Case study: upgrading arrears management systems

Case Study

Arrears Management Upgrade

Re-engineering processes to reduce complexity and improve the user journey for our client.

Introduction To Technical Arrears

Effective arrears case management solutions are critical for creating an efficient and successful arrears process in the housing sector. Arrears, or the unpaid balances on rent and/or other charges, can have a significant impact on the financial health of a housing association. Just as important, is the wellbeing of tenants.

It is therefore essential to have a system in place that can identify and manage arrears effectively and provide help for those that are facing affordability issues. In this use case, we will share our insights on developing a successful technology solution tailored to arrears management within the housing sector and highlight the advantages that such systems can offer.

The Objective

A simplified, stable, reliable and robust system to recover the arrears as effectively and efficiently as possible was needed. In collaboration with our client, Neo Technology streamlined the collection workflows and processes and rewrote the system to improve recovery chances and reduce bad debt.

The Issue

Our client had already implemented an income collection process.

The aim of this process was to have a common approach across the organisation that provided automatic identification of likely and actual debtors, increased efficiency of collection/arrears handling processes, and reduced debt levels. However, the system had become overly engineered and complex, making it difficult to support and manage, thus arrears were approximately running at 8% of revenue. The arrears process comprised 32 business rules with variances for each business area and up to 50 steps that an arrears case goes through, generating notifications (SMS, email, letters) and tasks at each step. There were around 55 workflows comprising custom code modules, custom applications and web services that handled these business rules and case step transitions. The arrears processes had multiple system integrations with Dynamics CRM, Northgate, SharePoint, Datawarehouse, and others. The arrears case creation at that point took an average of 8 hours daily, which was too inefficient and time-consuming.

Risk Mitigation

Risk: Delays in delivery due to unexpected technical issues or challenges.

Mitigation: The project team will work closely with Digital Technology and Infrastructure teams to ensure technical challenges are identified and addressed in a timely manner.

Risk: Resistance to change from impacted teams and users.

Mitigation: User engagement and communication will be a key focus throughout the project. Regular updates and training sessions will be provided to ensure impacted teams and users are informed and prepared for the changes.

Risk: Incomplete or inadequate testing leading to issues post-implementation.

Mitigation: Testing will be a key focus throughout the project. A comprehensive testing plan will be developed and executed, with regular reporting to stakeholders to ensure any issues are identified and addressed in a timely manner.

Impact Of Not Delivering The Change

Not delivering the change and not simplifying the current system would mean the costs to maintain and support it will only ever increase. For illustration purposes, a housing association with approximately 30,000 homes would incur £250,000 in costs if they did not change. Also, without a new streamlined approach, arrears would stay high and introduce more risk of bad debt.

The Solution

Project Management Approach

The Neo Technology Agile/DevOps methodology provides regular reporting to stakeholders and ensures the delivery of projects within defined timescales and budgets.

The project will consist of three phases

01

Requirements Gathering and Analysis

During the first phase, requirements gathering and analysis, the team engaged with stakeholders from all impacted teams to identify pain points, gather requirements and develop user stories. These findings were used to inform the design and development of the new system.

02

Design and Development

The second phase, design and development, involved the creation of low-code – no-code components for the income collection workflows and processes. These components were designed to be more intuitive and streamlined, with a focus on reducing complexity, increasing efficiency and improving the customer journey.

03

Testing and Implementation

Finally, in the testing and implementation phase, the new systems were thoroughly tested to ensure they met all requirements and were fit for purpose. Once testing was complete, the new system would be implemented and rolled out across all relevant teams.

We Took The Following Actions:

Analysis of the Existing System

This will involve a detailed analysis of the existing system to identify areas of inefficiency and complexity. This will help to inform the design of the new system.

Design of the New System

Using the findings from the analysis, a new system was designed that is more efficient, reliable, and user-friendly. This will involve the re-engineering of the current processes and business rules to reduce complexity and streamline workflows where possible.

Development of the New System

The new system was developed using the low-code development techniques selected in the design phase. This will involve the creation of new custom application code as low code components, refactoring of workflows for code optimization and performance where necessary, and testing to ensure reliability and accuracy.

Implementation of the New System

Once the new system was developed and tested, we implemented it across all relevant tenures. This will involve data migration from the existing system to the new system, training of staff on the new system, and integration with existing systems.

Monitoring and Evaluation

The new system was monitored and evaluated to ensure that it is meeting the desired outcomes. Any issues will be identified and addressed promptly to ensure that the system remains efficient, reliable, and user-friendly.

