By Marc Bijasson
In the evolving landscape of water utility management, the shift toward digital metering is no longer a question of if — but when. Yet, for many small and mid-sized utilities, investment decisions are still heavily influenced by the purchase costs. This narrow focus can obscure the broader financial picture and hinder long-term progress.
A comprehensive approach — one that prioritizes Total Cost of Ownership (TCO) and Return on Investment (ROI), can be the foundation for smarter, more sustainable decisions.
The Case for a Broader Financial Perspective
While larger utilities have increasingly adopted TCO and ROI-driven frameworks, many smaller utilities continue to rely on traditional procurement models that emphasize initial purchase price. This approach often overlooks hidden costs and undervalues the long-term benefits of digital metering solutions. From extending asset lifespans and securing water revenue to enhance operational efficiency, the true value of digital transformation lies in its ability to deliver measurable returns over time.
High upfront costs may seem prohibitive unless they are weighed against the long-term savings and value creation that digital solutions offer. Without this broader perspective, utilities risk delaying critical upgrades—jeopardizing their ability to meet growing sustainability demands and regulatory expectations.
Understanding TCO and ROI
TCO encompasses all costs associated with a metering solution over its entire lifecycle—not just the purchase price. This includes installation, maintenance, replacement, and disposal costs. ROI quantifies the financial benefits generated by investment, such as operational savings, increased revenue, and reduced water loss.
Together, these metrics provide a balanced view of both cost and value. TCO helps utilities avoid unforeseen expenses, while ROI strengthens the business case for investment. When used in tandem, they empower decision-makers to make informed, future-proof choices.
A Strategic Tool for Every Stage
Viewing a TCO/ROI-based approach not merely as a financial calculation, but as a strategic tool that supports utilities throughout the entire decision-making process is essential for project success at small and mid-sized systems. When preparing and evaluating Requests for Proposals (RFPs), this approach enables utilities to structure tenders in a way that allows for transparent comparisons — not just costs, but of long-term value.
Moreover, it plays a vital role in building a solid business case by translating technical specifications into financial terms that resonate with finance departments and other internal stakeholders. Finally, it provides a compelling, data-driven foundation for securing buy-in from boards, investors, or municipal leaders, who often require clear justification for large-scale infrastructure investments.
Evaluating the Full Financial Picture
When considering a digital metering solution, it is essential to assess both the costs and the value across the full lifecycle of the system. This begins with understanding the expected lifetime of the meters. Static meters, which contain no moving parts, offer longer durability and sustained measurement accuracy. Battery life, regulatory requirements for meter replacement, and the choice of communication technology also influence how long the solution will remain effective. The initial investment must account not only for the cost of the meters themselves, but also for installation labor, supporting infrastructure, and software platforms such as Meter Data Management (MDM) systems and analytics tools.
Over time, utilities must also consider the cost of maintaining and replacing meters, managing network infrastructure, and implementing fallback systems in case of communication failures. Additionally, ongoing software and subscription fees — particularly solutions that rely on public networks — can accumulate significantly.
Finally, end-of-life disposal costs, though often overlooked, are expected to rise as environmental regulations tighten. Utilities should therefore evaluate the recyclability and disassembly potential of the meters early in the procurement process.
The value of a digital metering solution extends far beyond operational efficiency. A robust TCO/ROI analysis should reflect the full spectrum of benefits. Automated data collection eliminates the need for manual readings, reduces human error, and streamlines customer service processes. High-accuracy meters that retain their performance over time enable fair and transparent billing, often uncovering previously unbilled consumption and increasing revenue. Furthermore, smart meters provide early detection of leaks, helping utilities reduce water loss, and avoid costly repairs.
Utilities have successfully recovered substantial hidden revenue and identified major leakages shortly after deploying smart metering solutions. These real-world outcomes underline the importance of including value — not just cost — in every investment decision.
Focusing solely on price is a short-term strategy that can hinder progress. A TCO/ROI- driven approach provides the transparency and insight needed to make smarter, more sustainable decisions.
Marc Bijasson is a leader in smart water metering and IoT solutions and currently serves as head of market product management at Kamstrup. With more than 20 years of experience in product management, innovation and electronics, Bijasson combines strong technical expertise with strategic insight to deliver sustainable, high-value solutions for global water clients.
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