Housing Technology ran a series of exclusive interviews with the leading suppliers of housing management systems to gain a unique insight into their perceptions of the market, how market trends will affect housing management systems, differences between the suppliers and their thoughts on choosing the right housing managemeny system.
There are a number of trends within housing which appear to be affecting almost all sizes of organisations, and consequently their technology plans. The first is the continuing consolidation of both technology suppliers and housing providers themselves, either through mergers and acquisitions or simply through the formation of group structures or development conglomerates in order to get economies of scale.
David Meaden, chief executive, Northgate Public Services, said, “Successful housing groups will continue to acquire new members as pressure mounts on financially-exposed organisations and the arguments favouring economies of scale gather force. However, some ALMOs continue to be frustrated by the levels of control exerted by their parent authorities and will push the boundaries of their management agreements.” Martyn Rees, operations director, IBS OpenSystems, added, “Smaller HAs are particularly vulnerable, both to larger ‘predatory’ housing groups and also because they may struggle to achieve the economies of scale of larger organisations in the sector.”
The formation of the TSA and the Housing and Communities Agency inevitably mean a greater focus on the needs of tenants and providing greater transparency for service charges. David Mannion, sales director – housing and asset management division, Civica, said, “The TSA focuses attention on how it feels to be a tenant, so improving tenant services, and therefore satisfaction, is all about looking at the fundamentals and identifying specific areas, such as ASB reporting.”
Wider technology trends will also affect housing. Tony Smith, managing director, MIS-Active Management Systems, commented that the dominance of Microsoft means that new systems need to embrace de-facto standards such as Sharepoint and SQL Server and avoid the ‘lock-in’ associated with older, proprietary platforms. Paul Tomlinson, managing director, HousingIT, added, “Housing organisations should recognise that while IT hardware is becoming cheaper, communications are getting faster and software has more functionality and better ease of use, IT and database staff are getting more expensive and scarcer.”
These broad industry trends will clearly trickle down to affect housing management systems, their users and their suppliers. With an average HMS replacement cycle of 6.6 years across pretty much all sizes of organisation (source: Housing Technology 2009 report) and notwithstanding the current economic situation, there are simply fewer customers for the ‘traditional’ HMS with complex functionality aimed at mid- to large-sized housing organisations. However, there is considerable growth expected from smaller organisations wanting a reduced-functionality HMS delivered as a hosted service on a per-user, per-month basis.
With around the same number of suppliers chasing fewer deals, they are focusing on their existing customers or embarking on more flexible, partnership-based deals where the HMS supplier shares the project risk. At the same time, the economy is causing some buyers to accelerate plans for HMS implementations that deliver cost reductions, while others are more cautious about capital expenditure and making much slower decisions.
David Meaden commented, “Housing management systems now need to be flexible to incorporate new stock through group structures, integrate with a wider range of systems, and improve the consistency and accuracy of communications with tenants.”
Martyn Rees added, “Group structures by definition require sophisticated group finance facilities, allowing the individual companies to process independently, but also to consolidate accounts to group level.”
Knowing what to expect
In our Housing Technology 2009 report, less than half of the respondents thought that the systems delivered actually matched their pre-sales expectations (as set by the suppliers themselves).
Paul O’Reilly, senior pre-sales consultant, Aareon, said, “The first generation of integrated housing management systems appeared in the early 1990s and it was a complete shock to the housing sector as they simply didn’t know what to expect. They are now on their second or third system so they now have a much better idea of what to expect. We supply resources but it does need to be matched by a similar commitment by our customers to make it work.”
David Mannion added, “We have reached the point now where housing management systems are fairly similar in terms of functionality and performance, on top of which the contracts for these systems leave few places to hide in terms of not delivering. The difference now is between the credibility and personalities of the companies and people involved in providing the systems.”
Being a good customer
However, housing organisations’ satisfaction with their technology supplier is a two-way street; as customers, are they doing everything they can increase the chances of project success?
Roger Birkinshaw, associate director, Capita Public Sector Software, said, “Housing organisations now realise the importance of experience; we’ve reached the point where customers come to us to ask how to take the projects forward, whereas this was never the case four or five years ago.”
