Article:

Realising digital transformation in housing associations

03 June 2021

Two-thirds of housing associations have started their digital transformation journey as a result of COVID-19, this is one of the key findings that our recent Social Housing Barometer showed. 67% of survey respondents made IT adjustments to facilitate remote working, with around half introducing new IT systems or platforms, since the beginning of the pandemic. 

These were vital responses as housing associations reacted to the developing crisis. Many have now moved into their “rethink” phase, looking again at strategic goals and their operating environment. There is a growing understanding that digital capability can boost efficiency, agility and adaptability today as well as resilience in any future waves of disruption.

Digital transformation is now imperative

It is becoming clear that digitising processes and operations is no longer optional or ‘nice to have’. We are unlikely to return to the old ways of working. Our research shows that there are two emerging trends which are accelerating digital adoption.

  1. Agile working.  Many employees have discovered benefits from digitally-enabled remote working, including increased flexibility in where and how they work. Some have made life decisions that involve relocation.  Organisations need to embrace the more flexible working that digital technology enables in order to recruit and retain talent. Remote working has also provided access to new talent pools as geography becomes less of a factor. Digital capability that enables flexible working has become a vital differentiator in the recruitment market.
     
  2. Agile decision making. The rapid move to widespread digital and remote working has disrupted decision-making procedures, however. Previously established and well-defined processes have had to be shortened and adapted, with more decision makers operating in isolation. This has increased the risk of fraud and vulnerability to cyber attack, and the potential for decisions to be taken without all relevant factors being considered. Decision makers need access to systems that drive the right decision making and also deliver real-time information so that they can get the right information at the right time and make the right decisions.

Your finance function and digital transformation

Digital capability is required across all functions, including finance. We see increased emphasis on creating the “finance function of the future”, enabled by real-time systems and data. A well designed finance function can do much more than generate financial data, and can build resilience within the organisation through predictive data on future cash flows, supplier management, ad hoc operational and performance data and robust controls to protect against fraud and error.  The data is increasingly non-financial as well as financial, giving insights into areas such as employee wellbeing, as well as the financial health of the organisation.      

How to make digital transformation a success?

If the need for digital transformation is clear, how can housing associations best achieve it? One essential step is to complete a proper process of requirements gathering – understanding the needs of stakeholders and the desired outcomes. This includes understanding information sources, data flows and which people need to be engaged in specific processes. By completing MoSCoW prioritisation analysis on system requirements, you will get clarity on what you must have now, should have, could have and would like to have in future. 

As well as the requirements, it is also essential to design the processes around the system.  This preparatory stage is vital because embracing digital means more than digitising existing ways of doing things. Increasingly the planning is about identifying the desired behaviours, processes and controls to drive efficiency and outcomes.  For example, some organisations could simply introduce invoice approval systems, but proper design of the purchase to payment process can introduce approvals of orders which will manage costs and avoid waste.  

It is also important to understand the “quick fixes” that individuals and functions may have introduced to solve a particular challenge associated with COVID-19 operating conditions. These “quick fixes” need to be properly managed, ensuring that solutions meet all necessary security and data requirements – which is unlikely. For example, data might now be accessible through personal devices, or printable at home.  You must monitor whether the personal data held by your housing associations is still located safely and securely. 

Isolated quick fixes also increase the risk of system silos and organisational fragmentation, where data can no longer flow in an integrated way across a housing association. It is important that organisations build a data strategy that addresses factors such as data storage, accessibility and approvals. For example, cloud-based systems can support scalability and agility and remove the need to invest in infrastructure, but could also increase certain data risks.       

As another step to enhanced digitisation, many organisations could benefit from improving their understanding of current systems. For example, by employing a solution that looks across the Microsoft environment, organisations can map current technology usage and any inefficiencies, such as licences that are not being used.

Culture as well as Technology

Once needs have been established and strategies clarified, implementing solutions is easier than ever. Digital solutions are increasingly affordable and modular in nature. There is no longer an expectation that one system must do everything. Open API means that different solutions can be put together to create an integrated outcome. 

Although the technology may be easier, digital success doesn’t depend only on the tools, of course, but also on the people using it. Training and support needs to be provided to encourage adoption and optimal use. Organisations need to consider too how technology can potentially impede, as well as support, their people. For example, holding virtual meetings at short notice is now standard practice, but too many meetings could prevent individuals actually getting on with their work. 

Get expert advice on the next step of your digital journey. At BDO our digital teams can help with the selection and implementation of financial systems and help organisations design the right controls to reduce risk and drive efficiency.