Housing Technology interviewed housing and software development experts from Asprey Solutions, FLS – Fast Lean Smart, Infinity Group, Totalmobile and Voicescape about the respective merits of in-house software development and external IT development.
How do you choose?
Totalmobile’s managing director for property & facilities management, David Webb, said, “The main criteria for determining in-house development vs. external software and developers typically revolve around expertise, scalability and cost-effectiveness.
“Housing providers need to consider whether they have the specialised skills and resources in-house to develop and maintain complex software solutions. They also need to assess the scalability of their in-house team to meet evolving needs. Finally, cost-effectiveness plays a significant role because outsourcing software development can often be more financially viable than maintaining an internal team.”
Voicescape’s technical director, Steven Skarratt, said, “You first need to ask yourself whether you have the in-house capabilities to manage a software development project. If you opt for the internal route, it’s important to consider the processes and infrastructure needed to make sure the solution is developed in an appropriate and secure manner. Once it’s built, you then have the task of hosting it, with consequent cost and logistical implications.
“Many housing providers will already host their own virtual environments but are they experts in software development? These are all important aspects to consider because software development is complex and time-consuming as well as expensive if done wrong.
“Furthermore, once your solution is live, you will need a team of developers to maintain the solution, stay in line with data standards and comply with evolving regulatory requirements while keeping ahead of potential cyber and security risks. It’s a full-time job and the cost implications of that need to be considered.”
Infinity Group’s head of housing operations, Sarah McRow, said, “We’ve seen many implementations that have been heavily ‘bespoked’ (either internally or externally) yet we’ve never encountered a customer who is entirely happy with the result.
“There are a few reasons for this. Firstly, organisations adopting this approach tend to over-engineer the processes by trying to consider every business case. This typically leads to end-users reverting to simpler methods (such as Excel) to manage the process because the custom-developed solution is too complicated.
“Secondly, custom solutions tend to carry the stamp of whoever developed them, to the extent that the next team or person coming along to take over the code has the invidious job of wading through what has been developed to make changes. This can be incredibly time-consuming and can result in code having to be re-written; our developers refer to this sort of verbose code as ‘technical spaghetti’ and dread having to decode it.
“Lastly, custom development can lead to coding ‘cul-de-sacs’. This is where the implementation team has agreed the requirements and the components that comprise the solution and have started development, only to hit an unforeseen technical limitation which means all developments need to be unpicked and started again.”
Asprey Solutions’ sales and marketing director, Rachel Ratty, said, “There’s been a surge of interest in Microsoft Dynamics as a replacement for housing providers’ core business applications, leading some people to think that replicating and enhancing their existing applications’ functionality is a straightforward task. While this approach may seem to offer wider development options, from a commercial perspective there are several areas to consider when deciding whether to make or buy.
“Firstly, the risk of successful completion may have already been mitigated by external suppliers or developers. Secondly, the development costs, which are normally incurred by external suppliers and spread across their customers, now fall solely on the housing provider developing the bespoke system. Thirdly, recruiting and maintaining a skilled development team can be expensive.”
Sticking to core competencies
Voicescape’s Skarratt said, “Software companies are clearly experts in their respective fields and will already have their own processes and infrastructure, such as testing and QA methodologies, to ensure that their products are fit for purpose and meet the right security standards.
“The right technology partner will factor in a housing provider’s present needs and align with their strategic objectives while also keeping an eye on the future, whereas if you develop something internally, you might only be basing the solution on what you need today. Specialist developers will have a broader view, bringing a different perspective to the solution and combining it with experience of creating solutions that serve the needs of many but are customisable.”
Asprey’s Ratty said, “Maintaining a focus on core competencies is a fundamental principle for any business, and the idea of ‘sticking to the knitting’ is a well-established adage. Housing providers excel in property management, building maintenance and creating secure living spaces for their tenants; this focus doesn’t preclude them from leveraging proven software solutions to augment their operations.”
Totalmobile’s Webb said, “While housing providers have valuable insights into their operational needs, software development is a specialised skill that might not align with housing providers’ core capabilities. By focusing on their primary goals of providing quality housing and services, housing providers can leverage external software developed by experts to streamline their operations more effectively.
“Working with a software provider allows housing providers to get the best of both worlds; they understand their operational needs and provide tailored solutions to meet those needs. This collaborative approach enables housing providers to benefit from the expertise of software developers while maintaining their focus on delivering excellent housing services.”
Managing software lifecycles
Jeremy Squire, the UK managing director of FLS – Fast Lean Smart, said, “There is an argument for external software specialists to manage software lifecycles and licenses, being more aware of external market pressures and new solutions on the horizon, with internal housing IT teams feeding into that process.
“During the initial phases of software planning, external specialists can work in partnership with internal teams. This is often alongside stakeholders, such as residents’ groups, to collect the software requirements and develop roadmaps. Managing software lifecycles is often a partnership but one where external software specialists are well positioned to take the lead.”
Asprey’s Ratty said, “Based on our experience, managing software lifecycles is unlikely to be the most cost-effective option for housing providers. For example, in our realm of asset management, a significant proportion of support enquiries revolves around refining business processes and interpreting data and outcomes. Establishing an internal IT department capable of addressing these needs would require not only the development of technical capabilities but also the cultivation of consultancy expertise in asset management.
“However, this doesn’t discount the involvement of product users or buyers’ IT departments in the product lifecycle of external providers. These stakeholders often contribute to gathering functional requirements and offering feedback and suggestions for improvements.”
Totalmobile’s Webb said, “Managing software lifecycles requires a deep understanding and many years’ experience of development, testing, deployment and maintenance processes. While housing providers may have some capacity to manage software lifecycles, relying on external software providers lets them tap into the expertise of dedicated teams with extensive experience in managing complex software solutions over their entire lifespans.”
