This paper discusses two of the most pressing issues facing the water industry today, providing superior customer service and implementing the information technology (IT) needed to deliver that service. One solution is to outsource IT and other functions to application service providers (ASPs). Not only can an ASP partner deliver hardware, software, and network administration at lower costs, it can also take on such operations as billing, remittance, and customer information systems. Outsourcing noncore activities allows utilities to devote their time, expertise, and resources to the things they do best. Other trends are also changing the way the water industry does business. Web sites provide an online marketplace that offer a full range of water and wastewater services, including procurement. Privatization, mergers and acquisitions have proved to be viable options for utilities seeking to cut costs while maintaining quality service. Includes 24 references, table.