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Let’s talk ROI not IoT

Technology providers need to start providing more transparent ROI figures and statistics - so we get into detail about how exactly we should be doing this.

Tom Robins
Tom Robins

Jul 27, 2020

The publication this week of itica’s ‘Future of Social Housing ICT’ survey makes painful reading for those of us supplying technology into social housing. The survey revealed that 58% of Housing Providers believed they were able to evaluate ROI for a major technology decision. Unfortunately, this view was not shared by their partners with only 23% of suppliers and consultants believing they were capable of doing so. This is especially concerning when you consider that only 38% of housing providers believe that suppliers provide good value for money while 90% of suppliers and consultants feel they do. How did we end up with such a gulf of understanding and where did the value proposition go so wrong?

The Canyon of Expectation

Technology suppliers (Switchee included) ultimately have to take responsibility for this ‘canyon of expectation’. We love and are excited about what we do and we want to make a difference in the quality of life for those living in rented homes. However, that love has in the past made us blind to the challenges of transforming our cutting edge technology into recoverable savings. This canyon that has opened up is akin to the difference between theoretical savings in a spreadsheet and those savings being taken out of your budget for next year.


So how do we in the IoT industry cross this canyon of expectation? A director of a major housing provider recently proclaimed at a conference that ‘IoT isn’t there yet’. She listed four areas that those of us who provide IoT services need to sit up and engage with:

1. The costs are too high – There is a perception that the up-front cost of the equipment doesn’t deliver the savings to ultimately justify the spend.

2. The installation speed is too slow – IoT technology needs to be physically installed in homes and then it needs to be supported with new batteries and updates.

3. The tangible benefits feel far away – IoT poses some exciting benefits to housing providers but they feel far away to those in charge and COVID-19 hasn’t helped the problem.

4. IoT only makes sense in new builds – Given the constraints above, the logical answer for housing providers is that IoT only works for the small percentage of new build properties they create.

What can we do about it?

Ultimately, IoT in social housing requires the device to be physically present in the home and dependable for at least 10 years. This is long beyond the expectations of other everyday electronics. To survive in social housing that device needs to be attached or integrated into the property with a permanent power supply as replacing batteries every few months is not sustainable. So how do we make it more affordable? Technology providers need to look at more sustainable cost methodologies - Switchee, for example, have been allowing customers to spread the cost of the device over time to make the cost of the device cash positive in year 1 when considering savings. Due to the complex requirements of social housing, IoT devices that thrive in this industry are also by definition more complex. The same requirements that make a device viable for affordable housing also increase the cost of installation. One solution we have found is to upskill housing provider installation teams to allow for the installation of a device during another job that requires them to be in the home. This method of installation is also far more cost-effective. Boiler upgrade programmes, voids or even emergency repairs are all opportunities to connect a home at a marginal incremental cost.


As an industry, we also need to stop focusing entirely on cost. One IoT provider recently announced an IoT deal costing a housing provider £1m. While I am excited for them as well as excited for traction that IoT is getting in the market, the messaging might be counterproductive. We should be aiming to make announcements about the scale of the savings, not just the costs. It seems unlikely that the main selling point to the housing provider was spending £1m.

We also need to recognise that as much as there are benefits out of the box with IoT, many of the benefits come from across multiple departments within a housing provider. This often leads to a discrepancy between the department paying for the product or service and the department making the savings. We have found that the greater the cross-department collaboration, the more benefits a housing provider gains from these technologies. We would love for a single value proposition to be delivering value to a single budget holder but the breadth of the value proposition for IoT devices will never be that way. The value that data brings does not discriminate by departmental codes.

The big opportunity for housing providers when it comes to IoT is retrofitting existing stock to provide quality of life and quality of insight improvements across an entire portfolio. Switchee operates with the view that a device that is cash positive in the first year and whose installation costs are marginal can deliver a significant ROI rapidly - turning features into pound savings. I hope the itica survey does not reflect an excepted norm but instead lays down the challenge to technology providers to cross that canyon of expectation. Let’s talk about ROI in exactly the terms housing providers account for it and prove our value.

Read our full guide on IoT in Social HousingIoT-whitepaper-blog-teaser

Tom Robins

Tom is Switchee's Chief Strategy Officer. He has a passion for positive change, business development as well as optimising customer journeys. Tom previously worked for Community Fiber as their Chief Development Officer and for Capita as a Business Development Director.

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