The digital transformation of Housing Associations
Housing Associations face a challenging and competitive future; a shortage of housing supply, more stringent regulatory requirements for the estates they manage and reducing subsidies from government to bolster social housing incomes. This all means margins are being squeezed, whilst the needs and expectations of their increasingly digitally savvy residents are becoming ever more sophisticated. As last year’s Housing Governance report by Grant Thornton outlines, this leaves many Associations with some stark choices: cancelling or postponing development plans, streamlining front-office functions, or changing loan repayment terms. However, increasingly a more palatable route is being explored - the digitisation of key products and services to increase operational efficiency, as well as improving the experience of its customers.
However, when it comes to digital adoption, many Housing Associations are behind the curve. Ad hoc growth and the merging of several legacy systems mean that technology being employed is often fragmented and processes laboured. Customers still fill in paper application forms, the data from which is inputted into a siloed system before it is manually assessed for eligibility. Once on board, almost all of the contact between the HA and the customer is via telephone or email. In general, there is minimal use of digital technology in updating the status of queries or proactively communicating with customers.
Digital adoption rates are slow for a number reasons – constraints on budget, the internal structure of the organisation dominated by siloed departments, stakeholders clinging on to old ways of working and a general reluctance to embrace new technology are just some of the obstacles HAs are grappling with.
Yet, digital technologies are here, and HAs can’t ignore the turning tide. Today’s consumers want better customer service from which ever brand, company or institution they are dealing with. Research by Forrester found that 71% of those surveyed said the most important thing a company can do for them is provide good customer service. These same customers want companies to provide them with information in one click, which is also fuelling the ‘one and done’ trend – i.e. people want to avoid time wasting and repeating tasks (such as answering the same questions in multiple forms). In addition, in our fast-paced 24/7 world many customer transactions and complaints are taking place outside office hours, which is leading to a demand in self-serve options.
The Government’s own ‘Digital by Default’ campaign is spearheading a cost-saving drive across all its departments. It believes it will save £1.8billion a year by going digital. In the recent Digital Efficiency report it found that transactions conducted online can be 20 times cheaper than by phone, 30 times cheaper than by post and as much as 50 times cheaper than face-to-face. This cost-saving initiative is forcing HAs to improve the efficiency in their operations too, so they can accommodate the Government’s mandatory rent freeze on social housing.
By digitising the customer journey, and allowing customers to self-serve online, HAs can reduce their ongoing operational costs and will enhance their customer experience. An example of how digital tools improve efficiency can be found in re-evaluating the role of the Neighbourhood Housing Officer (NHO). Currently, much of an NHO’s time is spent on non-customer facing activities and travelling between jobs. Only a small proportion of it is spent actively managing the assets and acquiring new tenants. The remainder is consumed in responsive activities. Introducing digital technology can allow NHOs to log issues and incidents remotely, which will free them up to manage their own properties/estates and will allow them to be more customer facing. Plus, digital can give them the flexibility of remote working, which will reduce their travel time at the same time as reducing the cost to the business (an example of this in action is cited below).
So how are Housing Associations across the UK currently embracing digital?
Here are three examples of HAs using digital to enhance the customer journey, reduce costs and improve efficiency.
Birmingham City Council has looked at its customer journey and identified how to direct people appropriately into online self-service. Its tenants now get a personalised digital log book, as well as an individual tenant digital portal. As a result, 97% of tenants now complete forms online. Three quarters of prospective tenants self-serve by registering their details online. Birmingham CC has also managed to reduce rent arrears by £134k.
Bristol City Council has used digital technology to take 60 of its Neighbourhood Managers out of the office and make them completely mobile. Aided by tablets, they now log all incidents and issues remotely. The facilities reduction programme is set to save £10million during the next three years.
Croydon London Borough Council’s programme, “Digital and Enabling”, is set to deliver a £20 million saving by 2017-18. Customers now use digital to apply, book, pay and report. Most importantly, customers are only asked once for basic information.
Suggestions of how digitisation can improve HAs in other ways
Incorporating digital technologies into HAs can have a positive impact on both the internal operations and the customer experience. Here are some ways how:
Building Infrastructure: Having a mobile, digitally enabled workforce reduces or removes the need for physical neighbourhood locations, reducing building costs.
Neighbourhoods: Mobile, connected workers, dealing with those that need help the most and exceptions rather than transactions, enables the organisation to become ‘more human’.
Organisation and Process: By removing paperwork and automating manual processes will free up resources for employees to undertake other work.
Service Centre: Having a mix of homeworkers and office based staff means HAs can manage a mixed/blend of channels (phone/email/chat/social media) and complex enquiries, or queries from customers who do not wish to self-serve.
Digital transformation is a significant enterprise for any organisation, but it will be critical in helping HAs deal with what are deep industry-wide challenges. To succeed in the current environment it’s crucial that they develop business cases that prioritise digital products and services, which will maximise business impact and value.
Huge cost pressure within the industry means HAs need to spend wisely. Therefore technology decisions should consider future initiatives and functionality, whilst building on platforms and systems that offer flexibility and scalability. To ensure this, broad stakeholder engagement and buy-in from across the organisation is essential, from senior executives to technical experts and those working with residents in neighbourhoods themselves.
Customer adoption is a key driver for the success of the business case. HAs should therefore put customers front and centre of experience design to ensure adoption. Digital products and services will only be used if they meet real needs and are easier to use than other options such as calling customer services.