Attending conferences has a number of benefits, one of them is to give you a quick overview of what is happening in an area of activity so that you can assess how you compare with others. The fourth Housing Technology Conference in Oxford was no exception. It was interesting to speak to other delegates from housing associations to hear what they were engaged in, and reassuring to hear a familiar list of current IT projects. Mobile working, business information systems, customer relationship management (CRM) were the most mentioned. More generally there was a lot of talk about the increased importance of IT in a world where resources are declining. Automation of functions, channel shifting to cheaper, on-line transactions were much discussed. It was noticeable however that in most of the discussions of these things there was little little quantitative analysis. There was talk about improving the service to the customer with CRM and improving the efficiency of staff by having all the information they needed in order to deal with a customer inquiry accessible in one place. Prima facie this should raise productivity freeing resource to be deployed elsewhere or saved, but often this was left as a prima facie assumption rather than being specified in any detail.
Of all the sessions I attended, and I went to as many as I could, there was only one which had a very clear quantitative approach to benefits and measurable outputs and outcomes, this was the one done by Adactus. Ironically, it was not about the introduction of some new piece of IT equipment it was about deploying an Access Database to the analysis of cost and productivity. In essence it was about adopting the analytical standpoint of Vilfredo Pareto, the Italian economist and rigorously following this through. Pareto’s essential insight has become known as the 80/20 rule. This suggests that if you analyse data about costs you are very likely to find that 80% of your costs are generated by 20% of your customers. If you doubt this try analysing the most expensive 20% of your stock in relation to response repairs and see what percentage of the response repairs budget it takes.
Adactus set themselves the task of identifying who were their most expensive tenants. To do this they established an access data base and a mechanism for analysing costs to customers. Obviously, this dealt with response repair costs but it also got at other management costs including staff time to collect arrears, investigate anti social behaviour and so on. From this they produced a list of their 100 most expensive tenants each month. This provided a way of then more effectively targeting resources on what was generating the most costs to the organisation. Importantly, Adactus did not see these 100 tenants as their “worst” tenants. They were simply their most expensive and the cause of the cost might have nothing to do with the behaviour of the tenant, it may be about an unidentified structural issue with a property.
Not content with this Adactus went on to use the same approach to analyse the productivity of staff. Again, not using some sophisticated new piece of kit but with the same basic Access Database. Again, monthly information was produced about the productivity of staff based on measurable outputs giving an objective assessment which could be used in 1:1 meetings and annual reviews. Because the information was generated by a central team there was no question of managers bias or preference for some people over others. Objective data provides a fair and transparent way of measuring performance.
All of this activity was illustrated with examples of cost reductions and the overall impact was an improvement on the bottom line from c£1m profit to c£8m profit.
Now, it is of course a truth universally recognised that when projects are reviewed the positives are very much accentuated and the negatives are discreetly forgotten. Furthermore, it is not unknown for IT projects which fail to deliver their original outcomes to have these redefined and thus success is plucked from the jaws of failure. In the case of Adactus, a number of other things were mentioned as being implemented at the same time as the above, notably the establishment of a telephone based customer contact centre, with a programme of local office closures. These would clearly have impacted on the cost base of the organisation.
Having said all this, what was very impressive about the Adactus approach was that they had started with question, not a solution. Having set out the question they considered how to address it in the most straightforward manner using technology that has been around forever in IT terms. They used this to transform data into useful information about their cost structure and their productivity levels.
To date many organisations have used increasingly sophisticated technology to capture more and more data. Few have really made the next step to transform that data into useful information which can be used to drive the business. Adactus seem to have taken that step and should be applauded for it.