It’s fair to say that from an IT systems’ perspective, the housing sector is at a crossroads in terms of how it deals with the challenges of mobile, digital, data management and, most recently, capabilities such as AI and IoT.
Meanwhile, the IT procurement history in the sector has been predominantly ‘best of breed’ acquisitions, mainly because the traditional housing system vendors were focused on their core systems, with a policy of partnering with other suppliers to fill in any gaps; at the beginning finance, asset management and scheduling, then latterly mobility.
Best-of-breed and niche suppliers
This spawned a plethora of niche providers of specific functionalities and those same main vendors then recognised that those niche providers were driving changes in buying behaviours and that customers wanted a broader range of capabilities. This led many big vendors acquiring those niche providers, thus further complicating the purchasing decisions for their customers.
At the same time, these main vendors were recognising, albeit very slowly, that their core systems were lagging behind and required modernisation to meet the need for digital, mobility and data integration. This resulted in huge investments, although the vendors adopted different approaches, ranging from adding new and improved functionalities and better integration capabilities through to new systems being entirely redesigned from the ground up.
Many housing providers are broadening their activities into other areas, such as commercial activities and off-site property manufacturing. At the same time, mergers between housing providers are creating businesses of increasing size and complexity. Add in the ‘digital agenda’ along with service integration, process automation and increased regulation, and it’s no wonder that housing providers will be reviewing their current systems’ portfolios.
How to go about making these solution decisions is an article in its own right, but it’s certainly not straightforward with such a confusing landscape in front of us.
It does beg the question; could today’s smorgasbord of vendors’ solution have been averted? Do we believe that it’s about the survival of the fittest and we simply have to wait for the outcome of a long and painful consolidation and rationalisation process?
No standard methodology
The next question is then whether those suppliers will have the firepower to deal with the implementation and migration issues because there won’t be a ‘standard methodology’, driven again by that model where the systems’ ‘patchwork quilts’ are rarely of the same pattern. At this point, management consultant Peter Drucker’s famous adage rings as true today as ever: “The greatest danger in times of turbulence is not the turbulence, it is to act with yesterday’s logic.”
What could be done differently? Is there an alternative way of behaving that genuinely puts the customer at the heart of our thinking, such as transformational decisions being facilitated through housing providers working together to apply pressure on solution providers, or solution providers working together to deliver more joined-up architectures? Or perhaps an arrangement that sees economies of scale, with risks and rewards being shared, and power residing equally across all parties?
Imagine a world in which housing providers have proper strategic relationships and the vendors wanted them as well… and actually listened to their customers, where housing providers collaborate with each other to work in partnership with the vendors. Unreasonable, unlikely or absolutely necessary?
The collective impact (CI) concept was originally coined by the Foundation Strategy Group (FSG). This suggested that organisations that are all working toward common social outcomes can achieve a more significant, positive and sustainable impact if they work together rather than in their separate silos… probably obvious, but worth stating nevertheless.
FSG identified five common components for organisations engaged in social change initiatives: a common agenda; shared measurements; mutually reinforcing activities; continuous communications; and the support of a ‘backbone’ organisation.
Bridging the gap
Understanding these fundamental CI components and achieving positive changes as a result can be a big gap to bridge for a variety of reasons. A key element in driving this success is the ability for the participating organisations to evolve their cultures in order to develop a new way of collectively engaging with each other.
The participating organisations must share a common agenda for reform, be willing to engage in mutually reinforcing activities, and collaborate with a range of other public, private, regulatory and community organisations with overlapping interests. This can be a challenge when those organisations have a history of competing against each other for funding and, in some cases, for populations to serve.
Implementing the kind of cultural change needed by organisations participating in a CI initiative would demand a well-executed change management process. In order for CI’s five foundational components to add value in terms of collective gains, each member of the collective must adapt the way they run their business in potentially fundamental ways, probably in turn rubbing against the existing beliefs and assumptions people have used as a guide for their work for a long time.
Profit vs. not-for-profit
Of course, there are two competing dynamics here because we’re talking about for-profit organisations collaborating in a not-for-profit sector, so while there will hopefully be common goals and values, the different commercial interests of the two perspectives must also be taken into account. I have avoided the use of ‘sides’ because that arguably reinforces the ‘them and us’ approach which has often acted as a barrier to meaningful collaborations.
Why would housing providers decide to collaborate in this way? Speed of delivery, economies of scale, new engagement models, standardisation, cost, interoperability, risk mitigation, doing the right thing are perhaps just some of the reasons.
There will be winners and losers, but the ultimate beneficiaries should be the tenants. In the meantime, do we really feel comfortable with the continuing state of affairs, where hundreds of millions of pounds of public funds are being spent to deal with an important issue that could have been dealt with in a very different way, and yet could still be?
Do we have the collective determination, will and belief to take a different approach, forge a new path and be stronger together?
Martin Joy is a director of Itica.