More open APIs
FLS’s Squire said, “In the ever-evolving realm of digital transformation, housing providers must decide whether to buy software which offers API integrations and faster implementation or build their own bespoke solutions.
“More open APIs (as opposed to private APIs) to give in-house developers access to software applications or web services might, at first glance, make in-house development more appealing, but functionality and security could both be diminished by using external interfaces.”
Asprey’s Ratty said, “The wider availability of open APIs could make in-house development more common but it would also make systems integration simpler using third-party systems where the in-house development risks and costs are avoided.”
Voicescape’s Skarratt said, “Having more open APIs will probably make in-house development more attractive, but whether it’s more realistic is a different matter.
“There is certainly a strong argument for open integration, making it easier for suppliers to work with one another. For example, in healthcare, open integration is essential and there are rigorous standards; if you don’t meet those requirements, you simply don’t get to tender for the work.”
Functional advantages
Infinity Group’s McRow said, “From a functional perspective, look at off-the-shelf products which are modular and have modules that meet the requirements of your business, then make sure that the product being reviewed is flexible in terms of how it can be further configured.
“For example, rent accounting and repairs are both complicated processes so there’s little benefit for any housing provider to develop them from scratch. An off-the-shelf product with the functionality that gets you to 70-80 per cent of where you want to be combined with tools that can allow further bespoking is far better than a custom-developed solution or an inflexible legacy system.”
FLS’s Squire said, “In-house software development is associated with benefits such as ease of communication and better cultural fit, so the functional advantages could include faster fixes and software changes, with internal teams readily available for technical assistance.
“However, external teams have wider knowledge, in housing expertise and beyond, with the resources to put together a tailored technology stack quickly, speeding up software launches. External software providers can also streamline processes by providing proofs of concept and monitoring progress with regular testing.”
Totalmobile’s Webb said, “External solutions often offer a range of functional advantages, including specialised features, ongoing updates and integration with other systems. However, they may lack the customisation available with in-house development, potentially limiting their flexibility to meet very specific requirements.”
Voicescape’s Skarratt said, “The advantage of doing it in-house is all about control; in theory, you get exactly what you want, a solution that perfectly meets the brief, but is that enough?
“When regulations change or when new technologies come along, do you have the skills and capabilities to deal with them? It’s essential to future-proof the technology in order to avoid expensive redevelopment. As such, you must have a fully-functioning research and development team that is always trying to stay ahead of the curve.
“If you decide to use external IT resources, thorough due diligence is vital. Make sure you understand the external provider’s development roadmap and ensure they’re aligned with your strategic goals and cultural values. You need to be confident that they’re willing to go on the development journey with you and create a two-way relationship where solutions are designed and developed as you grow and your circumstances change.”
Financial gains
Infinity Group’s McRow said, “Adopting a half-way-house approach, with out-of-the-box modules combined with either internal or external development dramatically reduces the time needed to get a system installed and working.
“For example, one of our customers, North Star Housing, went live with the first phase of a housing management system replacement in eight weeks, including data migration, installation and training. If North Star Housing had developed the process from scratch, it would have taken at least four times as long.”
FLS’s Squire said, “Housing providers should balance the cost of each approach with their respective potential for innovation. In-house development might require more upfront investment, whereas outsourcing can reduce the need for significant upfront investment in recruitment and training, especially for one-off projects or for housing providers with limited budgets.
“External off-the-shelf software has had a huge amount of development invested in it, using many more resources than any individual housing provider could justify on its own. The products will have already been tested and proven, ensuring deployment is quick and low risk, and will improve over time with updates requested by a variety of customers, some in housing and some from other related sectors, bringing the richness of best-of-breed software.”
Totalmobile’s Webb said, “In-house software development can demand significant upfront costs for hiring and training staff as well as ongoing expenses for maintenance and support. External solutions typically involve subscription or licensing fees, which may be more predictable and scalable, offering a potentially lower total cost of ownership over time.”
Technical choices & staffing
Asprey’s Ratty said, “When it comes to recruiting innovative software developers, commercially-driven software providers often have the upper hand unless a housing provider can offer premium salaries and a clear career progression path.
“External suppliers benefit from their ability to attract exceptional young talent into their existing teams. Conversely, immature in-house development teams require seasoned recruits, raising questions about the future trajectory for these mature in-house teams.”
FLS’s Squire said, “The technical advantages of in-house software include greater control of data security and intellectual property as well as compliance with regulatory standards, while the advantages of external software include service-level guarantees and faster scalability.
“At FLS – Fast Lean Smart, as our name suggests, we focus on being agile and adaptable. By not carrying the full burden of maintaining a large IT staff, housing providers can be more flexible, scaling their operations up or down as needed.
“Choosing a specialist developer means getting a best-of-breed solution. Housing providers benefit from faster and easier deployments, lower upfront and ongoing costs, and the ability to leverage software improvements immediately.”
Voicescape’s Skarratt said, “External developers will naturally work for a number of customers, with any enhancements or new modules created for one housing provider ultimately benefitting other housing customers down the line as the technology is further refined and improved.”
“In-house developers are unlikely to have the same ability and resources to respond and react in the same way, but they will have a better grasp of in-house processes, data, staff, properties and tenant, so it’s all about collaboration.”
Housing Technology would like to thank Rachel Ratty (Asprey Solutions), Jeremy Squire (FLS – Fast Lean Smart), Sarah McRow (Infinity Group), David Webb (Totalmobile) and Steven Skarratt (Voicescape) for their editorial contribution to this article.
