The days of mortgage companies embarking on large, expensive and open-ended information technology projects are long gone and executives are focusing their efforts on smaller-scale projects that produce faster results, according to a panel at the Mortgage Bankers Association Commercial/Multifamily Servicing and Technology Conference this week in Dallas.
“Doing more with less is our reality now,” said Melinda Nolden, director of business and systems integration at Bank of America. “What we do internally is try to take a specific process, something simple like cutting checks, and pull in subject matter experts on the process and try to solve pain points.
“Technology doesn’t have to mean a huge system upgrade,” she continued. “It could be forms or spreadsheets that could save someone 30 minutes a day.”
Christopher Gaas, managing director of GEMSA Loan Services, said his firm has a similar processing mapping strategy. The company builds many of its own workflow applications internally based on the information it gleans from analyzing how different departments do their jobs. Those applications “smooth out traffic jams that give you a clear path from start to finish on various processes,” he said.
In addition, GEMSA’s systems include audit trails of activities and extensive hands-on training. “It cuts down on error rate and training time,” Gaas said, explaining that in one instance GEMSA’s insurance division was able to reduce employee training time from 120 days to two weeks.
IT projects are much smaller in scope now because they cost less and achieve finite objectives, said Paul Guades, vice president and head of process management at Berkeley Point Capital. He explained how a recent IT project was put out to bid and vendors came back with very high cost estimates.
“Our initial RFP was a general overlay of what we wanted to get done,” he said. “So there was a certain unknown that went out with that process.”
After the initial round of bids, the company redefined the scope of the project to a more narrow objective.
“We went from a $700,000 initial bid with the vendor we selected and we got down to $200,000,” Gaudes said.
Another key strategy for IT projects is assigning the right team to take charge of the process. Kevin Sullivan, director of servicing at Oak Grove Capital, said three of the four people on the team that handled a recent implementation of a new asset management system were from the business side of the operation and one person was an IT specialist.
“The team met for an hour every day to discuss everything that had happened on the implementation process over the past 24 hours,” he said, adding that the same team will lead the firm’s origination system upgrade because they’re already familiar with the process.
Even with a team leading the process, the rest of a staff also has to be involved, particularly in the testing phase, said Robert Wright, senior vice president of servicing operations at PNC Real Estate.
“The more testing you do, the better you’re implementation is going to be,” he said. “But you have to have people who take ownership of the testing.”
It’s not good enough to leave the testing to the vendor, because servicers have to understand how all of their systems will work together after a new implementation.
“It’s your business and your solution, so you’d better make sure the technology does what you want it to do,” he said.
