Making the most of best-of-breed applications and ERP in housing
Housing Technology interviewed ERP, application and integration specialists from DtL Creative (David Loudon, founder), Hitachi Solutions Europe (Ciara McMillan, industry director for housing), Mobysoft (Glenn Phillips, CTO) and Manifest Software Solutions (Dave Carr, director) on the merits of housing providers using a single ERP-style platform vs. best-of-breed software applications for their various business operations.
ERP on its own?
DtL Creative’s founder, David Loudon, said, “I think that a housing provider, assuming it was large enough, would only consider an ERP system if it was not only willing to think very differently about the way it currently approaches systems thinking but also if it had suitably skilled in-house resources and/or willing to pay for external consultants.
“Having implemented large ERP systems in different sectors, where we always had large teams of people working on them, as well as having been part of the management team of a housing provider, I’ve seen both sides of the story. In terms of how implementation decisions are made by housing providers’ boards, there is a general trend to play it safe and only choose suppliers with a track record in housing. I believe this could be detrimental because there are so many other software vendors that could deliver good solutions, no matter which sector. There is also the fact that wider competition would help drive better solutions and lower costs.”
Ciara McMillan, industry director for housing at Hitachi Solutions Europe, said, “An ERP system solves the problems arising from having multiple, incompatible application systems which prevent a housing provider from understanding the true situation concerning its tenants and housing assets. An ERP holds all of the tenant data in a single, coherent database which makes it easier to understand the tenants’ needs and launch new services such as self-service.”
Mobysoft’s CTO, Glenn Phillips, said, “Are there any housing providers where they are successfully only using an ERP system? Over 99 per cent of housing providers use a housing management system in some guise or other, and even those switching to CRM, for example, still use the shell of a HMS for certain applications or as simply as a data repository.
“In our experience, what housing providers are doing is plugging in best-of-breed cloud-based applications, such as RentSense, to their main systems. These meet niche criteria and add demonstrable value. With housing providers now having so much data, there will be more tools developed, outside their ERP or HMS, that help them to make sense of their data and resolve specific issues.”
Is housing-specific software really necessary?
Regarding the question of whether housing providers are so different that they need their own sector-specific software, Manifest Software Solutions’ director, Dave Carr, said, “Having worked in a number of industries, there certainly isn’t a single solution that would suit every organisation in any one of those sectors. Housing providers are right to want sector-specific software. Some of their processes are unique to the sector, and there’s a vast amount of knowledge preserved in millions of lines of code within the applications that they use.
“However, it seems to be very much the case that housing providers are driving application development, not the other way around, which is why we end up with sector-specific products. If housing providers could define their business operations more clearly then perhaps it wouldn’t matter so much what platform the solution is delivered on.”
Loudon from DtL Creative said, “I think that for many housing providers, regarding their entrenched use of HMS, the idea that ‘we’ve always done it that way’ is a considerable comfort factor. There is definitely an attitude that housing providers believe their challenges and requirements are unique, but they aren’t. Most of their business processes, transactions, challenges, goals and so on are just as applicable to any other service-led business. It’s all about risk vs. reward when moving out of housing providers’ comfort zones.”
Is best-of-breed right?
Extolling the advantages of best-of-breed applications, Mobysoft’s Phillips said, “Best-of-breed systems typically use the latest technology and are designed for a specific niche or need. For example, they are cloud-based, platform-neutral regarding the ERP/HMS, much more agile, and they limit both the time and expense of managing or building applications in-house.”
Hitachi’s McMillan said, “Very simply, best-of-breed applications provide quick fixes for individual business requirements but they don't address a housing provider’s holistic needs. To some extent, best-of-breed applications create more problems due to the need to then integrate them and the data they contain, as well as requiring more time, skills and costs to maintain.”
Carr from Manifest Software added, “Regardless of whether best-of-breed means the best product in the market to fulfil a particular requirement or the product with the greatest foothold in the sector, it should always mean that the product’s functionalities are based on known use and business processes, straight out-of-the-box. It shouldn’t need any major development programmes for it to function; best-of-breed should mean swift, smooth and cost-effective deployment. The disadvantages only arise when there are problems with integration, often from software providers who don’t support open integration architectures as well as they could.”
Or is ERP better?
DtL Creative’s Loudon said, “Although ERP systems are usually based on tried-and-tested technology platforms, one of the questions we always ask is: how integrated is it really – did the developers build the whole solution on a uniform platform, or have disparate systems been acquired, linked superficially and perhaps hidden from you? Keeping the question of integration, hidden or otherwise, and your business processes in mind, will your end-users have a consistent experience and easy access to data across all areas?”
