ShuiGongYe.Com held an interview with Siveco China GM, Bruno Lhopiteau, about Siveco's unique approach to improve maintenance in the Chinese water treatment industry.

 
1 – Could you please tell us how has Siveco developed in China?

Thanks for this interview, I welcome the opportunity to talk to media specialized in the water industry. Water treatment and distribution are key market segments for us, where we have consistently achieved excellent ROI for our clients – mostly through reliability improvement. I must say, however, that we find it very hard to get our message across to the Chinese market. I will try to focus on the key aspects of our business and how we help water infrastructure owners and operators achieve measurable financial improvements from our services.

 
Siveco is Europe's leading supplier of Computerized Maintenance Management Systems or CMMS. Some people call it "EAM" but we think this term, originating from the IT world, is very misleading. The CMMS is a management system, before being an IT system. In Europe, we work with the three major players, namely Veolia, Suez and Saur, as well as with many government-owned water utilities. If you travel to Paris for example and visit its surrouding areas, like Versailles palace, you should know that the city's entire water infrastructure is managed with our system COSWIN. We are also very active globally: you probably know the famous Man-Made River project in Lybia, perhaps the world's largest infrastructure project? We also work with them!

We entered the Chinese market at the end of 2004 with the idea to provide maintenance improvement, through the implementation of our COSWIN CMMS, to network infrastructures. Based on my personal experience in the Chinese maintenance market since 1997, I had noted that the traditional EAM suppliers were targeting plants, not networks. In Siveco's experience however, network infrastructures, or multisite organizations, are more likely to achieve improvement from using such a system. We realized the potential and entered the market.

In 4 years, we have grown to be the largest foreign-owned maintenance consultancy in China and a significant player in the CMMS market. With about 40 projects so far, we have demonstrated measurable ROI for large multi-site assets owners in various industries. Sino-French Water and other Suez subsidiaries remains our flagships clients in the water industry. Today we have a team of 18 maintenance engineers located in Shanghai and continue to enjoy a good growth.

2 – Please tell us something about your product

To be very clear, I would say we are not selling a product. We are not even selling a service. We are selling ROI through improvement in the management of maintenance. The value of what we do is there. ROI on our projects is typically below one year, sometimes much faster.

Our projects usually consists in structuring the maintenance organization around a CMMS, to ensure that technical-financial analysis can be performed, leading to better maintenance decisions. Our projects typically start with a maintenance audit, followed by the fast implementation of our system COSWIN, a highly graphical, easy to use, system running on a web-brower or even a mobile device. Based on the system, without changing the current maintenance organization, we coach the maintenance team to conduct various analysis and make improvement decisions.

3 – We know that Siveco China has achieved a lot in past few years. So what is your goal and strategy in future?

I believe – or rather I have observed – that with the financial crisis, investors are more concerned with the Total Cost of Ownership for their investment. This is also true of government project. There is more concern for not wasting money, which means more focus on maintenance, from the initial design stage. This new concern (it wasn't at all the case a few years ago) is key to our growth, as it fits perfectly with what we offer. I am quite confident this will help us grow and become the leading player in infrastructure maintenance projects.

Already we are being consulted for complex government projects, for example, we support a project which combined monitoring and inspection management systems with the local design institute, for which ther providers lack experience. Most likely we are going to team up with excellent local players, such as design institutes, to combine our strengths and achieve the best results.

Our ultimate goal as a company is to serve our employees and our society. This is the meaning of "company" is English – eat the bread together. By helping government-owned utilities to optimize the utilization of their assets, we help better manage public money and bring better services to the people, to all of us. This should be the goal of every company, I am afraid however it is not always the case!

4 – Has your company been affected by the financial crsis? What's that mean to you? Do you think it is an opportunity or threat?

The immediate result of the crisis has been the cancellation of major contracts by multinational companies, at the end of 2008. This is certainly affected our performance in this first half year. I think these companies are short-sighted. I compare this to our own actions: Siveco has invested more in the crisis, we have opened a R&D unit for the development of mobile solutions in China, we have spent more on marketing, we have continued to train new graduates in modern maintenance practice etc. On the other hand, the crisis has created more awareness of maintenance issues. Companies are clearly more interested in optimizing their assets, rather than build new ones. We are receving a lot of emails or calls from companies looking for ways to achieve better returns through maintenance. In fact, we had never had so many business opportunities! So, I think the crisis will turn out to be a good thing for all of us.

