This is the final installment of a six-part series on the most common mistakes that occur when evaluating, implementing, or using mortgage business intelligence (MBI). Today’s article discusses cost considerations and replicating outdated analytics.
Making decisions based solely on cost
While it’s a familiar and rarely disputed principle that purchasing decisions should never be based solely on price, cost of ownership still appears at the top of most buyers’ criteria lists. A thorough comparison of your options should quickly uncover whether or not significant price differences are warranted and your potential vendors should be able to make this very easy for you. If nothing else, extensive reference checks will give you a good idea of how much implementation support you can expect, and this is where good vendors tend to differentiate themselves.
Another detrimental practice is viewing mortgage business intelligence as a cost center. Think about the well-known attributes and effects of MBI: operational efficiency, expanded volume, improved customer service, and the overall effect of boosting profits and reducing costs. It can certainly be said that unlike the rest of IT, MBI can genuinely be a profit center.
Even a cursory survey of the market reveals the fact that business intelligence is new enough to the mortgage industry to be priced unusually low: well below what users in other industries pay for comparable platforms. Closing an extra couple of loans per month should be enough to offset the cost of a system, and when properly implemented, MBI surely has a much bigger impact than that.
Replicating current analytics in MBI
It must be said that it’s not necessarily a mistake, but this approach does tend to keep users from realizing the full value of an MBI platform. The true value of MBI doesn’t lie in merely automating your current analytics; it lies in changing the way you think about your business.
In my present line of work, I have the opportunity to see a great many MBI installations, and I know that replicating and automating current analytics is almost always the first step that lenders take during an implementation. It’s an obvious, reflexive move, and one that can represent enormous time savings. I’ve seen quite a few MBI projects in which lenders take their current spreadsheets and simply make replicas of them in the new system.
This can seem to be a huge advantage: some spreadsheets take days to produce, and when automated within an MBI system, the same information is consistently available without the legwork. But even though a lender might be saving time, they’re ultimately automating an antiquated process. The true goal of mortgage business intelligence is to do away with the vast majority of traditional spreadsheets and reports and focus instead on a small collection of key performance indicators that provide a real time picture of overall business health and performance. Detail should be readily available but drilled into only when these KPIs reveal issues that necessitate intervention.
I see this tendency to replicate traditional analytics as the first wave of industry adoption of MBI. It’s not a bad start, but as mortgage companies build fluency with this technology, and begin to truly understand how it enables them to drive effective and successful behaviors in staff at all levels, they’ll eventually discover that in the wake of MBI, traditional analytics are of little or no value.
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