Leverage Partners

As a long-time consultant in the financial services industry, I’ve been involved in every aspect of software implementations. Over those years, one thing is certain: Everyone is on the hunt for innovative opportunities to reduce cost, duration, and program risk during implementation. While there are many ways to approach solving these implementation concerns, I’ve seen one tried-and-true method work for both large and midsize lenders alike: leveraging third party partners that are hyper-focused on identifying and avoiding the challenges commonly encountered when deploying a new loan origination system (LOS) will help fill key resource, skillset, and expertise gaps that neither the mortgage lender nor the LOS vendor have readily available or seek to staff long-term.

Tactical and Practical Tools for Success

Partners provide three distinct tactical benefits during implementation for both lenders and providers alike. First, a partner can help cascade the implementation program’s goals, functioning as an intermediate layer between broad directives from executive leadership and tactical changes requested from the operational team on the ground. By establishing explicit and prioritized guiding principles, they continually confirm and/or redirect the implementation to meet its goals for duration, price, scope, and other factors. This independent viewpoint allows for rigorous assessments of the costs, benefits, and risks of implementing each specific scope item or change. They constructively challenge the notion of “because we’ve always done it this way” by constructing and analyzing other scenarios that also meet or exceed project goals.

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In addition, partners can impartially define, consolidate, monitor, and report on priorities across all parties (such as leadership, business, operations, IT/architecture, and vendors), performing program arbitration as needed when conflicts arise. Given their experience in similar situations, partners can also educate parties about the key areas that are frequent offenders for delays, conflict, budget blowouts, and overlooked risks, while helping watch for signs of trouble. Constant momentum is also maintained, working with the team to focus on daily and weekly next steps, while showcasing how these translate to the next phase and longer-term goals, avoiding analysis paralysis and connecting the parts of the overall project vision.

Finally, partners can also offer useful perspective on the broader picture. By attending industry conferences and engaging in larger corporate-wide strategy conversations, partners can help counsel on external topics such as developments in customer behaviors and competitors, as well as internal topics spanning strategies, technologies, and efficiencies across lines of business.

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While it’s clear that a partner’s “outsider” status strengthens their ability to add tactical experience and expertise that isn’t part of the current organization, they also come equipped with a kit of practical tools that have been refined and expanded over many years, projects, industries, clients, and teammates. A third-party partner should bring to each assignment a kit of practical tools backed by specific expertise in areas including:

Program strategy – Ideally, partners will have line of business-specific templates for target operating models across people, process, and technology and maintain frameworks for developing quick wins, intermediate goals, and longer-term program vision.

Vendor management – Lenders can leverage partner-developed vendor RFI scorecards, questionnaires, and high-level requirement templates for initial comparison and selection, and then subsequently use trackers for monitoring and ensuring on-time delivery.

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Program management – Partners should maintain a toolkit of status report, risk/issue trackers, project plans, role/responsibility definitions, and project organizational chart templates across the variety of implementation methodologies.

Analysis – Partners should have developed best-practice process flows for both business and technology as well as high-level and detailed requirements and use case templates.

Testing – Lenders can avoid developing a single-use testing strategy and supplement their own test scripts and defect management tools via partner templates.

Training – Partners pair with vendors to design comprehensive training strategies as well as build and execute training.

Configuration and support – Provide data mapping, code development, testing, and deployment within or wrapping around the core platform

The benefits don’t stop there, either. Due to the transient lifespan of any single implementation, partners have developed resource specialties to fill the temporary project gaps created when a lender with a strong focus on operational strategy decides to implement an offering from a vendor with a strong delivery strategy.

For example, partners have built up teams that specialize in specific verticals such as mortgage, home equity, consumer lending, and commercial lending. These are particularly useful for lenders that want to challenge their current operations or are moving into a new product offering. Partners also have teams working across products to focus on horizontals such as channel optimization and marketing, risk and regulatory, business process outsourcing, talent and organization, etc. This can provide lenders with a health check on how they’re performing or supplement areas in which the lender knows they need additional support improving.

Partners may also have specialized capabilities and thought leadership in new offerings such as digital, mobile, reporting and analytics, artificial intelligence, machine learning and robotics, and data privacy and security. This can augment the partner’s ability to define progressive, yet practical next steps.

When to Leverage a Partner?

Comparing the implementation strategy and goals against the current organization capabilities and availability will help confirm the cost/benefit of adding a partner. Key elements to consider include the need for advisory support (important if the leadership wants independent advice on the industry, strategy, execution, and/or operations, or if the lender is moving into a new line of business or expanding into unfamiliar territory) and/or strategy support (which may depend upon how mature their model is for defining, framing, and executing strategies).

The lender may also need execution support, depending upon who and how much of the current operational team can be diverted to support the implementation and what mechanisms exist to backfill those needed for the project. Finally, the lender may need capability support, depending upon any implementation skillset gaps that internal resources have and whether the lender is looking to build and leverage these project execution skillsets again in the future. If so, key focus areas for internal development plans need to be established.

Two other elements are important in the decision as to whether to take on a partner. The first is project duration. What would the expected ramp-up time for a partner resource be, given the role and responsibility? What would the expected ramp-down time be for leveraging an internal resource in the same role?

The second is project cost. Here, the analysis focuses on comparing the expected cost, skillset, and allocation for an external partner against an internal resource.

How to Leverage a Partner

Partner organizations have built out flexible models to deploy resources aligned to lender scope, budget, and duration. Depending on the project, different types of resource models are available; three of the most commonly used are:

1.) Staff augmentation. Partners can provide one or two resources in key areas to function alongside internal project resources. This allows the lender to pull in templates, industry knowledge, and extra support on smaller projects.

2.) Tactical team. Partners can also be placed within specific areas, such as a requirements-gathering, testing, or project management, to provide a specific skillset or function. This allows the lender to reduce the project load on the operational team.

3.) Advisory services. Lenders can also request specific advisory services from partners to speak on key industry topics, review project strategies or decisions, or serve on executive committees. The independent voice helps provide an additional layer of quality assurance for the project.

In the end, it is up to each organization to assess their own implementation readiness and maturity, ultimately determining when, where, and how best to leverage potential partners. There is ample opportunity to create a unique combination of internal resources, software vendor resources, and third-party partner resources to best fit priorities and budgets while driving towards a successful LOS deployment that is fueled for long-term prosperity.

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