MANAGEMENT INTEGRATION 7
TheSouthern part of Australia hosts the Great Sandy Desert. The onlyriver present, River Murray, has shriveled over time and has becomeunreliable as a water source for the region. South Australian Water,commonly known as SA Water, is the company that supplies water tothis region (Thorogood et al, 2004). SA Water endeavors to secure thewater needs of this expansive region from Adelaide to the globallyrenowned Barossa Valley vineyards.
Deliveringwater to the populace is an ancient practice, and the primetechnological leap the industry has had in a long time is theinvention of electric pumps. From the perspective of an economist, itis essential to lay one large pipe to serve two localities other thantwo separate pipes for each locality. This scenario results in anatural monopoly in the water delivery industry. This explains whywater delivery is often largely owned or regulated by the government.This natural monopoly scenario has been the case even in SouthAustralia. However, the government of South Australia decided tooutsource some of its functions to corporations owned by the state inthe early 1990s (El, 2010). Most of the functions involved were thosethat had to do with IT infrastructure. Some companies were evencorporatized so that they could take up those responsibilities. SouthAfrican Water was one of the companies that were corporatized duringthat wave.
Structureof the organization
SAWater was restructured into a government-owned corporation, and hassince evolved to become a vertically integrated department of thegovernment (El, 2010). At the beginning, SA Water covered a widescope of water-related responsibilities. They were in charge of watercatchment areas, water supply and retail billing. In addition, theywere making pipes through their own castings factory. At that point,their goal was to assure the residents of the region they coveredsecurity of water supply (Thorogood et al, 2004). They had a largeworkforce of approximately six thousand people.
Duringthe late 1990s, the government of South Australia became a bit moreconcerned about environmental issues (El, 2010). This led them to addthe quality of water on their strategic goals. This goal was handeddown to SA Water. Apart from being required to pursue water qualityalongside water security, SA Water was required to show more businessacumen, and to have a better customer focus. In addition to that,they were required to run an expansive water export-based industry(Thorogood et al, 2004). These new requirements would be realizedthrough their water testing laboratory that would ensure they supplyquality water.
Thesenew requirements warranted a change in the organizational leadershipof SA Water. The South African government appointed Anne Howe tobecome the Chief Executive Officer at SA Waters. Several functionaladjustments followed. One such adjustment was the decision tooutsource the operations of Adelaide water supply and maintenance toUnited Waters. SA Water also sold their pipe casting factory unit. Intotality, these adjustments seemed to communicate a change in SAWater’s mission from “security of water supply” to “efficientsecure water supply”. As a result of this massive outsourcing, morethan half of SA Waters left and joined United Waters (Thorogood etal, 2004).
Thewater testing laboratory was restructured to be a separate businessunit. By the year 2003, Water Services became the largest functionalunit. It incorporated Infrastructure, Engineering and Projects,Operations and Retailing (Thorogood et al, 2004). The Water Servicesunit worked closely with United Waters to monitor ongoing projectsand implement new ones. The functional unit that would be in chargeof long term planning was called the Economic Development andProcurement unit. The EDP unit needed the approval of the SouthAustralian cabinet to manage the multimillion dollar investment forSA Waters.
TheWater Technology functional unit was responsible for SA Waterscapital planning. The Water Technology had an interface with theEconomic Development and Procurement unit. Through the interface, theWater Technology assisted the EDP in engineering issues wheretechnological input was needed. SA Waters also had an InformationServices unit, which directly reported to the head of WaterTechnology unit (Thorogood et al, 2004).
Problemsand issues in SA Waters operations
Tobegin with, SA Waters failed to invest in Geographical InformationSystems (GIS) when it was implemented in the 1980s. Such systems weretypically helpful for institutions dealing with utilities (Wen &Shih, 2006). Their performance in IT was poor, which resulted into SAWaters getting a reputation of uncompleted projects. This poorperformance and bad reputation did not encourage SA Waters to makeinvestments in IT (Peak & Guynes, 2003). In fact, some of thebusiness units operated without any collaboration with the ITfunction. Their IT infrastructure was so poor, it could not operatestandard systems in the industry. For instance, the system was so badthat it could not support an effective email service.
