Housing Technology interviewed experts from Civica, Horton Housing Association and MIS-AMS on the future of housing management systems (HMS) in the context of new web-based services, the emergence of ERP systems in housing and welfare reform.
The latest generation of HMS
As everyone knows, technology is changing all the time, and although the housing sector doesn’t change quite so fast, the past few years have seen a mass of regulatory and legislative changes. So, how do today’s latest-generation HMS differ to those from, say, five years’ ago?
Civica’s executive director for housing and asset management, Jeff Hewitt, said, “Today’s HMS don’t really differ much from how they looked five years ago. This is down to customer demand, as the majority of HMS suppliers haven’t invested in new core technology solutions; instead they are relying on bolt-ons to deliver capabilities such as mobile working, customer care and more modern communication channels, such as SMS and chat.
“For our part, Civica is offering something genuinely new in the market to meet new demands. This is something which most IT suppliers tend to shy away from due to the time and huge investment needed to deliver new systems to the market.”
Chris McLaughlin, managing director of MIS-AMS, said, “Through the years, the purpose of the HMS has changed. Previously, its sole purpose was to manage data but now, through the maturing of housing providers’ processes and procedures, it’s being used more and more to identify efficiency savings through automation and analytics.
“Although the term ‘big data’ is better known now, it has been around for a while. The important thing today is not how to store data but how to use it to realise savings and benefits. Integration is the key to bringing together web browsers and mobile solutions, as is the drive towards leaner and more efficient processes. MIS AMS offers both; excellent integration and efficient processes via its workflow engine and single database.”
How to choose an HMS
Alongside their underlying IT infrastructure, an HMS is arguably the most important and business-critical system for every housing provider. So, apart from the usual research, due diligence and RFI/RFP tendering processes, what should housing providers look for when choosing a new HMS?
Horton Housing Association’s software project manager, Martin Nowak, said, “Every HMS provider will claim their system is the best but, as always, the devil is in the detail. It is vitally important to establish what standard reporting tools the system have (preferably based on industry standards/frameworks), how flexible it is for setting up different permissions levels and how well it integrates with other systems, such as for finance, floating support and mobile working. It is also essential to visit reference sites to get feedback on the customer service experience and the supplier’s responsiveness.”
Civica’s Hewitt said, “When looking for a new HMS, housing providers should look beyond a system that can just deliver the core functions, such as rent collection, asset management and voids. In our opinion, housing providers need a single platform with fully-integrated customer service capabilities, including CRM, self-service portals and multi-channel communications. Systems that are over 20 years old may have mature functionalities, but they come with the ‘baggage’ of a database structure and modular approach and are therefore not built to meet future demands.
“In the past, housing providers have put far too much effort into selecting systems based on detailed functionalities, rather than technology and capability. For example, a system based on modern technologies can be much more efficient and reduce costs through different deployment options, such as cloud hosting. As well as making the back office run more smoothly, a modern system can also offer new ways of working that can extend the use of the system and deliver a better level of service to tenants.”
HMS vs. ERP
As Orchard’s head of product strategy, Aidan Dunphy covers in his ‘An ERP by any other name’ piece, some of the UK’s larger housing providers are examining the merits of ERP systems (from the likes of Microsoft and SAP) versus a ‘traditional’ HMS.
McLaughlin from MIS-AMS said, “With ERP, people argue that ‘you get all the components you want’ and when you put it on paper, it appears cheap at first. The challenge then is integration because none of the components talk to each other and interfaces are required. For example, if you have five systems as part of an ERP solution, such as one front-end core system and then four peripheral systems, each of those will require annual maintenance. For each side of the interface, you will also pay annual maintenance fees (so, four systems would be eight interfaces). Then you’d like all four systems to talk not only to the core system, but to each other; the costs begin to spiral upwards. So for something that could have been integrated with one supplier, one annual maintenance fee and not requiring any interfaces, you suddenly have 16 separate costs which, individually, may seem small but as a whole are expensive.
“And what happens if I fall out with one supplier? You look at new products to replace the existing one and then pay new interface costs. And then, what if I have a problem with an interface? You get several suppliers around the room with each stating that it’s not their system causing the problem! Overall, ERP appears cheap at first, but the reality never supports this.”
Civica’s Hewitt said, “In theory, a full ERP system, and by this I mean more than a housing, finance and HR system bolted together, can offer efficient end-to-end processing, reduced reworking, streamlined processes and deliver sophisticated costing and performance information.
“However, ERP systems have been mainly developed to serve the manufacturing and logistics sectors and the specialist nature of housing providers means that they need massive investment in order to deliver the complex and detailed processes found in this sector. In the current financial climate, it is unlikely that many housing providers will invest in expensive ERP solutions when a better cost/benefit balance could be achieved through a specialist HMS which incorporates many of the desirable features of ERP systems but in a form more appropriate for scale and manageability.”
The effects of universal credit, welfare reform and pay-to-stay
In previous articles in Housing Technology, we looked at the likely effect on housing providers’ IT systems of the introduction of universal credit, welfare reform and pay-to-stay. In general terms, most of the effects seemed to be more about rethinking processes, data changes and how IT systems would be used rather than any functional IT changes. Does the same apply to HMS?
Civica’s Hewitt said, “When addressing areas such as universal credit, welfare reform and pay-to-stay, HMS suppliers are likely to strengthen the income recovery areas of their systems. Incorporating much stronger debt profiling and collection capabilities, along with facilities to support tenants with debt management, will allow them to stay ahead of the curve. Much more information on ‘the person’ will be incorporated into systems so that housing providers can keep an eye on their tenants, including detailed personal profiles and financial information.
“Furthermore, the mobility of systems will become much more important in order to support more ‘on the ground’ working and to allow estates officers to get closer to tenants by having access to the same systems and information when face-to-face as when in the office.”
McLaughlin from MIS-AMS said, “We have evaluated our HMS against universal credit, welfare reform and pay-to-stay. Based on the government’s existing requirements, our system can handle all of them and there is no need to change the product at all. Having seen recent articles in Housing Technology, I know this isn’t true for other HMS suppliers, especially regarding pay-to-stay.”
HMS market volatility & liquidity
Given the long replacement lifecycles of HMS and the highly-strategic nature of their implementation, some people believe that the HMS market lacks volatility and liquidity. Or to put it another way, are there enough customers to match the number of HMS suppliers?
Civica’s Hewitt said, “The availability of new solutions, and the need to adopt new technologies to support efficiency savings as a result of budgetary cuts, is driving the housing market like never before. Social housing organisations don’t just want to review the systems they are using but need to review their systems to respond to the pressures of efficiency savings, customer demands, budgetary constraints and new ways of working.”
Last word goes to McLaughlin from MIS-AMS who said, “At the moment, there are enough customers to match the number of HMS suppliers; after all, there are around 1,700 housing providers and only about 10 main HMS suppliers. However, if the trend for housing mergers becomes more prominent, I think this may become harder for certain suppliers over time.”
Housing Technology would like to thank Jeff Hewitt (Civica), Martin Nowak (Horton Housing Association) and Chris McLaughlin (MIS-AMS) for their editorial contributions to this article.