Understanding the importance of IT is critical. Paul O’Reilly commented, “Software is merely the means to an end, so there needs to be a culture of investment in strategic IT. At the same, it is hard for housing organisations to measure the value of IT compared with other industry sectors as there are fewer measurable outputs – tenant service and satisfaction, and repairs and arrears performance are really the only metrics.”
While some of the project specifications received by the suppliers were often shopping lists of safe, well-proven applications, Aidan Dunphy, product manager, Orchard Information Systems, said, “We have been pleasantly surprised that many of the quasi-commercial housing associations are great advocates of cutting-edge technology and are keen to use it to deliver better services to tenants or more efficient internal processes.”
One size doesn’t fit all
As David Mannion from Civica said, there’s little significant difference between the various housing management systems, so purchasing decisions are often swayed by other criteria such as the suppliers’ corporate credibility and brand, the personality and account management skills of their staff, and their attitude to flexible or innovative commercial terms.
Paul O’Reilly said, “End-to-end suppliers are great if you want one supplier that can supply various solutions to an entire organisation, but there are also a large number of housing associations that are better off with more housing-centric suppliers such as Aareon. Furthermore, there is a growing split between suppliers with old proprietary databases and those with new platforms such as SQL Server.” Size of organisation was also a determining factor for IBS OpenSystems as Martyn Rees said, “The main distinction between HMS suppliers is the size of customer they aim at. Many only deal with small organisations, offering a turnkey solution. At the other end of the scale, some suppliers will only bid on the top 20 per cent of the market.”
Paul Tomlinson said, “After the recent round of supplier acquisitions, there are still too many products on the market. Some suppliers are almost giving away their housing management systems, but even then it could still be expensive as they’re probably locked in to those systems for at least seven years.”
HousingIT delivers its HMS using the software as a service (SaaS) model, where HousingIT provides a hosted service to housing organisations on a per-user, per-month basis. Tomlinson added, “We have the advantage of starting from a blank piece of paper. We can use the latest technologies, such as Silverlight for rich web-based screens, while avoiding the need to ‘reinvent the wheel’ by using existing Microsoft functions, such as the calendar in Exchange and Outlook. Another benefit of Microsoft products is SharePoint – document management on steroids!”
Orchard emphasised the importance of customer service. Aidan Dunphy said, “Our ethos is that staying in close touch with customers is more important than large financial resources or stock-exchange listings.”
Scope for organisational growth and change was highlighted by Northgate. David Meaden said, “The main difference between suppliers is the degree to which they meet the fundamental needs of their customers while also offering incremental products and services to support their customers’ wider needs.” This view was broadly shared by Civica; David Mannion added, “The focus is moving away from housing management systems as standalone, monolithic entities in the back office towards a more holistic view – it’s not just the implementation, it’s beyond that into a long-term relationship.”
Integration and reporting
While customer requirements for new or updated functionalities vary in the specific details, they generally share a common theme of adding or integrating disparate applications for better communications, decision making, and reporting.
Paul Tomlinson said, “The core functions, such as void management, repairs and rents, have changed little over the years, but now there’s strong demand for seamless integration with CRM for customer and call-centre management, document management, mobile services, workforce scheduling and mapping.”
“Good, honest reporting is the main requirement we hear from HMS customers, and where most systems fall down badly. It should be the first thing shown in a demo, not the last or six months after implementation”, said Tony Smith. This view was echoed by Paul O’Reilly who said, “We’re seeing at least 5-10 interface requirements as part of every tender, with the aim of delivering strategic views, in particular integrating the finance system with the other systems as part of ALMOs and LSVTs.”
Roger Birkinshaw said, “Smaller organisations still need some sort of HMS. Rather than developing a housing system just for them, it makes much more sense to offer a cut-down, pre-configured version of the original system with some of the functionality switched off.”
Finally, looking at the project processes around the implementation or upgrade of housing management systems, the housing sector is catching up with the private sector. Aidan Dunphy said, “While project timetables are getting shorter, housing organisations are finally recognising the importance of project methodologies, such as Agile development, and are willing to work collaboratively, rather than in the traditional and often limiting customer-supplier relationship.”