In August 2019, Melbourne Water was acknowledged in the influential Most Innovative Companies list, published by the Australian Financial Review and Boss Magazine. With more than 800 organisations nominated across Australia and New Zealand, making the list is no small achievement. Utility Editor, Charlotte Pordage, spoke with Michael Wandmaker, Managing Director of Melbourne Water, to find out more about how innovation is permeating every aspect of the business.

The AFR BOSS Most Innovative Companies list is in its eighth year and is the only national list of its kind. The highly competitive ranking is based on a rigorous assessment process managed by Australia’s leading innovation consultancy, Inventium, and a panel of industry expert judges.

The 2019 list was split into ten industry-specific categories, and Melbourne Water ranked third in the Government, Education and Not-for-profit category for its Virtual Reality Multi-User Training Platform.

Michael Wandmaker, Managing Director of Melbourne Water

Melbourne Water’s Managing Director, Michael Wandmaker, said the utility is proud of its innovation initiatives and grateful for the recognition.

“Being a part of this list is a validation of the high standard of our innovation initiatives – particularly in the areas of Virtual Reality (VR), Artificial Intelligence (AI) and the Internet of Things (IoT),” Mr Wandmaker said.

“Innovation is happening in all parts of the business, but this award recognised the work between our safety, IT and asset management teams as well as our research partners at Deakin University’s Virtual Reality Lab in Geelong.

“The Deakin collaboration has helped us accelerate adoption of VR technology in a number of business applications, including safety training, building design and engagement. VR has become a core business tool with real benefits in enhancing safety and efficiency in our operations and projects. As a fast adopter in our sector, Melbourne Water is also creating opportunities for others to access our training content.

“We want to grow innovation across the organisation. Our formal senior leadership team training program emphasises creating innovative environments. That includes the courage to try things and not be afraid to fail. We’re using agile methodology in IT, of course, but also across less technical areas such as engagement, strategy development and education.”

Implementing new technologies to improve business efficiency

According to Mr Wandmaker, Melbourne Water’s advances in field mobility, spatial systems, public access portals and online platforms have all been notable improvements for the utility and the community it serves. More importantly, smart and empowered people have enabled Melbourne Water to continue to approach and implement technology in an innovative way.

“Technology has been a core enabler in our business – the biggest game changer at Melbourne Water has been to build a strong digital culture supported by digital platforms and capabilities that allow our business to continually evolve, experiment and innovate.”

Melbourne Water currently has a number of innovation initiatives underway, and the utility has a strong focus on automating the operational aspects of its business such as treatment and delivery.

“One example is that we’re using AI and machine learning to efficiently move water from the Sugarloaf Reservoir, north of Melbourne, through the Winneke Water Treatment Plant and into the city’s water supply. Moving that much water involves many variables – the height of the reservoir, flow rates and other factors,” Mr Wandmaker said.

“Previously, we thought the most efficient way to move that water was by operating one of the six main pumps. We were able to analyse historical data which proved that a much better operational process was to use extra pumps at specific times. Its success is irrefutable: electricity consumption has fallen by a quarter, saving $150,000 to $200,000 every year at Winneke alone.

“We’re now investigating the use of AI to better protect our communities from flash flooding. Currently, flood prediction is based on rising river waters, which occur a few days after heavy rain, but the majority of Melbourne’s flood damage is caused by flash flooding, immediately after a storm. The AI solution we’re developing with Piccard will learn from past rainfall and flood data, and be able to recognise weather patterns that lead to flash flooding. The system will then automatically send SMS messages to people likely to be affected, as well as provide an early warning to local government to enable them to close roads in advance.”

Melbourne Water has also had success with using IoT technology to control pipe corrosion.

Cathodic protection involves connecting a sacrificial piece of metal (anode) to the pipe – in this case, the anode corrodes instead of the pipe. With this system, the anode requires routine inspection to determine when it needs replacing, which can be time consuming and a drain on resources.

“We’ve collaborated with a lot of smart people – Green Technology Services (GTS) Group, Sigfox network operator Thinxtra and IBM – to develop an IoT system to monitor these cathodic protection installations, removing the need for manual inspections,” Mr Wandmaker said.

“So far the prototype devices have performed without fault, and we’re planning to roll out the IoT system across our network of pipes. We estimate that network-wide implementation will pay for itself within three years, and the improved monitoring will also increase the service life of billions of dollars worth of assets by increasing the uptime of cathodic protection systems. Moreover, there is an important safety benefit in reducing the need for Melbourne Water employees to travel to sites for inspections.”

Melbourne Water is also developing a prototype which utilises machine learning to detect vegetation coverage in its retarding basins.

The algorithm detects the number of plants and even species present in these locations – a considerable efficiency on current manual inspection tasks.

Sensor technology and high-resolution imagery will be deployed to identify and predict sewer maintenance requirements, with machine learning software able to pinpoint areas of interest and map any changes over time.

Enhancing the customer experience on and offline

Melbourne Water’s customers range from the general public to water retailers, land developers and local government authorities.

Mr Wandmaker said the utility is very conscious of the responsibility that being a regulated monopoly brings.

“We continue to put considerable effort into living two of the four key themes that permeate our corporate and business plans. They are customer/community at the centre of all of our decisions and continuous improvement to demonstrate that we are committed to continuously building a better business,” Mr Wandmaker said.

“The other two are living within our means (demonstrating that we spend public money wisely) and investing in our people (delivering a true safety culture and a fully integrated learning organisation).

“We are living in Australia’s fastest growing city; population is booming and the middle suburbs are densifying. It rains, but we know it does not rain enough and the filling season is getting shorter. Melbourne’s water storages are among the lowest they have been since 2011 – just after the Millennium Drought – and have declined 20 per cent in the last six years.

