Home 
Topics Water Knowledge Center Articles
 | |
How Water Utilities Can Strengthen Themselves
|
An effective CBISP for a water utility requires not just improving technical operations but the complete improvement of the entire company. At its most fundamental level, it should enable the utility to
An effective CBISP should review, define, and implement the following functionally-linked activities:
Business Planning. This includes the writing of the Company Charter, and the Mission and Vision statements. The Business Plan assigns responsibility by functional areas and serves as the basis for measuring performance. At its core is the Budget, which provides the basis for evaluating and reporting spending performance through the Financial Information System (FIS). Sound budgeting information is a prerequisite for water tariff development.
Human Resources Development (HRD). An intrinsic part of the CBISP, this includes the comprehensive review of the organization's management to gauge where changes can and will improve business performance. It also means assessing HRD practices in terms of needs and opportunities for improvements, and developing HRD plans and work schedules to achieve the identified improvements. Finally, this aspect of the CBISP calls for developing and conducting workshops and other training initiatives based on the identified priority needs of the management and staff.
Information Technology (IT). An overall IT strategic plan should assess and implement hardware, software, and staffing requirements to meet targeted Management, Geographic, and Financial Information Systems developments. The IT function should advise on the selection and procurement of specific computer hardware and software.
Management Information Systems (MIS). The MIS should tie together all the management activities into a computer-based information system. It should enhance management decision-making processes by grounding them on reliable financial and technical information, and improve the operating efficiency and performance of the water company.
The Financial part of the MIS (or FIS) involves:
The HRD part of the MIS includes the design of an improved human resources database that includes staff employment and earning history, staff skills inventory, training achievement and aspirations, and job descriptions for each position.
The Operation part of the MIS
Financial Management Development (FMD). FMD should assist in developing a fully-computerized FIS and a modern budgeting system that capture responsibility and performance by function and activity. It should
Financial Modeling and Tariff Development. A financial model that works interactively with the Budget to find an acceptable spending and tariff combination should be developed. After all, a water company should live within its means. The financial model defines the tariff requirements each year to meet the revenue requirements It should be seen as a planning tool to achieve full financial self-sufficiency and is dependent on
Geographic Information Systems (GIS). A mapping and geographic system to support improved network operations and broad-based MIS should be developed. The GIS should be compatible with other GIS available in the city/province and needs to be integrated into the water company's daily operations.
The conventional approach to developing CBISP is to have a consultant assess the water company's status, and then have him meet with the water utility and its financier to design a program for the next 6-12 months. The consultant usually applies Problem Tree or SWOT (Strength, Weakness, Opportunity, Threat) Analysis for the review phase.
While this may work in several instances, the downside of such an approach is that the usually expensive international consultants work in isolation from the client. As such, they produce a "best practices" report that does not have much client ownership. In many cases, the programs ensuing from such an approach are doomed from the start.
To enhance this conventional approach, utilities can start working on a business plan guided by the standards set by the International Organization for Standardization (ISO). A business plan makes sense since a water utility is primarily a business entity and should be assessed as such. General standards, such as ISO9001/9002 (Quality) and ISO14000/18000 (Environmental Management and Safety), would help ensure a baseline through benchmarking. They can also guide the water company in formulating an action plan to achieve such standards.
A new set of standards specific to the water industry can provide the right guidance for a water company wishing to strengthen its capacity. These standards are oriented towards performance values and are in line with social responsibility and corporate behavior. They include
Institutional strengthening is all about accepting changes, and these changes do not happen overnight. Strengthening an institution requires a strong leadership that can drive a top–down transformation process. Too, in order to be able to put all problems and issues on the table and behave in a transparent manner, good governance is a must. Should any of these key success factors be absent or weak, capacity building efforts will have a more than usual uphill battle.
| © 2008 Asian Development Bank Privacy | Terms of Use |
 Top of page |
