Regardless of the ruling party of the day, the government will continue to demand ‘more for less’ from housing providers. In this environment, the ability of asset management solutions to optimise housing providers’ asset portfolios will become increasingly important.
Systems supporting sound practices in data-driven decision-making are essential, but those systems must be capable of flexing with evolving needs. The choice of technology provider and solution are pivotal because both can help organisations respond to change and add value (financial, strategic and social) through their asset management practices.
Diverse options and advice
Today’s market presents a diverse array of options and advice, not all of it sound. Many procurement exercises (via expediency arguments) still demand a ‘single solution’ encompassing both housing and asset management. By contrast, there is considerable ‘buzz’ around ERP or leveraging Microsoft Dynamics, and some organisations even attempt bespoke development. These latter options are often driven by a combination of dissatisfaction with previous technology suppliers and the dwindling choice of suppliers (as a consequence of acquisitions by large housing system providers).
Housing providers encounter advocates for each option mentioned above, and several factors may influence their procurement approach, such as their relationship with current supplier(s), IT policy, economic position, historic policies and past experiences, over-riding the all-important emphasis on the business need, which is often only covered by simplistic tender questions relating to functionality rather than an analysis of emerging business needs in the housing sector. Often, it’s not more functionality that’s needed but more robust coverage of traditional functionalities and processes.
Asset & finance mismatch
Historically, there has been a mismatch between asset management systems’ outputs and the finance department budgets and investment policies they could feed. This widely-accepted mismatch has masked the shortfalls of both asset management systems’ projections and spend indicators and finance departments’ budgets and investment choices.
Leading housing providers have recognised that the wider use of asset management data in building and appraising investment options and optimising asset management budgets is essential to sound asset custodianship. Robust asset management systems and knowledgeable suppliers are crucial to building knowledge and understanding in this new era.
An ‘expediency argued’ first step, such as a single solution, eliminates other options too early in the procurement process. If not focused on changing and intensifying business needs, it can lock an organisation into an expensive and unsuitable system and supplier as well as extended implementation timescales, when a rapid deployment of a reliable, future-proof system and the support of a knowledgeable supplier are today’s needs.
We advocate comprehensive procurement research, including a review of both existing and missing business processes, and we champion the unique benefits of best-of-breed solutions encompassing portfolio strategy, compliance and sound asset governance, with solid financial and strategic principles.
With modern APIs, interfacing technologies and integration practices, ‘talking’ to other systems is a given and the best-of-breed focus and lifecycle cost benefits of using smaller organisations are compelling arguments. Also bear in mind that independent best-of-breed suppliers don’t have their fee levels driven by the overheads and profit demands of larger parent organisations.
Our rationale is simple, so let’s consider the options.
Single-solution theory
A single-solution focus is often driven by the imagined financial, data and administrative economies of a one-stop shop, with theoretical leveraged purchasing power with a single provider through supplier reduction.
Supply-base reduction is a commonly-espoused economic theory that can reduce costs but successful examples are in production rather than service organisations, and pale into insignificance against the supplier power wielded by the larger business-critical system suppliers in our sector.
A more pertinent goal is to be prepared for the business-side challenges of asset management: improve decision-making; invest properly; reduce cost wastage; optimise works; create insightful, timely and reliable information; and gain an accurate view of each asset. These challenges demand working with the best, most flexible and expert suppliers with proven commercial solutions.
Make or buy?
Commercially-proven solutions and suppliers don’t have the significant costs and risks of bespoke development, nor the level of cost and risk associated with the design, delivery and future management of ERP solutions.
Developing a system from scratch is complex and time-consuming, whether applied to traditional bespoke development or leveraging generic platforms (e.g. Microsoft Dynamics) with their requirement for bespoke configuration, often with a heavy reliance on external consultancy and escalating project complexity and costs, without a guarantee of successful completion or ongoing independence (thereby contravening a key ‘make or buy’ argument).
Even single-solution systems, such as best-of-breed, are already commercially proven and allow for easier and faster implementations and lower switch-over risks.
Continued innovation
To some extent, all technology suppliers aim for on-going innovation in their solutions, but we believe that best-of-breed suppliers have a particular advantage in this area.
Asset management is their entire focus area. Their knowledge and experience stems from both product R&D and intensive advisory work over many years of optimising data and processes for their customers. Best-of-breed solutions have been researched and built at the cost of the supplier; by contrast, ERP solutions are built at each of their customers’ cost.
Best-of-breed targets
The pursuit of solutions that align with a housing provider’s strategic and financial objectives, as well as tenant safety and satisfaction, is paramount. This demands the continuous evaluation of evolving needs and opportunities; an area that requires intensive advisory and consultancy exposure by the supplier.
Best-of-breed solutions stand out in this environment because of their specialised focus, offering several advantages essential to staying relevant:
- Specialisation – Excellent data- and BI-based systems and consultants addressing adding value through asset management, from portfolio optimisation to the optimisation of all associated investments.
- Flexibility – The dynamic environment, evolving regulations, standards and societal expectations demand adaptable solutions. Best-of-breed suppliers offer flexibility as their core focus.
- Expertise – Leading providers possess unparalleled expertise and understanding of asset and data management, extending beyond mere software provision into valuable insights regarding best practices and process optimisation.
- Innovation – R&D efforts are vital to the continuing existence of the best-of-breed supplier, as evidenced by the range of solutions, their currency and innovations.
- Customer-centric support – With a more focused product range, they offer personalised support, advice and consultancy, ensuring solutions continually evolve in alignment with market needs for their customers.
The integration question
Integrating systems hinges on achieving single data entry, establishing a reliable central data repository and supplying prompt, pertinent information, with assured data integrity. Reputable solution providers offer a comprehensive suite of APIs and consulting services to develop well-rounded solutions that meet these exacting criteria.
Leading best-of-breed suppliers are adept at guiding organisations throughout the procurement process, ensuring that solutions not only address their immediate needs but are sustainable over the long term.
Ensuring an organisation’s ability to thrive in our demanding sector by working with the most competent suppliers builds in long-term added value; that shouldn’t be sacrificed for a simpler supplier landscape or the illusion of independence.
Rachel Ratty is the sales and marketing director for Asprey Solutions.