McMillan from Hitachi said, “The advantage of ERP means having a single source of data, eliminating the need for integration. The disadvantage is that because the implementation is holistic and takes into account all of a housing provider’s needs, the implementation will take longer, require greater resources and cost more, balanced against better long-term benefits. In short, ERP demands a longer perspective in terms of housing strategy and technology investment.”
Mobysoft’s Phillips said, “An ERP system is useful for being a data repository tool, where master data can be stored. However, ERP systems are so broad that housing providers usually have two main options; do a standard implementation of the ERP system or a bespoke and more complex implementation of it. The first option will mean that the system will be unlikely to match their precise needs, so they’ll have to make do with further inefficiencies, while the second option will be more expensive to set up in the first place and will then be more complicated to maintain, with no guarantee of success along the way.”
Finding the middle ground
Regarding the question of whether housing providers can find a middle ground between best-of-breed applications and a single ERP platform, Loudon from DtL Creative said, “There isn’t a middle ground to be found. The two options are very different in terms of architecture, implementation and, in some cases, usability. As analogy, it’s rather akin to a choice of lifestyle; you can choose to rent a house or buy a house, but you can’t do both.”
Carr from Manifest Software countered, “I think that there is a middle ground between best-of-breed and ERP, and as a systems integrator, it’s a core part of our role to find that middle ground, with many larger companies also support this idea. Well-known names in ERP such as SAP, Microsoft and Sage have whole communities of partners developing bolt-on solutions and they are happy for them to do so.
“The difference for the housing sector is that the communities delivering innovative solutions are not always welcomed to the same extent by the major ERP providers, and the integration routes and methods are not as transparent, making that middle ground far harder to find.”
Hitachi’s McMillan said, “There are numerous ways of combining best-of-breed and ERP. They will offer some of the advantages of ERP-style solutions but they won’t eliminate all of the disadvantages; CRM is a good example of this, where they can combine back-office data into a presentation layer but it doesn’t solve the question of having a single, reliable data source.”
A lack of housing expertise
By their very nature, ERP suppliers tend not to be housing-sector specialists, so why choose them for housing? Carr from Manifest Software said, “ERP suppliers have the skills and technology to build great solutions, and housing providers have the sector-specific knowledge and understanding. In the same way that collaborations happen across a multitude of other sectors, there’s absolutely no reason why the two can’t work together to bridge the gap.”
DtL Creative’s Loudon said, “One area of consideration when choosing a software partner is obviously housing experience, and most housing IT providers have consultants who have worked in housing which is certainly beneficial. That said, I would argue that if other sectors can choose ERP solutions spanning across different business models then housing should be no exception.
“However, it does depend on a housing provider’s resources and its state of mind in accepting that it is a different kind of project altogether. Furthermore, ERP suppliers can offer greater long-term stability when compared with housing IT suppliers merging, getting bought, or struggling with R&D development and growth.”
ERP instead of HMS?
With the advent of the latest breed of mostly cloud-based housing management systems, could they be used, in effect, as a housing provider’s ERP platform?
Hitachi’s McMillan said, “No, because they are not ERPs. An ERP system starts with the finance module and everything else is intrinsically linked to that. Ultimately, this means that in a well-designed system, everything can be costed. ERP is therefore a fundamentally different concept to an HMS, so for housing providers to be sustainable and build more homes, they need to consider the benefits and efficiencies that an ERP-led strategy could bring not just to their internal operations but to the tenants as well.”
Mobysoft’s Phillips said, “Considering the latest housing management systems, it’s important to take into account the fact that the first iteration of any software is almost always imperfect; in fact, I would argue that it usually demonstrates how much more work is needed to make it properly functional. In the longer term, using an HMS as a surrogate for a ‘proper’ ERP system could be the achievable, but it’s not realistic in the shorter-term.”
Manifest Software’s Carr said, “An HMS would likely deliver the best core platform on up-to-date technology, but it might not always be able to keep up with the demands of rapid technological advances. However, as long as we remember to encourage and welcome the entrepreneurs who push the boundaries and focus on solutions to very specific issues, then yes, an HMS could become a housing provider’s ERP platform.”
Housing Technology would like to thank DtL Creative (David Loudon), Hitachi Solutions Europe (Ciara McMillan), Manifest Software Solutions (Dave Carr) and Mobysoft (Glenn Phillips) for contributing their thoughts and opinions to this article.