How Process Matters Well Beyond Technology

Technology is amazing. My last three Amazon purchases were tracked, communicated, and delivered the same day I placed the orders on my smartphone. The thought of all this would have been unimaginable not that long ago.

However, technology is only a part of the story. What is more important is how it is applied for it to be successful. As incredible as Amazon, Wal-Mart, Zappos, and other retailers’ technologies are, a tremendous amount of process analysis and management is required to create a fulfilling, consistent customer experience on a global scale.

These organizations asked fundamental questions, such as: What is my end game – the ultimate objective? What hurdles are blocking me from that objective, and how do I get past them?

The key to clearing these hurdles and achieving the objective is understanding the underlying processes and procedures. The end game is constantly evolving, so anticipating the most likely scenarios and planning meticulously for each one is paramount.

How does this concept apply to appraisal management?

Technology for order management and collateral review is better than ever, and it is crucial to the success of any Appraisal Management Company (AMC). There are so many great solutions available that it is surely a buyer’s market.

Whether developed in-house or bought off the shelf, the technology itself is not as important as the underlying policies and procedures. The most successful AMCs know how to apply the technology they use to address industry-specific questions.

How is the appraiser vetted? How is the appraiser assigned? How do you track the performance of the appraiser?

How about the performance of the AMC’s review team? Under what conditions should an appraisal review be escalated to a reviewer with more seniority? What is the AMC’s hiring policy?

Every question a lender – or a lender’s regulator – may ask should be considered, addressed, and documented in an AMC’s standard operating procedures. These consistent procedures should be well thought out and clearly communicated to the AMC’s lender clients.

Lenders need to understand the services their AMCs are providing. They are pushed by investors and regulators to understand the procedures of their providers. The only way for lenders to understand, manage, and mitigate this third-party risk is to evaluate their partners’ underlying business processes. This evaluation can’t take place unless these policies and procedures are clearly documented.

While technology is the sizzle, consistency of process is the steak – less sexy but ultimately more satisfying.

How to Ensure Your AMC’s Processes Underpin its Technology

Create an Inquiry Methodology and Stick with It. Meet as a team and decide on the areas where AMC procedures should be documented and submitted. Communicate this clearly to the AMC and develop a schedule for these submissions.

Ask for Proof. Ask your AMC to provide copies of its internal audits and revisions to its procedural documents. These will assure you that your AMC is carrying out its contractual obligations and acting as a good steward of your business.

Be Deliberate. Work with your AMC to adopt the mindset, “If it is not auditable, it is not a sustainable procedure.”

The principles are the same whether it comes to online retailing or procuring top-quality appraisals. A well-documented, consistent process is the key to a sustainable and winning product.

 

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About Norm Koenig

Norm Koenig
Norm Koenig serves as Dwellworks Director of Business Development where he is responsible for Dwellworks partnerships with its lender clients. Prior to joining Dwellworks, Koenig served as Senior Vice President of Sales at Platinum Data where he drove a five-fold increase in the number of RealView reports and helped position Platinum for acquisition by Mercury Network, one of the nation’s largest AMC software solutions. Koenig has worked in the mortgage technology field for more than 25 years.

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