Housing Technology interviewed Stephen Makin, managing director of Aareon UK, about the specialist nature of many IT suppliers, the future of joined up technologies and how regulators and housing providers could benefit from IT suppliers’ front-line experience.
Given the size of the UK social housing sector, are there too many or too few IT suppliers covering this sector?
Given that the UK social housing sector is a relatively small vertical market in terms of IT revenues, I think there are too many IT suppliers, but I would say that, wouldn’t I?
On the face of it, you might expect that this would be a good thing for housing providers as it has led to a very competitive market for IT solutions and services, but I think that it can also have a detrimental effect. System costs are much lower than before and maintenance and service revenues are now split among tens of suppliers so that fewer revenues are available to each supplier for reinvestment in research and development.
Unlike most other sectors, few if any of the large business application vendors, such as SAP, Microsoft or IBM, seem to be focusing on housing – why do you think this is?
I think it’s the specialist nature of the functionality that is needed by the housing sector, particularly in the UK, whereas companies such as Oracle, SAP and IBM are interested in supplying globally or at least in supplying software with the same functions in many countries.
We saw that proved in the 1990s when many companies like Oracle sold the applications that it considered country-specific, often to management buyouts and often to the very teams of people they had purchased the systems from in the 1980s. What they had tried to do was to make these products international, only to find that for some sectors, different countries have different functional requirements and that without major developments they just wouldn’t sell.
For example, in many European countries rent is treated simply as a standard invoice in the finance system with no specialist features. However, it’s not that simple in the UK and all of the successful social housing software vendors have specialist rent modules with complex functionality developed over many years.
Do housing providers have different characteristics to other similar-sized companies in the private sector?
As a very general answer, I would say that survey after survey has shown that IT spending relative to revenues is much lower in this sector compared with many others – I have seen some surveys that suggest that the ratio is sometimes as low as one per cent.
In some organisations, there is not enough knowledge or interest shown in the IT systems from senior management, although this is changing fast as organisations realise that the IT systems are a controlling factor in their business for everything from bringing in the revenues and managing and optimising their assets, to all the contact they have with their tenants and residents.
For a typical mid- to large-sized housing provider, what are the respective advantages and disadvantages of implementing a single suite of business applications or modules from a single supplier vs. a best-of-breed approach involving many suppliers?
It depends if the single suite of business applications is truly integrated or if they just happen to be the products supplied by that supplier, often acquired from several different companies over the years.
If they are a truly integrated – i.e. in a single database with only one source of tables for shared information between all of the applications – then you should get what is often referred to as ‘one version of the truth’ and the effect of actions in any of the applications are instantly reflected in all parts of the system.
However, in a best-of-breed implementation you have the advantage of picking each product which is a leader in its class, which usually means having the required functionality for the sector, but this advantage is often offset by the need for multiple and complex interfaces.
What we have tried to do at Aareon is combine the best of both, having truly integrated products in our QL range backed by sector-leading products for areas we don’t address, all supplied under a single contract.
What is your opinion of the IT suppliers in housing – what do they do well and what could they do better?
I think we all supply products that have a very high standard of functionality and a matching level of services to back them up. However, I do think that the IT suppliers as a group should interact better with the various legislative bodies within housing in order to provide feedback to them and our customers on some requirements which can sometime be a little ‘under-specified’ when released.
Is there anything that housing providers should do better when engaging with IT suppliers?
There needs to more interaction at differing levels between both organisations and between all the business areas covered by the organisation. As I mentioned earlier, IT encompasses and underpins all of the actions undertaken by a housing provider and should certainly not just be seen as the responsibility of the IT department – that’s neither fair to the IT department nor the wider organisation.
I also think that constant re-examination of how the software is configured and deployed and how the new features released within it are used is more than repaid in benefits to the organisation.
Which new technologies should housing providers’ IT departments be getting excited about, and why?
I don’t think it’s any individual technology – it’s all about the joining up of all kinds of technologies to enable services to be provided not only in innovative ways but also to previously impossible levels.
For example, a tenant comes home from working the early shift to find he has a problem with his guttering. He now has a choice of how he reports the problem to his housing provider – email, web, text, app or telephone.
He picks up the phone and is very impressed that the person answering knows it’s him before he speaks and also seems to have all the information about him instantly to hand. This encourages him not only to report the fault, for which she was able to immediately give him a time and date for the repairs, but to also ask about all the areas he has been meaning to enquire about.
She knew for instance that this is not the first time he has reported a problem with the guttering, she reminded him that the appointment for his gas servicing is in a week’s time and knew all about the earlier problem he had reported, now sorted out, concerning his neighbour not only keeping a dog not allowed in the tenants’ contract but one that barked all day when he was working nights.
She even was able to tell him that the problem of children being noisy in his road until the early hours had been reported by somebody else and was being dealt with, and he was not going to even talk about that.
Finally she had been able to take a payment from him for this month’s rent and assured him that this information would be updated to his housing officer’s tablet PC and therefore taken into consideration when the officer visits later that day to set up the agreement about his arrears.
He was even more impressed when half an hour later he received a text to say that if he was available, the appointment to fix the gutter could be moved forward by two hours. The workman explained that this was because not only was he in the area and his previous job had taken less time than scheduled, but they also knew he had the parts required in his van stock and therefore he had been sent this job on his PDA.
The workman however did not tidy up very well, but the tenant was amazed when he was contacted by the workman’s manager within 10 minutes of his departure. The manager explained that because the tenant had ticked ‘dissatisfied’ on the confidential questionnaire on the workman’s PDA when signing off the work, this had been picked up by a trigger in the database and a SMS text had been sent to the manager alerting him, despite the fact he was out of the office for the day.
Finally, just before the housing officer arrives, he emailed him to find out the level of his arrears and received an instant reply with the both the amount outstanding and details of all his past payments including the one made earlier that day.
It’s the coming together of technologies that enables this kind of service to be provided and that should be very exciting for all kinds of departments within housing providers.