The Value of CEM – Looking Beyond the Numbers
The senior management at any water utility looking seriously into a Central Event Management (CEM) solution will inevitably want to see the financial justification. And rightly so. As with any significant technology investment, it’s important to understand what kind of return can be expected, and the likely timeline for seeing the value.
Through our work with water utilities across many years, we’ve developed a detailed methodology for calculating the economic value of investing in the TaKaDu CEM solution. As with any model, our approach is based on some fundamental assumptions. In doing so, we have been very conservative, preferring to err on the side of underestimating value, rather than the opposite.
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The value calculation model is based on assumptions and calculations across four key categories:
- Water loss reduction – Calculating how much water is lost due to leaks that remain undiscovered for a long time (hidden leaks) and comparing it with calculated water loss due to leaks that are identified and fixed earlier on in their evolution.
- Operational cost reduction – Calculating the costs of fixing long-standing leaks vs. newer leaks. The calculation also considers the costs of repairing collateral damage.
- Improved human resource utilization – Calculating the costs of control room, NRW department and field team employees’ time dedicated to event detection, management and repair with and without TaKaDu.
- Fast handling of telemetry and meter faults – Calculating the value of the water saved by the earlier discovery and repair of telemetry faults and meter malfunctions enabled by TaKaDu.
Strong ROI plus other benefits
By considering those four categories together, we have found that most water utilities project a return on investment (ROI) that is about 5-10 the annual investment.
Beyond those measurable value categories, there are many other tangible and intangible benefits that water utilities gain from TaKaDu CEM. For example: less overtime and subcontracting costs due to faster resolution of leaks and better communication between departments; reduced dependence on veteran experts, due to having an automated, easy-to-learn system; higher service uptime, meeting water pressure and quality regulations; and many more.
Detailed business case calculation
To learn more, we invite you to read our in-depth article, Beyond Numbers: Calculating the Economic Value of the TaKaDu Central Event Management Solution, detailing the assumptions behind our calculation. The article includes some examples that make it easy for any utility to calculate the likely return of investing in TaKaDu based on the specifics of their network and operation.