Solving Water through Business Model Innovation
“When we think about solving customer challenges, we need to think about what our solutions can do, and how utilities can implement them in an affordable way.”
Mark Hardee, Chief Financial Officer (CFO), Measurement and Control Solutions, is driving to get clean water to customers further and faster.
When you work in finance, the principles are similar no matter the business. So why have I spent 17 years in the same industry?
I started out as a typical young finance professional looking for somewhere I could get experience and climb up the ladder. I found Sensus, a leader in smart technologies and services for water, gas, electric and lighting, which Xylem purchased in 2016. I quickly learned the importance of the work we do ensuring safe, reliable delivery of these essential resources to communities across the globe. Water is essential to sustaining life and to progress. That’s why I remain passionate about water, and why I am here today.
Every day, our customers are navigating challenges like aging infrastructure and resource constraints while they help make their communities more water and resource-secure. We are working with them to accelerate their strategies on water conservation, better distribution and optimized ways of working. We’re helping our customers to move further, faster.
A key part of this is business model innovation – developing and also providing transformative technologies to our customers who need it, in a sustainable and cost-effective way. When we think about solving customer challenges, we need to think about what our solutions can do, and also how utilities can implement them in an affordable way.
Our customers are looking for reliable, efficient and accurate solutions but they often face budget constraints to finance projects. To fund and implement new infrastructure, utilities are typically required to set out the need for a particular solution, including its costs, benefits and impact on their end customers.
In order to mitigate affordability issues, we use an innovative business model approach where we leverage Xylem’s strong balance sheet to create a network-as-a-service and software-as-a-service offering. By taking on the software and infrastructure management, we can take the burden off utilities to staff, manage, upgrade and pay for IT infrastructure. Think of it as an easy button, where utilities can buy access to the network.
We have also adapted our contract scoping approach with customers due to an increased interest in broader digital solutions beyond just advanced metering infrastructure deals. Utilities want to build on their investment, with the ability to add-on software, services or solutions in the future.
This type of business model innovation requires taking a step back and looking at interconnected systems – things like how Xylem delivers technology to our customers and how they pay for this technology. It also requires constantly looking at how we solve water through our customer’s perspective. To think about their experience, not your own.
I’m proud we’ve been able to apply this mindset to our teams and create business models that allow our customers to get the technology they need now, and let us handle the infrastructure management through a simple recurring operating expenditure. I look forward to helping advance more bold innovation for our customers and communities everywhere.