Creating growth together

Globalization, digitalization, the acceleration of innovation: our economic environment is experiencing profound changes. In this context, co-construction has become a must for companies.
Published in the dossier of July 2016

For Veolia, co-construction is a priority growth driver. In this regard, the group is creating unprecedented contractual or economic models with its clients and partners. It is seeking out complementary expertise that – combined with its own know-how – will open up new opportunities for the taking.

The time is long gone when manufacturers maintained only the traditional client-supplier relationship. Nowadays, new types of partnerships − and even co-creation − are developing. An alliance that benefits both partners, who can consequently create new offerings and conquer new markets.

In 2014, Veolia thus joined forces with IBM to develop a smart water solution (smart management of water services for cities) that integrates different data, both external (weather, traffic, etc.) and internal (maintenance or customer data, sensors, etc.), cross-references, visualizes and analyzes it, and extracts information from it in order to deliver the most effective response. 

The ultimate goal, of course, being to improve service quality and operational performance. Veolia included this innovative technological solution in the service concession tenders it won in Greater Lyon and Lille in France, and Tidworth in England, and plans to develop it extensively with other clients worldwide. Initially rolled out in the water sector,

« Our solution is set to be extended to district heating and different smart city issues » highlights Pierre Brunet, Veolia’s IBM partnership manager.  

A matter of trust

Partnerships between large companies are based just as much on technical as business, legal or organizational aspects. This is why building a relationship of trust is crucial. There must be a strong commitment, whether this involves training joint teams or drawing up legal frameworks, for example, that hold each party liable. Hence the collaboration between Veolia and the company EPM in Colombia consists in providing a joint team of employees capable of presenting a business plan and offering new services to clients. 

In the partnership between Veolia and IBM, both companies have each brought on board five people tasked with designing and improving the joint smart water solution.

« We want to move from a responsive to a predictive mode, particularly through simulations », states Pierre Brunet. « So by combining our sectoral expertise with IBM’s data expertise, we are going to create algorithms that will allow us to be proactive and optimize our operations. » 

Neither partner would have been able to develop these solutions on their own.

In Japan, Veolia and Takeei have set up reciprocal shareholding in both companies: Veolia is a majority shareholder in the company in charge of operations, while Takeei is a majority shareholder in the asset-holding company. “Takeei takes the financial risk and outsources operations to the company controlled by Veolia, which takes the operational risk,” explains Christophe Maquet, Veolia’s Energy Business Line Director in Japan. “Each party’s roles are defined according to the added value that each brings.” Both partners are willing to make a long-term investment, share the risks, and work completely transparently: 

« We have a virtually open-book approach to our work », states Christophe Maquet. « For example, we know their rate of return on investment, and Takeei knows our cost markon. »

Commercial strength

Partnerships do not only concern engineering or investment, they are also commercial. 

« We are combining IBM’s marketing and commercial strength with our presence on the ground and understanding of clients’ expectations », highlights Pierre Brunet. « We are merging our two commercial networks and canvassing clients together. We make a greater impact with our joint message. »  

In Latin America, the division of tasks is perfectly defined between Veolia and EPM: the former provides the expertise, while the latter is responsible for the commercial aspects. The collaboration thus began with EPM’s clients. However, this was a particularly sensitive business approach, notes Ramon Rebuelta, Veolia’s Executive Vice President Latin America:

« Energy efficiency is a new concept in Latin America. We suggest that our clients replace equipment in working order with more high-performance equipment, leading to savings in the long term. But this is not common practice ! »

A local partner is therefore all the more welcome.

Customer satisfaction

These partnerships are highly thought of by clients. The Greater Lyon area complimented Veolia and IBM for providing them with this joint smart water solution that offers transparency regarding water management services. This achievement made an impression during the international smart cities conference in Barcelona in November 2015. And some one hundred visits over the past eighteen months have allowed potential clients to gain a more precise understanding of what it involves.

How are these long-term partnership projects monitored? In each case, a report is scheduled after two or three years to check their performance. The ambition is that these alliances will serve as the forerunner for lasting partnerships. In any event, this is the view taken by Veolia. 

« These new ways of working are almost undoubtedly going to develop. They are low-investment arrangements in which we keep a tight rein over operations », underlines Christophe Maquet. « This allows us to save our funding capacities for other operations, and therefore ultimately carry out more projects. »