Registered Providers have been on the road to commercialisation for some time, and some may claim that they correctly pre-judged the direction of Government thinking as revealed in this year’s budget. A series of gigantic surpluses have been posted by some of the larger RPs over recent years, leading to claims that HAs could be “bedazzled by the prospect of greater and greater profits” (Natalie Elphick, Million Homes Million Lives) or various accusations that they’re on a “gravy train”. This is perhaps unfair given that such surpluses are generally reinvested in new development and improvements to services.
The Government’s plan to extend the Right To Buy to HAs and more recently the announcement that rents will be reduced by 1% each year until 2020 have intensified the pressure on RPs finances, already bruised by Welfare Reform. Group CEO of Thames Valley Housing Association Geeta Nanda argued this week in her Inside Housing piece Adapt and Thrive that diversification of operations is increasingly necessary to support their core social aims, whilst cautioning that good financial management is necessary if RPs are not to go the way of Kids Company – a worthy endeavour apparently let down by doubts about its governance.
If RPs are to truly step into the commercial world and turn a reliable profit, then they need tools to support their sales and operations which will maximise efficiency, leading to greater profitability and enabling strategic planning. With their financial strength and mature operations, their existing IT business systems could in principle give them a competitive head start. The challenge to Orchard and other suppliers in the sector is to prove that our solutions can be repurposed to serve commercial operations and not just traditional social housing business.
Practical questions must be asked about whether your IT systems can support a commercial enterprise in B2C and B2B markets. You need to be able to manage contracts with your customers, hold details of domestic and commercial buildings and even provide a full e-Commerce channel through which your target audience can find, browse, purchase and track delivery of your products and services, all without needing to call you. You need to be able to track sales prospects, manage bids and forecast sales.
The ideal solution will integrate all of your operations and data so that you can optimise the use of your resources and strategically plan using a single data source across the organisation or group, whilst recognising that a commercial subsidiary will have different needs and priorities to those of the social arm. So, is your supplier up to the challenge? The sector is entering a period not just of change but of transformation, and it’s the energetic, open-minded and foresighted suppliers that will move with the times.