SAWaters’ response and technological solutions
TheChief Executive Officer made an external appointment for a ChiefInformation Officer in 1999. The new CIO brought in a fresh focus onIT (Peak & Guynes, 2003). He set out to raise awareness on theimportance of IT in every business unit. His intention was for allfunctional units to understand the benefits they could derive byaligning their business functions with technology (Wen & Shih,2006). His first major move was to close most of the old incompleteprojects. Next, he proposed for a total overhaul of the existing ITinfrastructure. The proposal was approved, and the development of anew system began in September 2000 (Thorogood et al, 2004).
TheWater Technology unit was renamed into Information Services (IS)Unit. A mission statement for the IS Unit was established anddocumented. It entailed the intention to deliver the accurateinformation, at the required time to the right destination regardlessof the location (Thorogood et al, 2004). To achieve this goal, the ISunit required collaborative effort from all functional units. TheCIO’s goal was for the IS unit to be a pillar to the strategicfuture of SA Waters. He opened the corporation to the reality that ithad power that it could exercise to its advantage at both strategicand project level.
Theimplementation of the IS unit repositioning led to the adoption ofthe broker model of selective outsourcing. This model helped the ISunit to develop Service Level Agreements to guide their relationshipswith internal groups as well as external strategic partners such asAspect Computing. The IS unit took the entire role of thecorporation’s risk management. They sourced most of the IT advicethey needed from external strategic partners (Peak & Guynes,2003). The skills the IS unit needed to operate competently warrantedhiring of people with technological experience in the industry. Inthe process, a number of the old Water Technology staff lost theirjobs because only the highly competent could be retained (Wen &Shih, 2006).
Therewere a number of IT applications running at SA Water. One of the mostcritical applications at SA Waters was SCADA. SCADA was a remotesystem that monitored and controlled the pumps and valves all overthe catchment area. Another mission-critical application was thelaboratory system. The Laboratory Information Management System wasdeveloped as a standalone system operating on its own hardware. Itwas an automation of sample tracking, allocating tests to samples,rest results validation, interpretation of results and generation ofreports. Aspect Computing was contracted to provide support for thelaboratory system in collaboration with the IS unit. The billingsystem and the GIS were also critical systems maintained by the ISunit (Thorogood et al, 2004).
Althoughthe numerous changes were steps in the right direction, the processwas not without hitches. For instance, GIS was scheduled to join thelist of mission-critical systems in SA Waters. The intention was tomake it the user interface of the other applications. However, thiswas not realized as quickly as hoped for. There were also problemswith interfacing the LIMS, which was difficult for the IS unit toaddress swiftly because it involved unusual data structures(Thorogood et al, 2004). Financial constraints also caused someprocesses to be delayed and some to be dropped.
Besidesthe mentioned challenges, the IT overhaul implemented by SA Waterswas largely successful. Clients revealed through interviews that theywere satisfied with the functioning of SA Waters after the ISreorganization. Using the broker model for outsourcing and PRINCE2methodology, SA Waters was able to manage projects better and deliverquality services to their clientele (Thorogood et al, 2004).Waterscope was one of the projects achieved through this recoveryperiod, and was a realization of the new goals of solving waterquality problems in a timely manner. Although the changes in SAWaters resulted in radical moves such as changing the chief executiveofficer, creating the position of CIO and huge spending in ITinfrastructure, it was all worth it at the end. The project overcameproblems that had for long dragged SA Waters behind and even openedthe corporation to new possibilities.
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Thorogood,A., Jetton, P., Vlasic, A., & Spiller, J. (2004). Raise yourglasses “The water`s magic! Strategic IT at SA Water: a case studyin alignment, outsourcing and governance. Journalof Information Technology 19,130-139.
Wen,H. & Shih, S. (2006). Strategic Information TechnologyPrioritization. TheJournal of Computer Information Systems46(4), 54-63.