

While not strictly form/transaction related, the benefit of a single channel for communicating incidents is clear. In Nebraska, the vision is that parties can specify whether to send broadcasts to a specific party, to a subset of parties based on their role (i.e. just their contracted retailers) or to all parties in a group across the market. Then the broadcast becomes visible to all relevant parties, who can then track the incident (or other notification type) as required.


In our vision, broadcasts can have links or documents associated to them. We would expect that most documents being shared are in support of transactions, for example where the customer has signed a form or to share drawings. Document sharing is a distinct function so documents can be shared independently of broadcasts - or for that matter, transactions. Again, documents can be shared with a specific company or a group of companies.


USAGE & SUBSCRIPTIONS

The subscription model was designed on the assumption that the service would be provided to parties on a charged basis and was conceived as being an important part of establishing the standards across the market in its own right. Companies would be able to calibrate the service to exactly how they need to work. Generally speaking, I believe the basic service should be as low cost as possible, increasing with usage, both functional and volumetric. There is still some uncertainty on volumes and the size and scale of attached documents (though I do not advocate using .PDF versions of forms as being sustainable or desirable, long- term), so some kind of cost adjustment mechanism may make sense as a way of keeping cost down (through de-risk).


So what next?

Well, as a topic this represents somewhat of a dilemma for us: Nebraska stems from a desire to build on earlier personal contributions and add value but it does not align well with Brodick's strategic aims to help raise the standards of data governance, quality and analytics in the market, except in the abstract of improving the information flow that in turn may result in better data quality, sooner.


Our work thus far may play well to our ideals of being proactive and prepared to put the market interest ahead of our own but of course there is a limit to how far we can take that. Even so, with some level of encouragement, we will take Nebraska forward. Whether that encouragement comes from the market as a whole, from individual parties or perhaps from one/some of the leading solution providers (such as CGI, C&C Group, AMT Sybex), frankly we're open minded.


If you would like to know more about Nebraska or would like any input on your own plans for addressing the challenge of bilateral interactions, please get in touch.


#bilaterals #openwater #mosl

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