Housing Technology Performance Management Articles - Richard Bayley and Chris Coan

1. 20 | housing technology | performance management www.housing-technology.com
Business coordination
with performance
management
Richard Bayley, research & planning director, Places for People
If anyone thinks that the future housing business will be unaffected by Customer service sits over and above these performance responses,
structural changes in the economy and government policy then they not least because customer retention reduces the void turnover costs
are strongly advised to think again. Yes, there is and will continue to be incurred when people move on but also because it is a good measure
strong demand for housing, but anaemic economic growth means that of reputation for other stakeholders such as investors and regulators.
the government deficit is not reducing as quickly as planned and financial
Core business applications
institutions face a new wave of problems, even if a sustainable solution is
So how can performance management systems (PMS) help with
found for the Eurozone.
dealing with these issues? Essentially, the PMS strategy should
Historically, the housing sector’s response in times of recession is be to interact with and interrogate the plethora of core business
to increase the amount of rental properties on offer and keep the applications and databases.
rent increases at or slightly higher than RPI (retail price inflation).
In order to succeed, the PMS will increasingly need to integrate with
This time it is slightly different. A combination of more restricted
the core business applications as follows:
commercial lending by banks together with pressure on disposable
• Housing systems – more analysis of customer profile information for
incomes will mean that housing providers will have to manage their
targeted action plans to reduce arrears and void turnovers;
businesses more efficiently.
• Maintenance systems – greater focus on forward planning for non-
Business influences emergency responsive repairs in order to save procurement and
So what does this mean for the way housing providers are managed? travel costs;
In practical terms, it means that there needs to be greater focus • Mobile working – more use of tablet PCs for inputting and reporting
on monitoring business performance to ensure that year-on-year housing and repairs information;
efficiency improvements are achieved. The table below outlines some • Asset systems – more analysis of the profit and asset values from
performance risks facing housing providers together with some implementing planned and major repair programmes;
potential responses. • Finance and risk systems – greater focus on predicting the benefits
of taking proposed actions from financial and risk perspectives.
Performance risks Performance responses
In fact by integrating in these ways, the PMS provides enables a
Higher arrears due to reductions in Cash management balanced scorecard approach by delivering overall coordination from
government benefit payments top to bottom and across the different aspects and geographies of the
business, such as down to neighbourhood level.
Higher arrears due to lower growth in Cash management Quantitative & qualitative benefits
real disposable incomes for non-benefit Historically, the value of a PMS in the housing sector has tended to be
payment customers assessed in regulatory terms and not necessarily in overall business
Tighter corporate/mortgage lending Profit margins terms. Companies have often relied on pre-configured reporting from
pushing up real interest costs core business applications which not only then required manual
intervention to produce management information but also often
Higher growth in maintenance costs Profit margins only looked at one element of the business, thus reinforcing a silo
due to increased costs of materials approach.
In future, difficult choices need to be made about the allocation of
Lower growth in house price inflation Asset management scarce resources when housing providers develop their business
plans. The quantitative value of a good PMS is therefore not just
about achieving improvements in cash management (arrears), profit
Little or no future government grant Asset management margins (bad debts, void turnover, management and maintenance
savings) and asset management (leveraging value from existing
properties). The PMS should also be capable of providing overall
coordination by monitoring the execution of the business plan
together with identifying the financial and risk implications of having
Let’s look in a little more detail at the performance responses in the
to vary the plan during the year. Qualitative value will also then be
table above:
enhanced by increasing brand reputation with key stakeholders such
• Cash management – arrears is the obvious performance issue, not
as lenders, customers and regulators.
least because good income management reduces need for housing
providers to borrow more from the banks; Summary
• Profit margins – tighter management of specific geographic areas The future economic and political risks facing the housing sector
will allow housing providers to make cost savings in maintenance mean that it needs to focus more than ever on improving performance
and management (such as staff, office space and void turnover); levels. This can only be achieved through the implementation of
• Asset management – targeted investments to maintain or increase effective performance management strategies and technologies which
the value of existing properties will allow housing providers to either are commonplace in other business sectors.
leverage future capital receipts or increase their borrowing capability.
Richard Bayley is research & planning director at Places for People.