Project Governance:

To ensure that the project was delivered on time, on budget, and to the desired quality, a project governance framework was established.

• A project board was established to provide oversight and guidance on the project. This included representatives from key stakeholder groups, including housing, leasehold, temporary housing, folio, key worker, care, and support.
• A project manager was appointed to manage the day-to-day activities of the project. The project manager was responsible for ensuring that the project was delivered on time, on budget, and to the desired quality.
• A project team was established to undertake the activities of the project. This included digital technology, digital product management, programme management, data and reporting, data team, security, and infrastructure.
• A risk management plan was developed and implemented to identify, assess, and manage risks throughout the project lifecycle.
• A communication plan was developed and implemented to ensure that all stakeholders were kept informed of project progress and outcomes.

The result

Neo Technology’s re-engineering of the income collection processes using low-code/no-code solutions addressed the issues with the system and achieves the desired benefits of simplification and automation of process, improves reliability, improves value for money, and improves staff and resident satisfaction.

Automated notifications to customers in the earlier stages of the workflow save hundreds of hours per week, again for illustration purposes our client with approximately 30,000 homes would achieve 36% cost savings if the change was made. Also, with the new streamlined approach to arrears as described, bad debt would be significantly reduced.

The project governance framework and Agile/DevOps approach ensured that the project was delivered on time, on budget, and to the optimum quality, the risks were effectively mitigated and stakeholders were kept informed of any issues on a regular basis.

Our approach to the arrears case management systems helps to improve the overall efficiency of housing associations. By providing a streamlined and efficient process for managing arrears Neo Technology reduces the administrative burden associated with arrears management and improves the overall health of the organisation.

Features of The Arrears Management Group

Data Integration One of the key elements of the arrears case management was the ability to integrate with existing data sources. This means that the systems could capture and store all relevant data in a central location, including tenant records, rent payments, and financial data. By integrating with existing data sources, the system provided a comprehensive view of a tenant’s financial situation, enabling our client to make informed decisions about arrears management.

Predictive Modelling Another essential element of the effective arrears case management system was the ability to use machine learning algorithms to analyse historical data and predict future outcomes. This enables early identification of potential arrears cases, allowing our client to take proactive measures and prevent arrears from occurring. Predictive modelling also helped our client to identify the root causes of arrears and develop strategies to address these causes.

Automated reminders and alerts The arrears case management systems also included automated reminders and alerts to tenants who had missed payments or were at risk of falling into arrears. These reminders were sent via email, text message, letter or phone call, and could be tailored to the specific communication preferences of each tenant. By providing timely reminders and alerts, our client could help tenants to stay on top of their rent payments and avoid falling into arrears as well as reduce debt.

Tailored payment plans The arrears case management system was also able to create payment plans that were tailored to a specific tenant’s financial situation. This meant that the system could take into account a tenant’s income, expenses, and other financial obligations when creating a payment plan. By creating payment plans that were tailored to each tenant’s financial situation, the housing association increased the likelihood that tenants would be able to manage their arrears and avoid falling further behind on their rent.

Automated Legal Action Management: When the housing association needed to take legal action to recover arrears, our case management solution was able to automate the legal action processes, such as generating legal notices and managing correspondence with tenants. By automating these processes, the system reduced the amount of time and resource required to manage arrears and ensured that legal action was taken in a timely and effective manner.

Reporting and Analytics: The reporting and analytics features were also important elements of our case management solution. These features enabled our housing association client to track arrears trends, identify areas for improvement, and measure the success of the solution over time. By providing access to detailed data and analytics reporting through Power-BI, the system could help housing association colleagues to make data-driven decisions about arrears management and improve overall performance at pace.

Scalability and Adaptability: Finally, we designed the arrears case management system with scalability and adaptability in mind. This means that the system is designed to be able to integrate with new data sources and adapt to changes in the housing market and micro and macro economy. By providing a scalable and adaptable system, our client can ensure that their arrears management processes remain effective and efficient over time. In summary, an effective case management system for arrears management in the housing association sector should include data integration, predictive modelling, automated reminders and alerts, tailored payment plans, automated legal action management, reporting and analytics, and scalability and adaptability. By providing a comprehensive and integrated solution, our housing association client improves their financial health, improves the well-being of tenants, reduces the need for legal action, and improves overall efficiency as well as tenant satisfaction.