December 10, 2004

Technology promises better, faster, cheaper. We’ve all read this a hundred times. So why do business executives so often think technology promises fewer? You can blame it automation. When you tell an executive that you can achieve better performance at a lower cost through automation, they often envision empty rooms where once frolicked expensive employees. But the path to effective automation is generally paved with professional IT support personnel that don’t usually come all that cheap (see note 1 below). In most cases, the people are still there anyway, they’ve just been re-tasked.

A case in point is in the news today. American Reporting Company has been in the business of selling consumer credit reports for almost 20 years, we’re told. Recently, the company embarked on a mission to offer more settlement services, rolling them up into a bundle for lenders. This is a smart strategy in today’s market (if you attended last month’s TAVMA show in Orlando you know why).

The company is relying to technology to create its offering, of course, but the real power, the real enabling technology here is not computer hardware. A number of top Washington Mutual executives have recently signed on with the company, including eRadio alum Lee Kennedy, former top executive in charge of alternative valuation methods for WaMu (see note 2 below). We’ll be watching the company closely to see what this team develops, but expect to see some form of collateral valuation automation eventually.

Even so, automation is generally the smaller part of any technology initiative. As we point out in the upcoming RETI feature on expert systems, knowledge engineering is a huge part of the equation that is often not considered by management. Sometimes, to make things happen, you’ve just got to hire some experts and take advantage of their knowledge. That’s what ARC has done and that’s why we think they are a company to watch in the days ahead.

LION may also be worth watching. The company recently reported that a second lender had signed up to use the firm’s new mortgage technology productivity suite. You won’t find the story on the RETI website yet, but that’s only because LION hasn’t announced who the mystery client is yet, which, in our minds, means we don’t really know the story yet. As soon as we find out what’s going on over there, we’ll let you know.

Note 1: These expensive IT people might be getting a bit more expensive again, according to a new hiring survey that’s in the news today. Real estate was one of the areas where CIOs reported higher expectations for the coming year.

Note 2: We have another eRadio show coming up. This one is geared specifically to title companies that want to earn more real estate agent business by offering Transaction Management Platforms. It’s going to be very nuts-and-bolts with a lot of case-study and practical information provided. Find out more on the website.

Have a great weekend.

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December 8, 2004

It's funny how technologies make their way around the industry. In the upcoming issue of RETI we talk about expert systems and how they have evolved and changed to become parts of other successful systems in the industry. In today's news, we have another example. Fiserv is licensing software from BCE Emergis for its new EPC offering. But GAC's GATORs was an integral part of that BCE solution and now Fiserv owns GATORs.

In an industry this small, good people tend to make their way around, working their way through various shops and picking up good information along the way. Plus, because the industry tends to be cyclical, companies rise up, get acquired or die, disappear only to rise up again under a new name. Many of the technologies developed along this path are preserved.

Real estate sales may be less cyclical than mortgage lending, but if you talk to the right folks, they'll tell you the story is the same. A million members in NAR doesn't mean that, as far as the technology is concerned, real estate isn't a small industry, too.

What's really interesting is to look at the tools we have and overlay that against the economic cycles to try and determine why companies fail. Sometimes, it's just a matter of the right idea at the wrong time. Other times, it's management error that lead to the demise. But even when a company crashes and burns, a good idea will often rise from the ashes.

Now, that's not the story on the RETI homepage today. In this case, it's a story of maturing companies and technologies taking the next logical step. GATORs is proven technology, but BCE Emergis has already done much of the heavy lifting required to make it more Web compatible, and then tested it under heavy loads. Plus, it gives Fiserv access to all of the settlement services providers that jumped on the BCE solution to get access to Freddie Mac's lenders. A three-year contract is an easy way to gently disentangle the technologies without raising any hackles, though I would be surprised if Fiserv felt the need to extend the contract. This is pure conjecture, by the way. While I've visited at length with the folks over at Fiserv, including Patricia Jones, CTO for Fiserv Lending Solutions, they didn't disclose to me all of the reasons they made their decision.

They did explain how Fiserv has been patiently acquiring companies over the past three years and how this solution will tie everything together for them. For lenders who dream of an end-to-end solution but are terrified of putting all of their eggs in an unproven basket, I expect Fiserv EPC to be a compelling offering. But is this the right time or will this technology rise from a pile of future ashes? Only time will tell. But expect to read the story in RETI either way.

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December 6, 2004

How do you know if the technology firm you're working with has qualified people? CampusMBA has an idea that might help. It just graduated five Certified Mortgage Technologists. But anyone who wants to get that designation in the future will have to jump through some different hoops.

You can check out the CampusMBA site to find out exactly what the new rules are, but suffice it to say the designation will mean that the executive in question has really done his or her homework. I'm not sure what the most recent graduates had to accomplish to get their designations, but I know Chip Register. If he's an example of what the MBA thinks a top technology person is then they're pretty close to the mark. I've been writing about some of his exploits for quite a while now and have been very impressed by what his team at Netbank has accomplished.

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