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In this post I summarize and expand on a recent discussion published by The Groundwater Guy about using key performance indicators (KPIs) to transition small water utilities toward data-driven management. Drawing on practical experience in utility operations, I (Dr. Michael Reynolds) and my colleague Sarah Martinez walk through what KPIs are, why they matter for small systems, which metrics to track across core functions, and how to implement a simple, sustainable measurement program even with limited resources.

Introduction: Why KPIs for small water utilities?

Small water utilities face a unique set of challenges: aging infrastructure, tight budgets, regulatory obligations, and high expectations from customers and local stakeholders. KPIs turn vague goals—reliable service, regulatory compliance, financial sustainability—into measurable outcomes you can manage. The objective is not to collect data for its own sake, but to use that data to move from reactive firefighting to proactive decision-making.

“Start simple, focus on what matters most and build your capacity over time.”

Understanding KPIs vs. measures

Before picking KPIs, it helps to distinguish two related terms:

• Measure: A raw data point observed at a moment in time (for example, number of main breaks in a month).
• Metric (and KPI): A calculated value derived from measures expressed as a rate, ratio, or percentage (for example, main breaks per 100 miles of pipe per year). A KPI is a metric chosen to reflect progress toward a key objective and should be SMART: specific, measurable, achievable, relevant, and time-bound.

Why KPIs are especially valuable for small utilities

• Proactive infrastructure management: Early identification of trends (increasing main breaks, lower pump efficiency) reduces large repair costs and service disruptions.
• Operational efficiency: Metrics like energy per volume treated or non‑revenue water reveal waste and improvement opportunities.
• Accountability & transparency: KPIs provide clear evidence of service performance to customers, councils, and regulators.
• Regulatory support: Well-tracked KPIs simplify compliance reporting and provide defensible documentation when required.

Key functional areas and recommended KPIs

We break utility operations into five functional areas and suggest practical KPIs for each. Pick a few that align with your most pressing risks and opportunities—don’t try to measure everything at once.

1. Water supply

• Maximum daily production capacity: Reliable production capability (gallons per day).
• Water source reliability: Days with supply disruptions per year.
• Water quality compliance rate: Percentage of quality tests meeting regulatory standards.

2. Treatment

• Energy use per volume treated: kWh per 1,000 gallons (efficiency indicator).
• Treatment effectiveness: Percent of treated samples meeting standards.
• Sludge handling efficiency: Volume of sludge managed vs. expected/target volumes.

3. Storage

• Tank turnover rate: Frequency of tank volume replacement (helps prevent stagnation).
• Storage capacity utilization: Percent of available storage used during peak demand.
• Inspection and maintenance completion: Percent of scheduled inspections completed on time.

4. Distribution

• Non‑revenue water (NRW) percentage: Water produced but not billed (leakage, theft, metering error).
• Main breaks per 100 miles per year: Infrastructure condition indicator.
• Service interruptions per 1,000 connections: Customer impact metric.

5. Customer service

• Response time to inquiries/complaints: Average hours or days to respond and resolve.
• Billing accuracy: Billing errors per 1,000 accounts.
• Customer satisfaction: Survey score or percent satisfied.

How to implement KPIs with limited resources

Small utilities often worry they lack the budget or staff to implement a KPI program. The good news: you can start small and grow.

1. Phase your rollout: Choose 3–6 high‑priority KPIs tied to your biggest risks (e.g., NRW, main breaks, response time).
2. Leverage existing data: Regulatory sampling, SCADA logs, billing systems and maintenance records often contain measurements you already collect.
3. Simplify data collection: A structured spreadsheet is a viable starter solution—consistent fields, dates, units and a simple calculation sheet.
4. Review regularly: Monthly or quarterly KPI reviews reveal trends and create a feedback loop for decision-making.
5. Engage staff: Field and office staff understand operational realities; involve them in selecting KPIs and validating data to increase buy-in.
6. Build capacity over time: As the program demonstrates value, invest in dashboards, integration, or analytics tools incrementally.

Designing a KPI dashboard

A dashboard makes KPIs visible and actionable. Effective dashboards for small utilities share several traits:

• Trend focus: Show performance over time, not just current snapshots.
• Clear targets and thresholds: Highlight KPIs below target so managers can prioritize responses.
• Audience appropriate: Make views for operators, managers, and board/stakeholders that focus on what each needs to see.
• Balanced scorecard approach: Group KPIs into categories—financial sustainability, operational excellence, customer satisfaction, and employee development—to avoid tunnel vision.

From reactive to data‑driven management

Collecting numbers is only the beginning. The real shift is using KPIs to anticipate problems and justify investments. When you consistently track performance you can:

• Identify deteriorating trends early and plan targeted repairs rather than emergency replacements.
• Prioritize capital spending with data-backed risk assessments.
• Demonstrate improvements and the return on operational changes to councils and ratepayers.

Remember: the goal is to move from reacting to events toward preventing them. Even modest improvements in measuring and acting on KPI data yield outsized benefits—lower costs, fewer outages, better water quality, and stronger financial resilience.

Practical checklist to get started

• Select 3–6 KPIs tied to your top operational or regulatory risks.
• Document where the required data already exists and how often it is collected.
• Create a simple data collection template (spreadsheet) and assign responsibility.
• Set realistic targets and review cadence (monthly or quarterly).
• Hold short KPI review meetings and use findings to guide actions.
• Scale your tools and data sophistication as the program proves value.

Conclusion

KPIs are a practical, accessible way for small water utilities to improve reliability, efficiency, compliance, and public trust. You don’t need sophisticated technology or extra staff to get started—begin with a few meaningful measures, make them routine, and let the data guide decisions. Over time, a simple, focused KPI program becomes the backbone of proactive, data‑driven utility management.

For more resources and implementation templates, visit our website and consider embedding KPI reviews into your regular management practices. The future of water utility management is data-driven—start the journey today.