Many housing providers want to increase their income from non-traditional sources, resulting in an increasingly diverse set of operations. They are consequently taking on new responsibilities and expanding on their traditional remits, from providing social services to partnering with commercial enterprises.
Based on our experience, here are the three greatest barriers to success when housing providers are considering diversification of their services.
1. Entrepreneurial spirit vs. regulation
Housing providers are no longer ‘just’ about their core activities; they’re builders, investors and social care providers among many other new roles. Therefore, when identifying and following new revenue streams, there’s a lot to be said for embracing an entrepreneurial spirit.
To generate new income, housing providers must be willing to take risks and explore new business models, particularly when they are competing with existing businesses in the same areas. However, there are strict regulations within the housing sector; complying with these while also exploring new areas can be a challenge. While businesses may do what they can to seek out the lowest costs by cutting corners to attract new customers, housing providers are held to very exacting standards and must lead by example.
2. Diversified supply chains
As housing providers enter into new areas, from market renting and student accommodation to regeneration projects and private finance initiatives, new supply chains will need to be created, covering areas such as financing, operations, technology and staffing.
If supply chains haven’t been reviewed recently, now is the time to check where your suppliers stack up in terms of both compliance and value for money. Smart finance solutions, including source-to-pay software, can expedite and automate the process, ensuring that contracts are regularly reviewed, invoices are paid on time and a catalogue of suppliers can be maintained.
3. Tackling standardisation
As organisations grow, there is generally a trend towards process standardisation and greater automation. However, standardisation and automation can also lead to inflexibility and a lack of innovation.
Housing staff should be able to access the right information at the right time, with integrated contract management solutions to create a more accessible and uniform approach.
While housing providers face hurdles in diversifying their operations and generating new income streams, by addressing these three barriers – balancing innovation and regulation, reviewing supply chains and tackling standardisation – they can thrive in a testing economic environment.
Ilija Ugrinic is the commercial solutions director at Proactis.