The UK housing sector is stuck in a technology rut. Ubiquitous connectivity, machine learning and automation are transforming businesses across the economy. But social landlords remain wedded to systems which in too many areas have failed to move on.
Despite endless digital conferences and events there is little evidence housing providers are responding to the challenges and opportunities of a transformed technology landscape. At a time of increasingly tight finances, there is an urgent need to reinvent business models, levering the full potential of new technologies, advanced data analytics and new digitally enabled ways of working.
But too many housing businesses lack the skills and knowledge needed to transform themselves into digital-age businesses, particularly at a governance level. This represents a major unaddressed threat to the long-term success of the sector.
Over the coming week, I’ll be blogging about the reasons for that failure and setting out a manifesto for sector-wide change, explaining how housing businesses can really go digital in 2017.
Five big failure points
I’ll start by identifying the five big failure points in UK housing’s approach to technology.
1. Too often technology is seen as a service to the business and an operating cost to be managed rather than a key element of any business transformation strategy. As a consequence, core housing management systems have increasingly become commoditised, with little to differentiate them and a focus on lowest price rather than innovation. Businesses see IT as somehow separate from the business and “Digital” as largely to do with minor changes to sustain existing sub-optimal business processes – for instance channel shift and mobilisation of workforces – rather than a tool to enable more fundamental business reinvention.
2. This lack of competition and subsequent low level of pressure for business-focused innovation has led to an ecosystem with limited product differentiation, walled gardens and inaccessible APIs, at a time when the wider digital economy is moving in the opposite direction, and at speed. Technology providers are not incentivised to innovate by clients who have little understanding of what might be achievable, and as a consequence understandably seek to protect their business interests in other ways. This bring its own risk as inertia and long term revenue decline in the supplier market stalls innovation and threatens business sustainability.
3. The barriers to change are too high and opportunities to innovate too few. There are limited examples of housing providers being willing to practically explore radical approaches to managing their stock outside of conventional housing management system-driven paradigms. Where change is attempted, the focus tends to be towards making existing systems work slightly better rather than reinventing them from scratch. In other words, the disruption becoming commonplace across the wider digital economy is entirely missing from the housing sector. Both Board and Exec teams are seeking safety in speeding up delivery of digital strategies that embed existing business models, despite it already becoming clear that much more radical change in housing provider businesses is needed.
4. There is little or no understanding of current technology on most boards and senior executive teams. This can lead to a perception that technology is an area of risk and cost rather than opportunity; or alternatively, in the unquestioning acceptance of consultant-driven solutions that may not properly reflect long term business need. More generally, there is too often a lack of leadership expertise in either understanding or challenging the performance of existing technology investment; as well as a lack of appreciation of the potential of new solutions and approaches that might be out there. This is a major area of weakness for most housing providers which needs to be urgently addressed – later this week, I’ll be setting out how we might make a start on putting digital at the heart of housing provider governance.
5. Data ownership and governance are neglected issues across almost the entire housing sector. Poor data practices are endemic, with little understanding or ownership of data issues at strategic or working levels within many organisations. Lack of integration between systems, lack of access to effective analytic tools – and where they do exist, little opportunity to deploy them due to the poor quality of held data – stand in the way of any ambitions to turn UK housing providers into genuinely data driven businesses. This is something HACT is seeking to address with a consortium of forward thinking housing providers in its sector-wide data standards initiative, which builds on work that has already taken place in the Netherlands.
In my next blog tomorrow, I’ll be outlining the three major barriers to digital change in UK housing. In the meantime, if you’re interested in finding out more about HACT’s forthcoming work in this space, you can register your interest at email@example.com.