“We have challenges ahead of us with all of our services – from managing litter in our waterways to ensuring our sewage systems can handle increased capacity. It’s never been more important for us to work with our customers to make sure we can grow our city sustainably.

“We do not just want to be customer centric, we need to be. For example, our recent Healthy Waterways Strategy, which covers more than 20,000km of rivers and streams, was co-designed with more than 220 organisations across the greater Melbourne region because we recognise that we can’t work alone to mitigate our population and climate challenges. Collectively, we can achieve so much more.

“We also need to equip our communities with the knowledge to help us make important decisions about how we manage water supplies in the future. If we had to invest in a major augmentation, we’d want our communities to understand all the options available to them: we can desalinate sea water, recycle wastewater and capture stormwater. We can dial any of these options up or down and these are decisions communities will ideally care about and participate in.

“A lot of organisations talk about community or customer engagement, but we really live it. It requires courage to expose a strategy at that level, but we’ve only seen benefits. Over the last few years, Melbourne Water has been through a massive digital boost aimed at improving the customer experience, enabling greater engagement, self-service and provision of information across multiple devices. Now we have made the switch to considering not just our current customers, but also our future customers and communities. It’s the only way.”

Mr Wandmaker explained that Melbourne Water continues to make strategic investments to enhance the digital customer experience – the most recent of which is its customer portal, providing a contextual experience to provide information and data specific to different customer groups.

“We understand that our customers want to connect with us in a variety of ways and recently launched our ‘citizens as sensors’ prototype within our call centre. After speaking with a customer, we have the ability to push out a simple web app to collect photographs and location information to fast track maintenance and service requests. We’re finding our customers engage well with this process and our customer response officers are becoming much more efficient as a result.

“The significantly improved and increasingly important use of all social media platforms provides us with the opportunity to conduct two-way conversations, get important messages out quickly and listen and respond to concerns and issues being raised within the community.

“We have also begun experimenting with the use of AI tools to obtain greater insight into our customers and their interactions with Melbourne Water. These natural language processing tools give us detailed information around customer sentiment and engagement patterns, which in turn helps us better understand and meet their needs.”

Investing in people and partnerships

Melbourne Water has not only invested in the recruitment and ongoing education of its people to match future skill and capability needs, but it has also developed strong partnerships with academic institutions, such as Swinburne, RMIT and Deakin University – with which Melbourne Water shares research and has developed ground-breaking prototypes such as the Virtual Reality Multi-User Training Platform.

“We actively participate in industry-based learning programs where university students are placed in technology-based roles within the business to ensure that our platforms and processes are leading edge,” Mr Wandmaker said.

“We have also created a culture within the business that facilitates our own employee’s development to ensure that they are challenged and have opportunities to explore and innovate. The roles in these fields are valuable to business operations and the prevalence of IoT and smart devices, in addition to the growing volumes of data available, requires us to be much smarter in our ability to manage information and extract insights from our data.

“Skills in data science and machine learning are increasingly important in our industry. However, it is critical that we pair these skills with strong business and operational expertise.”

A key objective of the utility’s Digital Innovation Hub is collaboration among its subject matter experts, operational teams, data scientists and technology experts.

Mr Wandmaker explained that Melbourne Water runs frequent ‘innovation days’ to showcase technology opportunities broadly across the business to demystify some of these technologies and connect digital expertise to the frontlines of business.

“In a digital transformation journey, having the right technology architecture and core platforms is crucial to sustained progress and momentum. We have created an environment of continuous improvement to ensure that we are always building a better business to provide high-quality service to the community we serve. Pace and agility are essential, and poor technology choices or legacy IT systems can quickly become liabilities that inhibit digital transformation,” he said.

“Our shift toward consuming cloud services and platforms gives us immediate access to the latest technologies in the marketplace to evaluate, develop and scale new solutions. We have established a Digital Innovation Hub to determine feasibility and prove the value of digital solutions before implementation.

“The Digital Innovation Hub uses rapid prototyping techniques to develop a low-fidelity product that can be evaluated with minimal investment. Working collaboratively with experts from across the business, a technology solution can be quickly launched and evaluated across a small group.

“A successful evaluation then produces a business case to develop and implement a production-ready solution at scale. This methodology provides a risk-managed approach to our investment and supports a culture of experimentation and innovation.

“We acknowledge that not all of our prototypes succeed, however we acquire learnings quickly and inexpensively that can be applied more broadly to other initiatives. It is essential that we provide our people with the tools, environment and flexibility to explore, innovate and experiment in a risk-managed way.

“The ability to gain deeper insights into our customers, assets and operations certainly helps inform business efficiencies. The ability to predict and model different scenarios provides great efficiency in asset maintenance, network management and long-term planning for the Melbourne region.”

Michael Wandmaker was appointed Managing Director of Melbourne Water on 22 September 2014. After a long military career, Mr Wandmaker developed extensive senior leadership experience across several industries, both in Australia and internationally. This includes electrical and mechanical engineering, energy, oil, gas, mining and water, having worked at Sydney Water in the mid-2000s.

Mr Wandmaker was previously global President of FT Services out of North America, Vice President at Siemens Canada, General Manager in charge of five Tyco Services companies, CEO of Silcar Maintenance Services and various executive positions at Transfield Holdings. Before coming to Melbourne Water, Mr Wandmaker was Group President and acting CEO of UGL Limited’s ASX-listed engineering, construction and maintenance company.

Mr Wandmaker has a Bachelor of Engineering (Mechanical and Computing).

Siobhan Day is the Assistant Editor of Utility magazine and Pump Industry magazine, and has been part of the team since early 2019. With a background in management in the non-profit sector, Siobhan has extensive experience in communications, professional writing and client management. She holds a Bachelor of Business and Communications and is currently completing a postgraduate degree.

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