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What To Consider When Outsourcing

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It is commonly known that business process outsourcing is an ideal tool to help manage back office processes. This is especially true for the process-intensive real estate industry. For lenders and title agents, outsourcing reduces and flattens operating costs, allows for rapid adjustments to market fluctuations and helps maintain competitiveness in changing market condition. In short, outsourcing makes good business sense. However, the success of any outsourcing arrangement is contingent on partnering with the right business processing outsource provider. In this post we look at four key areas you should consider when choosing an outsourcing partner.

Expertise & Location

Business process outsourcing firms are abundant and offer services that range from order fulfillment to invoice processing. Their business model is based on volume and speed. As such, to maximize volume, many outsourcing providers offer a wide range of back office services for multiple industries. The result – providers that are jacks of all-trades and master of none.

To gain the most from an outsourcing partnership, title agents and lenders should seek out those providers that are “masters” in the processes applicable to the real estate industry. A provider who primarily services the real estate industry, or better yet specializes in the industry, will have greater understanding of the industry’s unique processes, needs and lingo which will result in faster set up times, less training, better communication, high quality work product and ultimately an around more beneficial partnership.

The provider’s processing locations should also be taken into consideration. While some providers offer only off-shore processing, a number have facilities both on-shore and off-shore. The ability to process on-shore may be important for processes you plan to outsource in the future.

Security & Controls

By its nature, outsourcing requires the transfer of data between partners and is some situations may even include third parties. With the increased scrutiny and oversight of the US real estate industry, assuring that your data is secure and properly handled through all aspects of the closing process is mandatory. How will data be transferred between partners, how will data be stored, what controls does the provider have in place to secure data when processing, is data ever converted to paper at any point in the provider’s process, who has access to the data and how is data destroyed are just a few of the questions that need to be answered to assure the security of your data.

There are a couple of certifications that you can look for that will help you narrow down which providers offer the appropriate security measures and could be viable partners. ISO 27001 and SSAE 16 certifications are third party certifications that attest to the fact that the provider has an Information Security Maintenance System and has in place the appropriate controls, policies and procedures to ensure the security of your data.

Quality Control

It goes without saying that the provider’s quality control procedures should be thoroughly reviewed and understood. As your partner, you have to be able to rely on the quality of provider’s work product. While spot checking should be done from time to time, checking every returned file will quickly erode the time and cost savings you are seeking to achieve through outsourcing.

Technology

Finally, much consideration should be given to how the provider’s work product will be returned to you and integrated into your workflow. Does the provider have the ability to work directly in your LOS or title production platform, will the provider integrate their platform to yours or will data be transferred by a separate file which you will upload to your platform?  Does the provider have the technical expertise to return to you a final work product that can be integrated into your workflow with minimal effort and cost to you?

Deciding on an outsourcing partner should not be done in haste or based on price alone. The partnership you form today can have a positive impact on your business for years to come. By taking into consideration the four areas discussed above you will be on your way to identifying the ideal outsourcing provider for that partnership.

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