From reduced government subsidies and funding, to decreased private sector budgets, the UK housing sector is under considerable pressure – all of which is being played out against the backdrop of increasingly stringent regulation.
As the cost of housing and the management of available stock continues to grab column inches, providers in both public and private sectors are looking to reduce spending and increase efficiency wherever they can. Digital transformation has long been a priority in other industries and is now rising up the agenda in the housing sector too. As the focus in boardrooms shifts to how technology can deliver savings, housing provider and local authority IT teams are being met with new digitalisation challenges.
Whether getting a repairs service fully online, replacing a legacy housing management system, implementing self-service, preparing for legislation such as GDPR, enabling remote working, or migrating to the cloud – IT has many issues to deal with. Underpinning most of these tech challenges is something few outside of IT and procurement departments are aware of – software licensing.
In recent years, with the growth of cloud based services in particular, licensing for software applications has become an increasingly complex but essential task. As organisations seek to digitally transform, understanding how the integration of new technologies and services impacts their licensing position will remain critical.
Cloud and Licensing can be a Volatile Mix
The majority of digital transformation projects will have an element of cloud computing to them; cloud solutions offer an elastic and flexible environment for organisations looking to build a more agile infrastructure. The housing sector recognises that cloud systems represent the future of computing in their industry, and we can see this in the number of enquiries about cloud solutions that the members of the Northern Housing Consortium (NHC) make; often looking for advice and best practice tips around implementation and broader digitalisation.
As with most digital projects, cost is a prevailing factor in getting projects off the ground, and in the speed of progression once underway. There is also an added element for the sector to consider when it comes to cloud solutions; one other cost that must be, but often isn’t, factored in, is the consequence of cloud on software licensing agreements. Many licensing terms in common use on the computing infrastructures of housing providers and local Authorities are more suited to the era when most deployments were on-premise. For instance, many End User Licensing Agreements (EULAs) prohibit the use of software in a third-party or public cloud environment; this means a provider can quickly find themselves non-compliant, and having to repurchase licenses at significant extra cost.
In addition, moving to the cloud can change the licensing position of custom-built applications. This is particularly relevant to housing providers as many will have bespoke housing management systems in place, or may have already rolled out a self-service platform, or an online repairs portal. Not only will a move to the cloud potentially impact performance (an organisation with an application built in-house may need to re-architect it so that it performs correctly in the cloud), but where this application was previously ‘sitting’ on a single owned server, it may now be in a dynamic environment made up of virtual machines across multiple locations, all of which have licencing considerations.
Clearing the Hurdles
For many housing organisations, the complications outlined above around software licensing and the cloud are magnified by the size of their organisation and the different types of user that the IT team provides services to – whether employee, contractor, or tenant. With a sizeable, nationwide, disparate workforce, the number of licenses required can often be prohibitive to large organisations. This means for IT teams, it can be hard to justify to the board – in an era of belt-tightening – the potentially large outlay a move to the cloud can involve. However, there are steps that housing providers can take to ensure that overspend is removed, and costs are comparable, to smooth the path to digital transformation. The extra flexibility and business level SLAs provided by major cloud system solutions should not be undervalued, nor should access to fully up to date versions of software.
Organisations within the housing sector can conduct a full software audit to get a clear picture of the number and types of licenses required, and carry out a pricing exercise to convert on-premise licences to cloud based ones. In many cases this is best done by engaging with a third-party that is experienced in decoding labyrinthine licensing agreements. This is because complex agreements are a barrier even for the most experienced IT teams. Ultimately, we as a sector must recognise that software is the foundation of a modern housing provider, and it should be treated as a strategic asset in any digital transformation and cloud computing initiative.