The City of Albuquerque Water Utility Division is in its third year of a multi-year project redesigning the organization to become more effective and provide higher value to its water customers. This unique project systematically applies the convergence of integrated technology, reengineered operations and maintenance (O&M) practices, organization change, and process automation. The result is a utility which is already more competitive and becoming highly agile in order to meet thecomplex operating challenges and opportunities both of today and tomorrow. The Water Utility Division operates a 210 million gallons per day (MGD) (peak) groundwater system serving a population of approximately 470,000 in the metro-Albuquerque community. The Division is faced with the future operating challenges of integrating our first surface water treatment plant, arsenic treatment, and three isolated reuse water systems. The challenges also come with reduced revenue due to water conservation and a goal not to raise water rates. Although recently delayed, the State of New Mexico has passedlegislation for deregulation of electric energy, presenting a significant opportunity for reduction (or expansion) in the Division's $6 million energy budget. The Division also understands the pressures of competition and is proactively transforming to a leaner organization that has adopted best practices as a way of doing business. This project, called the Albuquerque Water Operations Management System (AWOMS), first defined business needs and then developed strategies for organization development, change management, process optimization, and technology. After three years of planning and implementation experience, this organizational transformation has yielded significant results and hard lessons learned which are, therefore,valuable to other water utilities. This paper provides an overview of the AWOMS project, challenges of piloting new business practices, lessons learned, successes to date, and plans for the future. Includes table, figures.