Housing Technology interviewed IT experts from Clearview, DXW, Horton Housing Association and PIMSS Data Systems about the merits of consolidating existing business applications.
The most common reasons for application consolidation tend to be around reducing the complexity of managing a diverse portfolio of business systems and minimising data duplication between them, but there are other important benefits.
Mark Hobart, the managing director of Clearview, said, “Re-using application functionality across the business can save on capital licence and maintenance costs, reduce the need for training and enhance existing software investments. It can also lead to some of the more granular functionality available within an application being used to really maximise its use.”
Martin Nowak, a software project manager at Horton Housing Association, said, “The key advantages of application consolidation are reduced costs and time spent on application upgrades and the standardisation of processes, as well as reduced complexity and improved security.”
Reflecting the need of housing providers to achieve value for money, PIMSS Data Systems’ managing director Rachel Patterson said, “In other sectors, the quest for value for money often actually leads to increased spending on technology because good decisions can only be made with accurate and comprehensive data. Where a piece of data is held in more than one system, integration or interfaces are essential to reduce the overhead of double entry and to manage the risk of conflicting information sources.”
However, the actual process of consolidating applications is difficult, with the potential benefits sometimes being eclipsed by the time and costs of doing so. Horton’s Nowak said, “There are many disadvantages to application consolidation, such as the time it takes to see the cost reductions, the complexity of an application consolidation programme (e.g. identifying which applications to consolidate and how to consolidate them) as well as the potential necessity to retrain users to change their existing ways of working.”
PIMSS’ Patterson said, “Changing any critical IT system carries inherent risks and costs both time and money. These costs and risks grow exponentially with the size of the system involved and can lead to housing providers continuing to use outdated systems or putting up with poor service and high support costs because they cannot face going through the change process.”
Best of breed?
Application consolidation inevitably raises the question of the merits of having a suite of best-of-breed application, each dedicated to a particular area, versus having fewer applications, with the consequent disadvantage of having to make some sacrifices in terms of functionality.
Clearview’s Hobart said, “Best of breed applications are more feature rich and you don’t need to compromise on functionality. Best of breed applications have their place, especially within a consolidated application strategy as they can help to mitigate some of the risks. A good example is business intelligence and reporting tools. In many applications, there are reporting tools but these are often restricted for use within that application. A new application can often bring with it a new reporting tool with its own challenges to leverage its value to the full or, in the worst case, no reporting tool at all.
“In contrast, a best of breed reporting tool that will work across any data sources means reduced training as existing skills can be used to tackle new application requirements, less IT resources required, cost savings on implementation and significant savings on licences. It also opens the door to take full advantage of an application’s more granular functionality as you have skills within the organisation that really understand the application and how to use it.”
PIMSS’ Patterson said, “Best of breed applications are very focused on their target market. Suppliers can specialise and develop a deep knowledge of the relevant business functions and this enables them to provide best practice advice. IT suppliers can also be very responsive to requests for change and allow a high degree of flexibility in their system when it’s more specialised.
“At the same time, the applications are designed with interfaces in mind to allow organisations to pick the very best combination of systems for their needs. A single solution to all an organisation’s IT needs seems very attractive but few systems are both truly integrated and meet all requirements. Why put up with poor functionality in one part of a system, just because another part of the system meets the needs of a different department? If two systems can interface data seamlessly and provide a better overall service, they can provide better value for money than a single monolithic system.”
Rip and replace vs. application evolution
Any application consolidation programme needs to balance ‘ripping and replacing’ existing legacy applications with supporting their evolution by using additional, modern applications.
Hobart said, “This is a tricky area and each case needs to be taken on its own merits. At some stage, the availability of skills and platform support for legacy applications means that the business risk of continued use is untenable. That said, you can often extend the life of some perfectly robust and useful applications by using best of breed supporting technologies such as reporting tools.”
Patterson said, “A well-designed modular system will allow organisations to break a large change programme into manageable projects to reduce the risk and the impact on front-line staff. The core system can be installed while other functions remain on the legacy application temporarily. As and when a business case is made for each additional area, new modules can be implemented gradually.
“In many instances, change can just be a case of using already purchased modules more widely. For instance, a module designed to track gas safety can also track electrical inspections, fire risk assessments, equipment safety checks, tree hazards and all sorts of other inspections and cyclical maintenance tasks often held in a wide array of spreadsheets. Centralising all of these in a single set of registers allows more visibility, better cost control, easier cover for absent staff, more comprehensive auditing and less chance of properties being missed out.”
Managing an application consolidation programme
Patterson said, “The first crucial step is to understand what is already available; it is surprising how many organisations don’t know what licences they hold, particularly for systems like GIS which may be bought by one department but could be of use to several others. It is worth including all the random spreadsheets and Access databases within this review, to see where users have developed their own approaches and rely over-heavily on one person who understands Excel inside out.
“Where the disparate systems are not interfaced together, it is also worth exploring options for improving the current set-up instead of ripping it all out. Retraining staff, re-engineering a few business processes and adding integration between systems can be very cost-effective and have a major impact in some situations.”
Harry Metcalfe, the managing director of DXW, said, “Services need good portfolio management, with technical expertise available to advise on how architectures could be refactored for better reuse, and hence, better efficiency, with teams who are incentivised to do the hard work to make things simpler. Organisations need to use techniques such as Wardley mapping to help them understand the systems landscape that they’re in, communicate it clearly, and make strategic decisions about how to change it.”
As with any business change programme, it’s important to establish from the start how you will measure any performance gains, such as speed, cost and productivity, and build those metrics into the overall programme.
Clearview’s Hobart said, “There are obvious maintenance and support revenues and resource costs that are directly attributable to reducing the application estate within an organisation. There are also methods of measuring process efficiency which should be taken before and monitored thereafter to ensure business benefits are delivered.”
PIMSS’ Patterson concluded, “Some gains can be measured financially, while others can be measured with ‘before and after’ estimates of hours per week spent on particular activities. Other measures are less tangible; how do you measure the rise in confidence that if the HSE come knocking, you can provide all the information they ask for quickly and correctly? Its value in lowering risk is no less because it is harder to measure in pounds and pence.”
Housing Technology would like to thanks Mark Hobart (Clearview), Harry Metcalfe (DXW), Martin Nowak (Horton Housing Association) and Rachel Patterson (PIMSS Data Systems) for their editorial contributions to this article.