5 – Lots of MNCs are aiming at Chinese water treatment industry. From your point view, how is the competition in this market? How is your business now in this market?

As you understand, we are quite different from other suppliers. We don't really have direct competitors. Competitors are American software vendors, big IT firms that provide IT systems. That's not what we do. On the other end, specialized engineering firms may be able to offer maintenance services or advices, but they don't have a system and lack experience of maintenance improvement in China. Sometimes, customers think that by purchasing better machinery, they do not need to improve their maintenance management – so instead of spending 1 million RMB with us, they use it to buy whatever high-tech equipment. I believe they are mistaken. Management is the foundation: purchasing decisions are the result of better management, but doesn't replace it. This is especially true when talking about energy savings – which is always a hot topic. We found that significant energy savings can be achieved by implementing simple and inexpensive preventive maintenance habits and small design changes. Instead, companies go and buy energy savings equipment. They miss on big savings opportunities. Our development will be fastened when companies start to understand that. For us, it means we should communicate more, share our successes. We have launched an initiative to have our customers talk to each other, exchange ideas and experience. I hope this interview can also contribute to a greater awareness of maintenance issues.

6 – Could your customers accept your pricing strategy? Compared to other contries, what is the special requirements from Chinese companies? Do you adjust your pricing based on that?

Customers are often cost-focused, while they should be ROI-focus. Is it better to spend 100,000 RMB and no return on investment or 1,000,000 RMB and get 1,000,000 RMB back annually, i.e. every year? This is the issue we are facing when it comes to pricing. State-owned companies also tend to think that ROI is not important, they say "because anyway we have fixed budgets". This is a major misunderstanding of how the government works: it is like saying that state-owned companies must be wasteful. ROI doesn't mean that budget will be cut next year, it could mean better usage of your production capacity, less accidents, better compliance to regulations, less overtime work for your technicians, etc. In the end, managers who manage efficiently will get praised and promoted, which is also a positive outsome of improvement projects.

Having said that, our prices are very reasonable. We have recently decided to increase all our prices 20% and we have no problem selling at this price level!

7 – How is your distribution in China? How do you develop new market? Are you searching new partners? What's the requirements on them?

Most of our projects so far have been implemented by us, as few people have the necessary know-how in China. Two years ago, we have launched our partner program named VAPP "Value Added Partner Program" where we have started to identify and train suitable partners. Today we have several active partners, working alongside our own teams to ensure we can reach clients of all size, all over China, and deliver at the right quality-level, the "Siveco way". We are still looking for partners. The main requirement is partners should understand our positioning and what I explained about ROI. If partners think we are selling products and should be as cheap as possible, it won't work.

8 – What kind of after-sales services we are providing to your customers?

For us and our customers, "after sales" is the most important. This is the period where ROI will be achieved, where better maintenance programs will be defined etc. Our entire business is "after sales". After a project is finished, which means our customer's team is using COSWIN to manage their daily maintenance work and starts doing analysis in the system, we provide "coaching" services and regular audits. During these audits, our maintenance experts will assist customers during their regular meetings, for example using analysis from COSWIN to make decisions as to redesign, replacement, etc. This is where most ROI is achieved. We recently helped a large client to redesign some of their pumps, as we had identify hidden defects using COSWIN. In fact a design problem, dating back from the plant's construction 5 years before, was never identified and resulted in many production losses. With our help, the problem was fixed and the realiability of the pumps increased tremendously!

We have also recently launched an enhanced support program, whereby we guarantee year-to-year improvement in the utilization of COSWIN, based on measurable indicators. We guarantee it. This is the kind of offerings that makes all the difference with competitors that only sell a software, let cheap IT supplier implement it, then run away. I think, especially in the water industry, there are a lot of EAM systems, or "Equipment Management Systems" which have been purchased and are not really used, or at least have never provided any real ROI. This is why I am confident our approach will be understood by water companies that have already experienced that.

Thanks a lot for your time. If your readers have any question, please feel free to direct them to our website or let them call our office. We have an online survey which can be used to identify potential ROI, this could be the first step for a project.

 
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