As global water issues become more severe and water utilities adjust to changing demands from their stakeholders, technology vendors need to understand the common issues that water utilities face and alter the way they communicate with them to maximize their value to the industry.

This is the key theme observed by IHS analysts who attended the jointly sponsored American Water Works Association/Water Environment Federation (AWWA/WEF)’s 27th annual Utility Management Conference.

Technology companies that can solve the following core issues will tend to be more successful than their competitors who cannot, IHS says.

Overcoming regulatory hurdles: North American water utilities are mostly local natural monopolies, and are regulated as such. This can create less-than-ideal behaviors; for example, since water is necessary to sustain life, it is rare to be sold at its true value, which lowers the incentive to conserve and reduce waste. Vendors that can help utilities show the societal value of their solution to regulators and other stakeholders will reap benefits.

Solving organizational challenges: In many situations, various divisions are compartmentalized, with little collaboration and communication. Technology vendors need to understand best practices for optimizing organizations and investing more into the consultative part of their offering.

Integrating systems: Often, multiple systems will be operating at the same utility with no central control or integration. This can cause a variety of problems to utilities such as data loss, duplication of efforts, transcription errors, and more. Companies that can identify such issues and develop solutions are invaluable to water utilities.

Updating business practices: Water utilities have different variables to consider than other types of businesses. A prime example is water conservation; the water industry is often pressured into encouraging water conservation, which results in less revenue over time. Companies that can help to find alternate revenue streams—or to unbundle profits from the sale of more water—can find strong success in the market.

Water utility managers are not conservative, outdated dinosaurs, which is how they’re often characterized, says Jacob Pereira, senior analyst of Smart Utility Infrastructure at IHS. They tend to be smart individuals who have identified how their business works (rather than how it should ideally work) and have become good at those specific processes.

“Modern IT solutions are now causing structural reform at water and wastewater utilities,” says Pereira. These technologies will not be understood properly until utility management innovates with a focus on maximizing technology. “If outside parties with different incentives can enter the picture and help them improve their processes without doing harm to their overall business,they can achieve very strong results,” he says.