A lot has been written about how the Government’s decision to impose rent cuts as part of this summer’s budget will negatively impact on housing associations, with some commentators even suggesting the move will see many providers wiped out.
With the Chancellor George Osborne saying that the reduction will require housing associations and local authorities to make “better use of the £13bn annual subsidy they receive from the taxpayer”, many housing associations are looking for ways to cut costs, generate additional income and find efficiencies within their businesses.
Some are turning to digital as a tool to achieve these new goals. With good experience of delivering digital services into the social housing sector, here our some of Leighton’s key pointers for those thinking of using digital to combat the current challenges:
Defining what a Digital Strategy is
The digital strategy can vary greatly from company to company, but essentially it is seen as the process of specifying a vision, opportunities and goals inherent in digital initiatives in order to benefit as a business.
Think of the trusted supermarket diversifying into bicycle or furniture sales online for example, in order to take advantage of their reputation to sell a product that isn’t simple to stock in store. That’s a good digital strategy.
Businesses generally fall into three categories with digital strategy:
- The Past. Those that are looking into the past and considering if their company has been slow to act in relation to previous digital opportunities. Sticking with the supermarket example, it’s well documented that Morrisons online strategy was developed a long way behind their rivals, a failure which contributed to former CEO Dalton Phillips losing his job.
- The Present Others use the word digital to describe their use of current technology trends such as mobile applications. In 2014, one report considered that the consumption of digital media in the US on mobile devices accounted for 60% of total usage. This staggering statistic highlights the value of a robust mobile presence – be it via mobile applications or a fully responsive website – to all companies, especially those with a consumer presence.
- The Future Increasingly, many use digital as a way to reference the near future, in which products and services themselves become digital. Examples of this could be the automotive industry who are now routinely embedding digital systems into cars or the tobacco industry where sales of e-cigarettes – which all contain a micro-chip – grew by 79% in 2014 in the UK alone. Global yearly sales, for a product which didn’t exist before 2009, now stand at £6bn.
Digital transformation, a term that is increasingly used, defines the process an organisation goes through to reach new customers, explore new opportunities and refine internal processes through the use of or better deployment of digital tools.
Generating Income & Growing a Reputation through Utilising Digital Innovation
With the budget imposing rent cuts on social landlords, housing associations have two options when it comes to digital. They can shy away from it – considering it an expense that they can’t justify, or they can embrace it and make it central to their strategy for dealing with the after effects of the cuts.
Our experience tells us that utilising consumer-facing digital tools could have a huge impact on a housing association’s customer relations, rent collections and the filling of empty properties.
Such innovation – in a sector that is yet to fully embrace technological solutions – will also deliver considerable reputational benefits, impacting positively and directly on the brand, which in an increasingly competitive and challenged market cannot be underestimated.
Game Changing Internal Tools
In addition to those tools offered to one’s customers, a range of internal tools – such as those that can manage repairs and property improvements – will deliver both significant efficiency savings and improvements in productivity.
It’s important to remember that digital is not only about a revamped or re-built website. Better internal operations, more effective communication with tenants and driving efficiency through closer operational relationships with suppliers and facilities management teams, start with digital tools.
Gone are the days of those rather basic technological systems that only do one job and work in silo – failing to talk to all the other vital systems around them. The most progressive companies now use internal tools that are smarter, more connected and powerful than ever before.
These internal tools could also improve the generation of campaigns, speed up access to properties and reduce the turnaround time of empty properties. Finally, improved internal communication and the delivery of training & education via digital means can multiply their effectiveness and contribute to better staff morale.
Using Digital Assets to Sell More New Homes & Retirement Properties
Imagine a potential customer visiting a sales office for your latest development and touring an available property and the surrounding areas via a virtual reality headset.
We believe innovations like this will revolutionise the new property market. In the near future, potential customers will not have to rely on their imagination to picture themselves in one of your properties – they’ll be able to see it. They will be able to stand in their “virtual” kitchen, to admire the view from their new home and consider the dimensions of their lounge with their TV or furniture in mind.
The utilisation of these types of technology are already generating huge change in many industries – from healthcare to tourism and education to the military. Why shouldn’t the housing sales sector benefit too?
Developing a Digital Strategy Fit for a Housing Association
As we’ve explored, the opportunities that exist once an organisation has defined a digital strategy can be huge.
With the enforced reduction in social housing rents over the next four years and the fact that at any one time, there are 40,000 empty social housing properties throughout the UK, clearly an opportunity exists for the delivery of first-class digital engagement to make a significant difference to the social housing sector.
An effective digital strategy should be designed around four key points:
- Ensuring the highest levels of engagement with potential customers
- Improving the customer experience
- Marketing available properties more effectively
- Developing improved supplier engagement and understanding
Such an approach should yield a reduction in vacant property numbers, an increase in revenue and a host of efficiency savings within the business.
A Compelling Return on Investment
Digital projects regularly deliver a return on investment many times in the initial outlay.
In their 2015 CEO Survey (available to download here), PwC reported that the majority of CEOs now think that digital technologies have created high value for their organisations in areas like data and data analytics, customer experience, digital trust and innovation capacity.
The CEOs surveyed also point to operational efficiency as a key area where they have seen the best return on digital investment, with 82% believing value has been created in this area, with half of these CEOs seeing “very high value.”
When asked what technologies they think are the most strategic in facilitating the digital transformation of their companies and sectors, those completing the PwC survey believed mobile technologies for customer engagement (81%), data mining and analysis (80%), cybersecurity (78%), and cloud computing (60%) were among the most valuable.
Clearly many of these benefits relate to challenges faced by social housing organisations.