The big data revolution is changing the way some organisations are viewing what they do. Social Housing providers, for example, have always seen themselves as being in the business of improving the lives of those with social housing needs. They provide roofs over heads at reduced levels of rent and they engage with residents to improve quality of lives e.g. through community activities, assistance in finding work or in getting the most out of the benefits system.
But increasingly easy access to data about the assets they own and the customers they serve is changing this view. It is becoming easier to see the impact upon residents’ lives that good quality, well managed properties can have. The findings suggest that a comfortable high quality house in pleasant surroundings without the stress caused by anti social behaviour, graffiti, or the need for maintenance and repairs can have a greater influence over quality of life than perhaps anything else.
The implications are profound. Those involved are beginning to wonder if Property Management should be the core activity that defines the purpose of the Social Housing provider.
The question now being asked is ‘how can our data help us to realise the assets that represent the greatest value to both us and the customer?’
We must first work out what we mean by the value of an asset. Measures are typically financial in nature e.g. Net Present Value (NPV) – today’s value for future income earned less future activity costs, or the yield – the NPV of future income as a percentage of the market value for the asset.
On the face of it these seem to have little to do with the delivery of social value. But there is a link. Good quality housing in a nice area represents less maintenance cost and a strong market value, plus a better quality of life for the customer. Work by the Housing Associations’ Charitable Trust (HACT) and the London School of Economics bears the latter point out. For example, through the use of the HACT Social Value Calculator it is possible to associate a financial benefit with a range of intervention outcomes e.g. ‘relief from depression / anxiety’ or ‘no problem with vandalism or graffiti’.
But how do we create the maximum value from an asset? It is not as straightforward as simply keeping the asset in the best possible condition, although that will help with market values and the attractiveness of the property to rent paying customers.
We need to know:
– The optimum level of upkeep. As people who paint bridges know, there’s a point at which additional painting will no longer delay the point at which a new bridge is needed.
– Whether we are adding unnecessarily to costs through inefficient ways of working. The less we spend on activities that we should be avoiding (e.g. to recover from missed appointments with customers) the more we can add value within the lives of our customers.
A Value Stream Map of the Asset Lifecyle will permit both questions to be answered.
Imagine a path laid out which shows the significant stages in an asset’s life and how the income and costs ebb and flow as we pass along it. Imagine being able to see anticipated future costs with clues about how they might be prevented. Imagine then being able to see events in the life of the customer and how they help to build or to undermine social value. Many of these events will be beyond our control. But with some, the quality and location of the property might make a difference.
We get there by first mapping the stages in the life of a property, from the point at which properties are developed or acquired, through to their disposal. We then catalogue the activities that take place in the organisation and link them to points in the lifecycle. All activities are in the frame, whether back or front office in nature.
We have to accommodate a range of potential paths that a property might follow (e.g. built for rent versus acquired through stock transfer). But with activity costs and values linked to points along each path we can discover trends and patterns in value and cost over the life of properties as well as the influence upon value and cost from current ways of working.
We are assisting one of the great Social Housing providers in the country to develop an Asset Lifecycle Value Map.
Over the life of the project and through this blog we will explain what we are doing and how it is progressing. This is Part 1 of the story, within which we set the scene. Please look out for Part 2 in early August 2014 within which we hope to reveal the map’s design and outline the data to be collected to make it all possible.