Benchmarking for Improved
Water Utility Performance
Utility Simulation Game 2.0
Learning Objectives
• Directly experience consequences of implementing a
given strategy in a ‘protected’ environment.
• Experiment with consequences of decisions through
a a trial and error process.
• Exercise practical skills such as negotiation and
consensus building, which are key for managers
working in any kind of organization.
• Analyze and draw conclusions on trade-offs,
constraints and opportunities in utility management.
Game Concept
• Utility managers often face conflicting objectives
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–
–
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Short term versus long term objectives
Financial viability versus affordability/equity
Service expansion versus service improvement
Etc.
• In this game the trade-offs in utility management become explicit
and players need to make decisions on what trade-offs they
choose.
– Players have different roles (and as such different interests and are
likely to make different decisions regarding the trade-offs)
Utility Simulation Game: roles
4 Roles
– General manager
– Financial manager
– Customer manager
– Operations manager
Financial Manager
• Full cost recovery ratio and
• Operating ratio
• Asset value
Utility Simulation Game: Playing the game
Step 1: Developing a Strategy
• Joint analysis of the management team
• Development of a strategy (Where do
they want to target investments? Which
KPIs
should
be
targeted
for
improvement?)
Step 2: Making Preliminary Decisions
Possible decisions and initial values
Unitary cost of each decision
Utility Simulation Game: US$ 2 Million
Step 3: Negotiating the Decisions and Investments of a
Year
• The general managers will have to enter into negotiations
with the individual managers. The general manager may do
this in bilateral negotiations or through a group negotiation.
Step 4: Submitting the Decisions and Calculating the
Impact
• The general manager submits the final decisions for the
year. ‘
• ‘New’ situation with respect to the KPIs (printing of an
overview of the KPIs.
• New Round.
Utility Simulation Game: Comparative
Performance
• Three teams will play the same scenario,
competing against each other.
Utility Simulation Game: Political Interference
• In many countries political interference in utility
management may complicate management
decisions….this game is no different.
• The facilitator represents the political realm and as
such may at some point prioritize certain objectives
(i.e. indicators) or may freeze certain decisions
through the dissemination of press-statements (the
Xia-Xia Times).
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–
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Tariff levels
Affordability
Service coverage
Etc.
Resources
• Manual
• Case study description
General Manager
• Profitability
• Loan utilization: initial value 3,000,000
US$
• Staff satisfaction
• Overall performance of the Utility:
Benchmarking
Operational Manager
• Physical water losses (physical nonrevenue water)
• Continuity of water supply
• Quality of water
• Service coverage.
Commercial Manager
•
•
•
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Customer satisfaction
Commercial non-revenue water,
Affordability of tariffs
Collection efficiency