Mergers and partnerships in social housing have been gathering pace as a growing number of housing providers look for M&A benefits such as efficiency savings and economies of scale, making housing more affordable, and creating opportunities to build more new homes. Following the success of the mergers and partnerships presentation at the Housing Technology 2019 conference earlier this month, presenter, Claire Lea, a senior consultant at Sovereign Business Integration Group, shares her experience of the role of IT in this process and how it is often forgotten.
Common activities in a merger or partnership
When an organisation has announced a merger with a fellow organisation, there are the initial activities such as press releases, industry interest, new branding, customer information packs, relaunching joint objectives and the development of mission statements and objectives. Then follows the HR activity covering new or amended contracts, office location decisions, policy and process adoption, and perhaps a full restructure.
After this, the work begins and this is often when an organisation will start to see the IT integration problems begin to pour in. How do you report an IT issue (now that the ‘old’ team doesn’t exist)? How do you access details of a tenant, building or service that isn’t on ‘your’ system? Why doesn’t the mobile app work for everyone? Organisation ‘one’ uses online forms and tasks for workflow but the systems of organisation ‘two’ don’t support that.
All common scenarios, especially within the public and housing sectors. The problem? The IT in the merger hasn’t been mapped out or planned regarding how the two organisations will blend their IT. But why?
Integrating the IT
There have been over 170 mergers in the housing sector during the past five years, with 42 mergers in 2018 alone. Analysis of the housing sectors and informal discussions both point at reduced funding and a need to become a more streamlined, efficient and effective organisation as being the main drivers for merger activities.
The desire to take advantage of new technology and software capabilities is a contributory factor and yet more often than not, they have not involved the two organisations’ respective IT teams (at either executive or operational levels) or developed technology strategies at the early stages of the overall process. This has left the newly-merged organisation trying to implement new systems, software and ways of working alongside the more high-profile work areas associated with a merger (new names, contracts, logos, office location, board members and so on, as mentioned earlier).
We all recognise that mergers are neither easy nor straightforward but considering the role of technology within the merger at the earliest stages can prevent additional stress and discomfort for all involved.
Start at the end and work backwards
While recommending that any merging housing providers involve their respective IT departments from the beginning, the starting point is actually at the end; defining what you want the blended IT infrastructure to look like. At the strategic decision-making level, be clear about what the end goal is for the newly-merged organisation. For example:
- Do you want one system and process for all staff or keep separate systems for particular elements of the work?
- If either or both of parties in the merger have a digital transformation project in progress or planned, can these be combined or do you need to start again?
- What about the customer journey – do either or both of the involved organisations use a web portal or have online self-service facilities? If so, will this be extended to all tenants of the new organisation, and would that fit in with the overall strategy?
Merger preparation programme
Rather than implementing a recovery programme to try and get back on track after falling foul of the aforementioned scenarios, consider using Sovereign’s tried-and-test five-step preparation programme instead:
- Communicate – Have strategic discussions around technology and how it can help the organisation in achieving its new goals. For example, what does the three, five and 10 year plan look like?
- Communicate again! – Understand the requirements at both a strategic and operational level. For example, the board and senior executives may want to provide 80 per cent of the newly-formed organisation’s services online, which means there will be a requirement for mobile working, with online forms feeding back into the main back-office systems; the end goal is the same but there are many different ways of getting.
- Identify what you have – Look at all of the systems and software already in use. Is the main HMS/ERP platform the same for each organisation, and if not, are they compatible or can you integrate (or migrate) from one to the other?
- Identify what you are missing – Analyse wht you have versus what you want, and remember to compare this to the overall strategy to ensure that you stay on the same path.
- Get a plan in place – Plan how you are going to get from where you are to where you want to be. This sounds obvious and it is, but it is so often forgotten, with the result that different elements each go off on their own journeys. Break it down into manageable tasks. For example, you know you want to use System A as the main HMS; what do you need to do to get both organisations there – data cleansing and migration, adjustment of codes to ensure compatibility, redirecting interfaces?
Making the transition seamless
It’s not just about the technical configuration of systems, it’s also about the conversation between those implementing the IT and those using it. Make sure you make IT part of your merger or partnership conversations early on; doing this will help your transition to be as seamless as possible.
We know you want your employees to be working well from day one and for your customers to only see the benefits of the merger; making sure IT is part of your plan will help you achieve that.
Claire Lea is a senior consultant at Sovereign Business Integration Group.