2. 22 | housing technology | performance management www.housing-technology.com
Performance management
– Delivering a single
version of the truth
Chris Coan, managing director, Visualmetrics
Housing Technology recently interviewed Chris both operational and executive insight into What are the qualitative benefits of a
Coan, managing director of Visualmetrics, core processes around housing operations, performance management system?
on what drives the adoption of performance developments and repairs processes as well While a quantitative business case should
management systems, the tangible and as finance and cashflow management. support the decision to invest in enhanced
intangible benefits of doing so, and how to performance management, many of the
A pertinent example would be the changes
integrate your performance management benefits of doing so cannot be measured
in the housing benefits ceiling, where the
system with other core business applications. individually. Instead, cross-sector reference
need to monitor and manage tenant arrears
data for these combined qualitative benefits
will become acute in certain areas. Only by
What are the business influences behind provides assurance of their business benefits.
having the information to quickly respond
the adoption of a performance management
to arrear trends, will housing providers be • Executive benefits include: enhanced
system?
able to minimise the financial impact these tenancy engagement, streamlined and
The drivers for enhancing performance
changes could bring. automated performance management
management fall into four categories. First,
processes, increased staff motivation,
we have executive drivers, key among which Operational and functional drivers
assurance of regulatory compliance for
are tenancy engagement, government and (information aggregation, user self-service,
inspection, and alignment of strategic
regulatory compliance, executive command time-based analysis, financial comparatives,
goals with operational measures, metrics
and control, monitoring finance and budgets, drill to detail, etc) and technical drivers
and reporting;
and delivering a single KPI-based view of (data integrity, integration, automation,
• Operational benefits include: time-based
performance linked to strategic objectives. traceability and security) are the final two
analysis and trending, comparatives of
areas that influence the need to enhance
While regulatory compliance and government plan versus actual, multi-dimensional
performance management. It is the lack of
initiatives do not dictate how a housing analysis, real-time information alerting,
operational and functional capabilities, or
provider should measure business mobile device deployment, user self-
the technical configuration of the current
performance, they inevitably influence service, and drill to detail.
system, to deliver against either executive or
strategic goals at an executive level. These • Technical benefits include: enhanced
business area drivers that result in the need
must be cascaded down to operations and data integrity, integration, automation,
to enhance reporting systems.
a best-practice performance management auditability, traceability and security –
system must flex and grow to support What are the quantitative benefits of a some of which are becoming quantitatively
them. The Affordable Housing Development performance management system? measurable as companies begin to
initiative will create a need for companies Alongside the cost savings arising from understand better the value of information
to deliver insight from the top (executive) to information automation, the increased as a business asset.
the bottom (operational) of how long-term opportunity for cost of service delivery
What should potential buyers of a
capital developments are performing. optimisation completes the quantitative
performance management system look
business case.
Equally, the change in regulatory compliance for, in terms of functionality and corporate
metrics that follows the disbanding and The focus has to be driven from improving credentials?
replacement of the Audit Commission and income from assets while effectively Above all else, a proposed partner for the
TSA could be weighted to place particular controlling expenditure. Key areas for delivery of a performance management
emphasis on any key area of operations to analysing returns include voids and arrears solution must understand the customer’s
ensure cost-effective service delivery. In turn, reduction, enhanced efficiency in all aspects exact requirements. No two companies are
this will affect a company’s ability to ensure of the repairs process, better control of the same, and it is only through consultation
operational reporting and executive strategy income and expenditure, ensuring more and project scoping that a solution can
are aligned, if the system they currently use effective capital and revenue expenditure, be delivered that ensures it addresses a
cannot adapt. driving increased reserves/surplus, and customer’s specific challenges.
where appropriate, better insight and control
As many organisations in the housing A performance management system must
of financial management across the life-time
sector look to consolidate or merge to have the design flexibility and scalability
of commercial developments.
deliver more cost-effective services, the to change as the business evolves through
challenge of delivering a single view of group Creating a mutually-agreed RoI model organic, acquisitive or external forces, such
performance – from operational to executive between the supplier and the customer as the affordable rent or the (planned)
levels and from multiple people, processes ensures that the performance management option-to-buy initiatives. Other requirements
and technologies, and leverage combined system not only delivers against the include sector knowledge, a proven approach
data assets – often drives a requirement to functional and technical requirements, but to designing and delivering performance
enhance performance management. also that business adoption is properly management projects, and a technical
promoted to support and drive business knowledge of operational applications and
The second key area is the greater need for
change, thereby ensuring the financial associated software tools.
performance management systems to deliver
benefits are fully realised. Continued on the next page

3. housing technology | performance management | 23
Performance management – Finally, the vendor must have the philosophy company’s business performance state to
to engage in a partnership that is flexible complement and overlay with the operational
Delivering a single version of enough to cope with changing business applications. By drawing data from the
the truth demands over time. housing, financial, asset management and
other operational applications, it provides
Continued from previous page How does performance management fit
an ‘information viewfinder’, giving business
within the pantheon of ‘core’ business
While technology should always remain a users an intuitive and understandable way of
applications?
secondary concern to fulfilling the business monitoring performance metrics in line with
Every company analyses its performance;
requirements, a partner with the ability the executive strategy and to streamline and
it is already a core activity. How well it
to exploit current technology investments enhance performance.
does so, whether it’s through anecdotal
and deliver a system using whichever
manual information or a best-practice Best-practice performance management
software technology fits best, whether it’s
performance management system, will must support the information demands
SAP BusinessObjects, IBM Cognos, Oracle
determine its success. of all user communities; the better a
or Microsoft, will maximise the business
company exploits its data assets and feeds
benefits and mitigate the risks. Best-practice performance management
information to its employees, the more cost
provides a summarised KPI view of a
efficient its services can become.

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5. Balancing Your Drivers
For Social Housing Performance Management
“We required a tailored solution, “We needed to align our
not a product; aligned to our strategic goals to our
unique requirements, not operational measures, to
➚
➚
someone else’s” drive cost efficient services”
EXECUTIVE BUSINESS AREAS
• Regulators & Government • Tenancy
• Executives & Strategy • Asset Management
• Management Functions • Compliance
• Finance & Budgets • Repairs
• Tenant Engagement Optimised • Developments
Performance Management
OPERATIONAL TECHNICAL
• Information Aggregation • Integrity
• Drill to Detail • Integration
• Time-Based Analysis • Automation
• Financial Comparatives • Auditable & Traceable
• User-Self Service • Security
➚
➚
“We wanted one scalable “We had to be able to
information platform where automate data integration from
we could start small in one multiple sources, to deliver
area, but think big” one version of the truth”
Call: 0870 7606467
or visit www.visualmetrics.co.uk
visualmetrics | Specialists in the scoping, design and delivery of
Performance Management and Data Warehousing solutions for
Social Housing operations, through a consultative approach that
solves your unique information challenges.