August 2023 » thefivestar.com
57
August 2023
F E A T U R E
can complete a project in nine months, but a
hyper-experienced external one takes three.
In that case, you must factor in the opportu-
nity cost of that six-month lag along with the
outsourcing fees.
Phase 3: Identify Timelines for
Implementing Upgrades
E
ven though it's challenging (read impos-
sible) to forecast significant inflection
points in the market with precision, your FI
still uses scenarios that include a base case
for planning purposes. You're also watching
markets to identify opportunities—for new
products, lines of business, etc.
So, start with your long-term strategic
objectives and determine the technology
required to achieve them, their cost, and their
implementation times. At that point, you
can approximate a start date for a particular
project.
For example, suppose a strategic objec-
tive is to improve the mortgage application
customer experience to boost your close rate,
cut operating costs, etc. You may need to
implement a new application portal, which
can take at least 90 days. So, if you believe the
market will turn about a year from now, then
several months from now, you should start
choosing and implementing an application.
Similarly, if your strategic objective is
to enter a new line of business—mortgage
servicing or expanding the menu of loan
programs, for example—then that will re-
quire technology and processes you'll need to
implement that will take time to accomplish.
You Can't Predict the Market, but You
Can Prepare for It
I
f the last three years have taught mortgage
professionals anything, we never know
what's next. In a cyclical industry like this,
any relative lull is an excellent opportunity
to take stock and make plans. We're in one of
those lulls right now.
As we wait to see where interest rates go
next and how many other mortgage market
variables play out, now is a great time to
identify your organization's most significant
opportunities and define the conditions that
will trigger action to seize those opportunities.
