Why Digital Solutions Still Struggle To Gain Traction At Utilities

Here’s what utilities need to see from vendors.

By Seth Werlinsky

The water industry has no shortage of impressive digital technology, from predictive maintenance solutions to real-time network optimization platforms, and it's only growing. At conferences and in webinars, vendors showcase a wide range of digital innovations that support utilities across every part of the water cycle. Everyone from legacy water solution providers (companies that traditionally provide hardware, operations, engineering, or other consulting) to pure-play software-as-a-service (SaaS) startups is entering the market.

It’s clear why: utilities need to find more and more operational improvements. We all know the “big rocks” utilities face: tightening budgets, increasing regulations, and more severe weather, all against the backdrop of growing populations, aging infrastructure, and the looming loss of institutional knowledge from the approaching “gray wave.”

Yet, despite the need and the availability of the technology, many of the solutions still struggle to gain traction. There are several reasons the municipal water industry has been slower than other sectors to adopt digital transformation. Budgets are tight. Each utility faces unique challenges. And utility operators and managers feel a sense of ownership over the systems they have often spent decades dialing in.

But utilities still need greater efficiency, lower costs, and more visibility. So, one would think the uptake for software would be smoother and faster. But it’s not. Why?

Perhaps solving the operational challenges are only half of the issue. In my experience helping several technology vendors go to market, I’ve found that water innovators are often so focused on explaining how their tools address a particular use case that they don’t spend enough time addressing the other utility challenges that the technology alone can’t address.

These “commercial” challenges include concerns such as long implementation timelines that can strain already-thin staff, limited post-sale support, unexpected costs, and uncertainty over whether their team can actually manage the system being sold to them. These are all things that either they have experienced in the past, or their colleagues have.

And I suspect small and mid-sized utilities, which represent the vast majority of America's 50,000+ drinking water and wastewater systems, are even more cautious, given their more limited resources.

These issues are just as important as the operational ones, and a vendor should elevate in their messaging hierarchy through their go-to-market motion; and if they can’t address them, they should build those capabilities into their organization as much as possible. Otherwise, they risk losing out to the toughest competitor of all: doing nothing.

In other words, it doesn’t matter if you offer the “best” solution. If the customer can’t see a clear, manageable path to adopting it, they won’t.

A Problem For The Industry

This isn’t just a sales issue. It’s an industry-level problem. Digital growth in Healthcare and Financial Services has averaged around 20% over the past five years, while municipal smart water has grown in the low teens over the same period.

Software evolves through iteration in a way that hardware and services don't. Think about the constant notices to update the app on your phone. Those enhancements are determined by vendors analyzing real usage data and improving features to solve new use cases. But if utilities don’t adopt, software doesn’t evolve, which slows down developments that can make water systems more resilient.

I believe that’s why there’s no “800-pound gorilla” in smart water software. Suppliers, large and small, are all circling the same set of operational problems, but too few are addressing the friction that keeps utilities from adopting their solutions.

What Can Vendors Do Better?

Here are the biggest commercial concerns I hear utilities express:

Price and timeline transparency. Too often, contracts are signed that vendors can’t deliver on. It isn’t unheard of that a system has yet to go live even after 12 months. These delays, as well as unforeseen costs that often accompany them, frustrate everyone. Pricing clarity is a “must have” when it comes to software. As much as they can, vendors should offer clear, structured pricing and realistic implementation timelines.

Proof of commercialization. There’s still a lot of “vaporware” in the industry. That makes utilities even more skeptical about what they’re being sold. Vendors must communicate that their solution is live, scaled, and fully commercialized.

Right-sized solutions for actual operating environments. Vendors often promote their most complex deployments. That can scare off smaller utilities, making them think the solution is more than they need. Make it clear the solution scales and is effective for utilities of all sizes.

Training, support, and knowledge transfer that builds internal capability. Most U.S. utilities don’t have dedicated IT teams, if they have any IT staff at all. They need to be able to operate and maintain the system without long-term vendor dependency, but also with confidence that they’ll receive the onboarding and ongoing support they need. The vendor must be seen as a partner, not just at install, but over time.

The Path Forward

As the water sector faces growing challenges, digital solutions will become more essential. The more vendors build and communicate around support systems, pricing clarity, and implementation rigor — while continuing to solve operational problems — the faster they and the industry will move forward.

Questions Utilities Can Ask Vendors

Below is a set of questions utilities can use to ask vendors how they plan to support their commercial needs as much as their operational ones.

When evaluating smart water technology solutions, utilities should have clear answers to these questions:

1. What is the total cost of ownership over five years, including all software licenses, support contracts, training, integration, data storage, and anticipated upgrades?
2. What happens if your company is acquired, merges with another vendor, or goes out of business? How are our investment and ongoing operations protected?
3. Who will be our primary point of contact after implementation, and what are your guaranteed response times when we need support for critical issues?
4. Can you provide references from utilities of similar size and complexity who have operated your system for at least two years? May we contact them directly?
5. What level of IT expertise and staff time is required to operate and maintain this system? Can our existing team realistically manage it, or will we need to hire specialized personnel?
6. What happens to our data if we decide to switch to a different vendor or bring operations in-house? Can we export data in standard formats, and who owns the data generated by the system?
7. What are the realistic implementation timelines and key milestones, and what are the most common obstacles that extend those timelines?
8. How does your solution integrate with our existing SCADA, billing, GIS, and asset management systems? What integration work is included in your pricing, and what requires additional cost?
9. What training do you provide for different user levels — operators, supervisors, and administrators — and how do you support knowledge transfer when key staff members retire or move to other positions?
10. Can we conduct a limited pilot or proof-of-concept in our actual operating environment before committing to full deployment, and what would that process look like?

Seth Werlinsky is a go-to-market consultant who works with digital innovators to accelerate technology adoption in municipal water and industrial markets. Email: seth.werlinsky@blueharborgtm.com