While the U.S Mortgage servicing industry has experienced some high-visibility IT troubles in recent years, there seems to be a more positive movement toward improving document management, compliance transparency and more importantly, delivering a level of customer service that serves borrowers and internal users well. As a leader in the mortgage-servicing industry, with more than 20 years of experience managing performing and non-performing loans to maximize the value of our clients’ real estate investments, Ocwen Financial sees IT improvement in all areas as a critical objective to remain competitive in the marketplace.
The sticking point: A full IT overall is one major initiative that doesn’t come cheap. It requires a daunting upfront investment, an investment in innovation that the Ocwen leadership was happy to make.
So how does a servicer affordably overhaul its technology landscape?
Currently in the midst of an IT overhaul, Ocwen has learned several important lessons during the first year. Among those are three propositions are critical to any servicer’s successful IT overhaul: First, leverage the efficiency of the latest infrastructure and applications; second, make IT integral to achieving strategic business objectives at every level; and third, balance innovation and cost.
Explore and adopt the latest infrastructure and applications available in the marketplace
The marketplace for IT solutions is so rich that it may be more expensive not to contract products and services. In other words, it is now more affordable to leverage others’ innovation to streamline and maximize what your IT team can offer. Data centers can be refreshed and modernized to be much more flexible and capable. For example, applications to manage service workflows, streamline HR functions, or increase transparency for regulatory controls are new enterprise applications that can benefit users across the company. Well-positioned startups, as well as innovation centers at the industry's bigger players, can supply affordable and possibly even custom-designed solutions for your needs. New, cutting-edge solutions can also be welcome upgrades for users. When carefully chosen and rolled out, they can serve to build support and momentum for a larger overhaul. More importantly, migration from legacy to state-of-the-art applications should be carefully managed as a full-fledged project.
Reintroduce Technology as a key transformation agent to realize business strategy
In the IT overhaul project roadmap, IT can be positioned to facilitate and enable business objectives. IT leadership should communicate to business partners and executive leadership how its solutions will help each user accomplish daily deliverables as well as help the organization reach short- and long-term strategic objectives. IT can be seen as more than just a maintenance function that keeps equipment running – it can be an asset to every leader, a partner who can unlock new value in designing solutions to business challenges. Clearly, becoming indispensable to business partners will help build support for IT initiatives. This need requires a strong communication function. IT team personnel, from the CIO down to the desktop support agent, should each be able to explain to any user or business partner the value their work is adding in plain terms. Users likely will not support the many disruptions an overhaul might cause if they do not understand what the payoff will be in the future. Another key to IT as a strategic partner is the flawless delivery of basic services. Near absolute quality control should be a cornerstone of the IT team ethos. Every ticket-resolution delay, poorly worded email response or slow peripheral replacement is an opportunity for sentiment to sour and attitudes to falter. Minimizing those hiccups, therefore, maximizes the chances of positive support and ultimate success.
Balance innovation and cost
Of course, no project can get off the ground and sustain without cost management. An often overlooked source for cost management is thorough, basic accounting for each dollar spent – current spending as well as every new contract or procurement – and the outcomes they return. Building a truly comprehensive inventory of current technology spend can produce immediate benefits by identifying waste and outdated contracts. Adding some calculation of ROI can identify further opportunities and prioritize them. Tracking ROI of new spend can help build support and momentum for the IT overhaul program by highlighting new savings and revenue. ROI numbers can also quickly identify where course-correction is needed and aid in contract negotiations.
Inertia often causes contracts to remain in place too long. Outdated contracts might be based on the organizational strategy and technology world of five, 10 or more years in the past. Instead, contracts should reflect the current state, which can be vastly different. The return on technology spend might have sufficed for the old state, but rerouting that spend to serve current strategy could also increase ROI.
Another aspect of the IT world has seen rapid development in recent years: the quality of offshore offerings for technology services. Offshore solutions and providers can be a source of significant savings without being a liability to your organization’s customer service levels or compliance performance.
CIOs in the mortgage servicing industry might face demands to increase technology output while also cutting costs. A strategically designed and carefully executed technology overhaul could be the answer.
