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Water company eyes clouds for ERP as well as rain, gears up for overhaul

Cloud-based ERP and HR systems upgrade worth over £4 million is the plan for utility company.  

How the cloud will bring tech upgrades, not just rain, for water company
Photo by Osman Rana / Unsplash

South East Water (SEW) is looking to spend over £4 million on new cloud-based enterprise resource planning and HR payroll systems.

The company delivers 542 million litres of water per day to 2.3 million customers in the southeast of England through 9,000 miles of pipe.

It is asking potential suppliers to participate in its upcoming procurement via a note published on the UK government’s Find a Tender service.

“The tender will include implementation that will not only serve SEW's requirements for the new system but also provide services to assist with migration, transformation and integration with the existing SEW ecosystem,” the water company said, estimating that the total value of the deal – excluding VAT – would be £4.1 million.

The tender is broken into two lots – for the cloud ERP and the cloud HR system – but both will run for the same amount of time, which is 96 months or eight years. Companies have until 27 November 2023 to apply for an invitation to tender.

It does not specify the existing software but earlier publications suggest it may be primarily relying on Microsoft Dynamics for its ERP needs.

The water company’s 2025-2030 business plan notes that it is planning to increase its computing costs in the next few years as it plans to move several of its “key systems” to the cloud. It said its computing costs are anticipated to increase in 2025-2030 from £4.3 million to £5.4 million per annum.

It also notes: “The operating costs of cloud-based solutions (Software as a Service or SaaS) are higher than traditional on premises solutions, with significantly higher licensing costs and cloud platform running costs, partly offset over the longer term with lower capital expenditure (for example in servers).

"The additional costs, net of savings, of SaaS licences together with cloud platform running costs are assumed to be absorbed within existing computing budgets and no increase in opex is proposed for this.”

South East Water’s business plan also mentions a smart network trial of data transmission from digital water meters at 2,000 homes in a Kent trial area, alongside additional network sensor information.

This project is now being further developed as part of a smart network strategy to allow the water company to spot leaks on its network in near real time, due by 2030. It also plans to use ‘digital twins’ in order to better model changes in the network.

Water companies have however also come in for criticism recently, and in June the chief of the water regulator wrote to South East Water asking for an urgent meeting after burst pipes affected 286,000 customers in December last year and another 6,000 had problems with their water supply in June. “This suggests that the resilience of supplies is well below what would be expected from an essential service provider and that transformative change is required at South East Water to ensure customers receive the levels of service they deserve,” Ofwat said at the time. South East Water had blamed more people working from home for a hosepipe ban it had introduced.

See also: Botched ERP migration costs CEO his job, company €25m