GREENWOOD VILLAGE, Colo., – November 18, 2021 – In its November Insights Report, mortgage advisory firm STRATMOR Group takes a closer look at why so many new technology implementations fail and what lenders can do to achieve greater success. In “Digital Success: The Power of Process Led Implementation,” Michael Grad, STRATMOR Group senior partner, discusses the implementation process and prescribes a solution that will lead to better outcomes.
According to Grad, lenders who choose the right tools to empower their teams to best serve customers, and who implement these new technologies effectively, can win a significant competitive advantage via a speed-to-market strategy.
“Margin compression and lower volumes will drive lenders to seek out new solutions, while at the same time increased M&A activity will have them investing in technologies that will enable them to make necessary pivots to capitalize on new synergies to improve performance,” says Grad. “STRATMOR recommends a 360-degree, voice of-the customer approach, starting with defining the critical customer moments of truth and continuing through designing and implementing the enabling process/ technology to deliver success from the lender’s perspective.”
Grad notes that after 20 years of supporting mortgage lenders as they implement new technology, STRATMOR has seen the challenges that can derail a component or an end-to-end digital implementation. Far and away the most common challenge Grad says his team sees is a lender with a non-existent or poorly developed operating model for the current market, or a technology provider with a poor understanding of the lender’s operating model.
“Understanding the lender’s Target Operating Model (TOM) is so important that we consider the solution to this final challenge an absolute requirement for a successful implementation project,” Grad says. He explains how the TOM is developed and used as part of an implementation workbook that vastly increases the lender’s chances of success when the new technology is put into production.
“We believe a top-down, customer-driven strategy drives the required digital core platform capabilities, processes and the enabling technology infrastructure,” Grad said. “Without this target operating model in place, lenders are literally investing in the dark.”
The most significant benefit of beginning the work with the TOM is that it can conceptually align all parties involved and provide the required direction, structure and discipline for the implementation work that follows. STRATMOR calls this approach Process Led Implementation, and Grad says it has been very effective for customer-facing technologies such as Point-of-Sale (POS) and Loan Origination Systems (LOS).
“The Process Led Implementation approach is a combination of the best tools brought to the table by the lender, the technology provider and the STRATMOR advisory team,” says Grad. “It allows lenders to clarify and verify their Target Operating Model assumptions and at the same time it allows us to help technology providers get their tools into production faster. This is important as many modern technology contracts don’t generate revenue for the lender until the technology is used.”
Grad notes that having the right framework for the implementation process is a vital first step. STRATMOR recommends lenders form their own internal, multi-disciplinary teams to seek out answers and to respond to the problems that naturally arise during the digital design and implementation processes and as changes in the industry create new challenges. STRATMOR helps lenders prepare these internal resources through their Digital Innovation Lab (DI Lab).
Find the entire article in this month’s Report.
A second Insights article by STRATMOR Group Customer Experience Director Mike Seminari, “From Chaos to Order: An Award Winning Mortgage CX Strategy,” explores the critical parts of the process that challenge lenders seeking to bring order to the chaos that is the mortgage customer experience. According to Seminari, there are some companies who have “connected the ROI dots” but once refinance business dries up and margins shrink, Seminari says price wars will intensify. “Lenders who compete on price alone will quickly fall by the wayside, sacrificing business to competitors with a superior customer experience,” says Seminari.
Click here to get the full story in the November 2021 edition of STRATMOR’s Insights Report.
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