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The Pace of Digital Transformation is Slow: What’s Holding the Sector Back?


By Michael Appleby, Director of Markets and Growth at Altair

Change is happening at an exponential rate, and the housing sector has been slower than others in making progress in developing its service offer to reflect the pace of change. Retail, banking, local authority and estate agents have radically different operational approaches to those they used just 5 years ago, whilst the housing sector has remained relatively static.

The 1% rent reduction in 2016, provided a clear driver to organisations in reviewing the way they operated. Many considered greater use of technology and innovative approaches to their delivery models. In the same year we published the results of a significant sector wide research project to assess how housing providers were approaching transformation and innovation activities. The operating environment has changed significantly, even since that initial research, so in August this year we re-ran the survey to assess how far the sector has moved. Nearly 50 organisations responded, and we will be publishing a report with our full results later in the year. However, a summary of the initial findings includes:

  • The top three drivers of transformation remain the same as 2016: improving customer experience; increasing efficiency; and implementation of a new corporate strategy
  • 98% of organisations are planning or are currently implementing some form of transformation programme (up from 94% in 2016)
  • 90% of respondents describe themselves as either ‘early adopters’ or ‘early majority’ in terms of their approach to innovation and transformation
  • 61% describe themselves as either ‘digital fashionistas’ or ‘digirati’ in terms of their approach to digitalisation (up from 53% in 2016)
  • 89% of organisations currently have less than 40% of their customer transactions completed online
  • By 2025:
  • Over 75% of organisations expect to be utilising technologies such as smart devices (remotely controlled devices, sensors and alarms), chat bots, offsite manufacturing, big data and apps as part of their core approach to service delivery
  • Over 50% of organisations see an opportunity for greater use of artificial intelligence in the delivery of services

Innovation and transformation are topics still being discussed and considered by most in the sector. However, things haven’t moved on a huge amount in the last 2 years. Some organisations that have challenged the status quo and are truly embracing progressive approaches, but the large majority remain behind the curve compared to other sectors. Perception is a challenge with many of those who describe themselves as part of the ‘digerati’ or ‘innovators’ using examples such as implementing a self-service portal or adopting mobile working. These are important changes to implement, but they’re not particularly innovative and should only be considered the starting point for a modern approach to delivering any service. Of course, there are barriers in place which will slow progression (legacy IT systems, cost of investment, availability of skills etc.), but the need to change will only become stronger.

Our 2016 report forecast that by 2025 we’d see greater competition for customers, radical change in customer demands and new entrants coming into the sector who would challenge the status quo. This is already happening. 2018 has seen the private sector provider arriving full square on the block and the challenge to the status quo will continue to gain pace. Unencumbered by legacy issues, these new organisations have the freedom to design and establish modern and efficient services.

We’ve already seen the impact similar ‘disruptor moments’ have had in other sectors. Housing’s disruptor moment isn’t in the future, it’s already here.

We are continuing to review the results and complete further research, with full reports due to be published in December this year. In the meantime, for more information please contact:

Michael Appleby, Markets and Growth Director, Altair Ltd

Click here to link to the Altair website

Click here to read this article on 24housing.co.uk.