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   ARTICLE   |   From Scotsman Guide Residential Edition   |   May 2017

Designing With Intention

Adoptimization can eliminate wasted potential in loan origination systems

Designing With Intention

When architects design a building, they try to balance the aesthetic appeal of the design with the purpose and function that makes the building useful. To accomplish this, architects design buildings with “intentional spaces,” or rooms with features that are created to max imize a particular usage.

An architect might design an entryway to maximize a person’s experience as they enter a building, for example, knowing that it influences how people feel about the rest of the structure. Doors and windows are placed such that light enters rooms in a certain way, or certain materials are used to shape the acoustics or texture of a room. Software developers can learn a lot from this intentional-design philosophy.

Great architects make a deliberate attempt to influence how people interact physically and emotionally with a room. If that room gets used inappropriately, it ends up just being wasted potential. Designing software is, in many ways, similar to designing a building. Software developers must have “intention” behind every feature they build into the package.

This seems like a ridiculously obvious statement, but think about how complex most loan origination systems (LOS) are. There are so many features in the typical LOS — some big, but most really small — that the average mortgage company likely does not use more than 65 percent of the full functionality available to them.

How can lenders and mortgage companies know whether they’re maximizing the potential of their LOS? Is it even possible to know what the system’s true potential is?

Missing out on the potential power of an LOS is surprisingly easy to do. One mortgage company reported that it created a cumbersome manual process to perform a relatively simple task because they didn’t realize the button to perform the action already existed — located by scrolling down a little further on the screen. In another case, a company admitted they were not aware of an interface with an appraisal vendor until the LOS vendor started working on an interface for an entirely different service.

Neither the companies, their loan processors, or the LOS support teams were to blame for these issues. Truth be told, most usability issues are much more complicated. But these examples reveal very clearly that all the hard work put into building features ends up as wasted potential if processors — the end users — don’t know about them or can’t use them.

Maximizing potential

Maximizing technology is more than just putting together great features and a smooth user interface, however. As the “architects” of mission-critical systems, LOS vendors should know best how to use their technology. Therefore, mortgage companies should be able to rely on their vendor partners to demonstrate how to use the systems as effectively as possible, but these vendors need help from the end users.

By investing heavily into developing internal processes and services that focus on maximizing the effectiveness of their LOS, mortgage companies and their partners can identify user adoption and system optimization as critical targets of their mortgage process strategy. This blend of adoption and optimization can best be summed up with the term “adoptimization.”

Adoptimization is what occurs when a user both knows a system’s functionality and can use it optimally within a normal workflow. It involves system configuration and training, but first requires a deep understanding of a company’s workflow.

This means that mortgage companies and LOS vendors must work together to bridge the gap between a loan processor’s desired workflow and what is functionally feasible within the selected system. This is achieved by providing processors with best practices that detail how a function or process was intended to be used by the software’s product designers.

The impact of adoptimization is greater utilization of system features, which produces a net gain in terms of productivity and overall user satisfaction. Or to put it in executive terms, adoptimization is the most direct path to a higher return on investment (ROI) on the LOS system.

This is not to say that processors cannot adhere to their company’s desired process. A vendor’s suggested best practices merely offer a recommended strategy for optimizing the functions of the system.

Moving forward together

The first step in adoptimization is ensuring LOS vendors and mortgage company execs and processors are involved from the very beginning to make sure the technology and the company’s workflow complement — or even improve — each other.

Michael Stalnaker, vice president of business-process management for Southern California-based Mountain West Financial, said adoptimzation helped his company think of the mortgage process as a manufacturing pipeline. “It’s a foreign concept to those in this industry that have been here a long time,” Stalnaker said. “But make no mistake, it has some elements of manufacturing in it. The repetition that people do in mortgage are not unlike the people that sit in front of a punch press. There’s still a conveyor belt here. You just don’t see it.”

When Mountain West converted to a new LOS, they needed to ensure the software would be able to match and enhance their workflow. The new LOS vendor laid out exactly how the system was intended to be used and presented configuration options in the context of Mountain West’s workflow, which took some work. “Our process, our workflow — it’s not on a piece of paper,” Stalnaker said. “It’s not something that we could easily draw.”

One benefit of adoptimization is faster implementation because project managers can deploy known best practices more easily than unknown practices. Implementing integrations for documents, settlement services or compliance, for example, requires a level of coordination between multiple vendors and the lender.

When San Diego-based iServe Residential was looking to replace their LOS, for example, one of the most important factors for them was to find a platform that did not simply process loans, but also helped make the loan process more efficient for staff and customers. Once iServe selected a system, the design team worked with iServe to design the best configuration to fit their needs.

By focusing on optimizing not only the LOS itself but also the other tools iServe relied on, the company was able to refine the platform and its third-party integrations to maximize its workflow, which is important in an industry that is rapidly changing. iServe’s LOS vendor also makes continual enhancements to keep the process optimal, which is another benefit of collaborative adoptimization.

Going beyond implementation

The tenets of adoptimization extend beyond the initial implementation phase because change is a constant. Lenders and mortgage companies should seek out technology vendors that continuously add new features and functionality that evolve in response to market conditions. It is important for LOS vendors to keep lines of communication open so they can be informed of changes in process and address gaps as they appear.

Conducting regular assessments on a 24-month basis can help achieve full adoptimization. This assessment can allow the LOS vendor to inventory new features and learn about new process developments to identify ways to address gaps. This creates a continuous cycle to ensure that lenders and mortgage companies maximize the value they get out of their technology and services.

Stalnaker said he saw this happen in the two years after their LOS conversion. “When you start peeling back how to make the lean-lending workflow work, you drive the workflow. You trust the system,” he said. “Consistency is the requirement of efficiency. As much as we changed our technology to fit our business, we also made cultural changes that allowed us to adopt the new processes necessary for our growth.”

•  •  •

There is no right way to ensure that lenders are maximizing ROI from their LOS, but it’s important to at least understand the full potential of what the system can do. Adoptimization starts by asking the right questions and finding someone — whether it’s a vendor, a consultant or another mortgage company — who can provide an answer. The more that loan processors use their LOS as it is intended to be used, the greater ROI their companies will achieve. Just ask an architect. 


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