Housing Technology interviewed Civica’s managing director for housing and asset management, Jeff Hewitt, and Orchard’s marketing officer, Craig Tither, about recent changes to housing providers’ financial management systems, ERP systems vs. dedicated housing applications, and the move towards web- and app-based systems.
How do today’s financial management systems (FMS) differ to those from five years’ ago?
Jeff Hewitt, managing director for housing and asset Management, Civica, said, “Over the past five years, financial management solutions have progressed from back-office solutions focused on inputting and processing financial data to become much more intuitive, enabling a wider range of users to access the information. This is crucial today because critical business decisions are made daily through the analysis of readily available and real-time data. In light of this, although data input still remains important, there is more emphasis on the ability to analyse data quickly, effectively and accurately.”
Craig Tither, marketing officer, Orchard, said, “Financial management systems have evolved; due to changes in technology and working practices, they are now cloud-based and can be accessed anywhere and on any device. Today’s FMS enhances reporting flexibility and efficiency, streamlines business processes, offers a more complete suite of modules for more extensive functionality, and provides better integration with other systems.”
What should housing providers look for when selecting a new FMS?
Tither said, “Selecting an efficient and knowledgeable delivery partner should be at the heart of any business-critical decision-making process. For example, with Orchard, you don’t just get a finance system, we also have a team of sector-specific specialists who understand housing providers’ key business requirements. And part of the selection process should also take into account the product roadmap and financial stability of the proposed partner.”
Hewitt said, “Housing providers need to look for a system that’s easy to use, manage and maintain and is quick to deploy. Decision makers shouldn’t be constrained by the tried and tested suppliers and should embrace new solutions from any supplier with a track record in other areas of the housing sector. If there is a compelling reason to change, then decision makers should be clear on their objectives and seek partners to deliver results, even where exact fits don’t exist.
What are the advantages and disadvantages of an FMS vs. an ERP system and/or a housing management system with integrated finance functionalities?
Hewitt continued, “While an ERP system can provide a single platform for managing a business, fitting a generic ERP within a specialist sector such as social housing has proven to be inefficient and expensive. To meet the complexity of the housing market, business leaders should look at specialist platforms with joined-up housing, finance, HR and payroll functions, therefore providing all the features of an ERP but within a cost-effective, specialist platform.
“Housing management systems with integrated finance functionalities can be an excellent choice in terms of the level of inherent integration but decision makers need to be sure that the breadth of functionality is not compromised with a bolt-on FMS.”
Tither added, “You just don’t need to compromise, with best-of-breed housing and financial solutions, delivered by a dedicated housing IT supplier to ensure joined-up working practices.”
What is the likely impact on FMS resulting from things such as universal credit, welfare reform and pay-to-stay?
Hewitt said, “Housing providers will want to identify where they can best direct their resources, so an FMS will need to collect costs more accurately and effectively, allowing housing providers to make business decisions based on real facts around expenditure. Income collection is becoming more important and while this is traditionally driven by the housing management system, the FMS will play a key role in ensuring that organisations are acting on the most up-to-date information.”
Tither added, “In our view, developments such as universal credit and pay-to-stay will affect housing management systems much more than the finance function. Housing providers can certainly expect more tenants in arrears, more complicated cases to manage and more uncertainty around revenues. Combine this with the new pay-to-stay legislation and all of this means one thing from a systems point of view; more data has to be managed and more processing activity has to happen to achieve the same outcomes as before. The level of customer engagement and associated customer data has to increase and this ultimately falls within the remit of housing management systems to support.”
How volatile/liquid is the market for FMS, given the long replacement lifecycles?
Tither said, “The choice is limited because there aren’t as many good FMS suppliers as you might think; nearly everyone has an FMS but that doesn’t mean that they’re any good. At the same time, the historic stagnation of the FMS market is being challenged by more forward-thinking organisations.”
Hewitt added, “We expect to see more churn in the market due to rising expectations around app-driven systems, meaning that many organisations will be taking advantage of the opportunities that new web-based systems offer”
What will FMS look like in five years’ time?
Hewitt concluded, “The market is now moving towards more convenient and easy-to-use app-style FMS which will be available as cloud-based services. These apps will allow data to be accessed at any time and from anywhere. What’s more, this data will become much more integrated; for example, stock and personnel data will combine with financial information to give a much richer single set of data, allowing greater and deeper overall analysis.”