Published on August 31st, 2015 | by Joshua New0
5 Q’s for Matt Rose, CEO and Co-Founder of Apana
The Center for Data Innovation spoke with Matt Rose, CEO and co-founder of Apana, a smart water management company based in Spokane, Washington. Rose discussed how the benefit of smarter water management go beyond conservation, as well as what he would like to see in a national water plan for the United States.
This interview has been edited.
Joshua New: Apana’s tagline is “manage water like inventory.” Why is this beneficial, and why do companies not already do this?
Matt Rose: In order to make managing water possible, it has to be easy to understand, supported by performance data, and feasible to implement as part of a normal routine, just like inventory management. It has to provide a way to address variances when they occur. Think “links in a chain”: we collect real-time water-use data, send it to our cloud-based analytics software, automatically detect water waste, and send actionable information to frontline staff to fix the problem. Then, we compile and analyze historical data to identify specific trends to provide businesses with the intelligence they need to make better decisions.
If companies don’t have the technology to collect and integrate this data, this process would be far too laborious, expensive, and inconsistent. It would be like trying to manage product inventory in a major department store without a point-of-purchase system.
New: Apana made the news recently after helping Costco reduce its water use by 22 percent. How do companies use less water with your technology?
Rose: If a valve fails within an HVAC (heating, ventilating, and air conditioning) cooling tower resulting in a significant amount of water waste, how would anyone know? Our system could detect the waste signature, identify probable causes, and provide actionable information to the frontline staff to resolve the problem efficiently. Operationally, we can detect anomalies on how much water is consumed to perform normal operations, which provides valuable insights for companies that want to be more efficient. Our algorithms can even differentiate between mechanical and operational water waste events, leading to added efficiency gains.
New: By governing and reducing water consumption with the Internet of Things, surely that also means companies reduce their water output—things like sewage or other wastewater. What does this mean for companies?
Rose: There a carrot and stick answer to this.
A “carrot” for our customers—when you save water, you save sewer, you save energy. Hot water is roughly twice as expensive as regular water. Cascading effects include reductions in drain line cleaning, filter replacement frequency, and other maintenance requirements. We’ve seen standard operating processes improve, such as better food preparation and cleaning protocols, reduced chemical use, and so on. Better business intelligence improves standard operating procedures, which leads to leaner operations. And with enterprise-level water-use intelligence, companies can negotiate better impact fees on future projects, value engineer for design criteria, and have the data necessary to keep their vendors accountable. For example, a company would be able to know if a cooling tower lives up to the performance standards promised by a vendor.
And there’s a “carrot” for sustainability, too. Environmentally conscious companies benefit from corporate goodwill as consumers show a growing preference to support businesses that care about our natural resources. Outside the built environment, it takes energy to treat water, pump water to the building, and pump wastewater to the wastewater treatment plant. Wastewater treatment is actually the largest consumer of energy in most cities. Better water management reduces these energy demands.
And the stick. We are seeing escalating exposure to compliance risk as a result of increased water volume and contamination. Property tax bills contain fees that in many cases are inadvertently masking the total cost of water and sewer tracked by operations. Unchecked volume increases or increased contamination levels, when caught, can be retroactively billed to businesses. To avoid these punishments, companies need to be able to know how they manage their water to ensure compliance with things like discharge permits.
Also, the cost of water and sewer are increasing at a greater rate than college tuition or healthcare. Until now, water and sewer have been a nebulous cost of operations included in the bottom line. Water waste and inefficiency has been indistinguishable from the cost of doing business. But not anymore.
New: What are the scale effects of this kind of technology? How would businesses or cities look if all water infrastructure was networked and “smart”?
Rose: From our perspective, there is a lot of ambiguity with the word “smart.” There’s been substantial progress on large-scale data aggregation from smart meters, but it’s how the data is analyzed and used at the micro level that will enable an entirely new industry segment.
Los Angeles County and Detroit have governments that are really starting to focus on what commercial buildings are consuming and why. They are setting up infrastructures to hold businesses accountable and imposing large fines on those not managing water effectively. We anticipate more water and sewer authorities moving in this direction.
Water management builds enterprise value. The question is, “can we as a society afford to ignore our water-constrained world and not take an active stance on managing the single most natural resource aside from oxygen?” Simply put, water is the new oil.
New: You have written that the United States needs a National Water Plan, much like President Obama’s Clean Power Plan. What would this entail, and how does data play a role?
Rose: Why is something as critical as water, a limited and life-sustaining element of our ecosystem and economy, not under federal mandate? Water resource management has been left to supply and distribution organizations controlled by fragmented state-level, elected water authorities with outdated infrastructures. Ultimately I see federal oversight with regional jurisdiction. Many like to argue that water is a local issue but to my knowledge there are no gates or valves in the aquifers underground. The Colorado River basin supplies California, Arizona, Colorado, New Mexico, Nevada, Utah, Wyoming, and part of Mexico. The cost differential across the country is one thing, but within the state of California it is absurd. Compare Merced to Sand City, 120 miles away. How does water that costs seven times more in one city than the other make sense? As deeper wells are dug to reach the ever-depleting water tables, the ground around them is sinking and the energy required to process the sediment-filled water is skyrocketing. The ripple effects are extensive and require measured intervention. Legislating controls reliant on performance data is a step in the right direction. “You can’t manage what you don’t measure,” is a familiar quote we find ourselves referencing often when explaining water efficiency. It’s usually followed by, “that which is not reported is ignored.” Water has been the neglected elephant in the room.
Today’s status quo for business—receiving vague water use data on your bill every two months —doesn’t help anyone address waste or inefficient use. Real data in real-time empowers people to do the right thing, shape routines, and drives accountable behavior, whether that is fixing major leaks, repairing faulty valves, or simply turning the faucet off while they’re mopping the floor. Sustainable smart water practices don’t just save water, they build enterprise value. If managing water seems like a challenge, just imagine not having it.