Dear Croal Dude Redux

Open up your minds and put on your safety goggles, ladies and gents. It’s time for the third infusion of Croal Dude’s words of wisdom and hope for the confused and the weary.

Dear Croal Dude: We thought our document imaging project would gain us some efficiencies. But for the most part it feels like we are doing our work the same as before and all we have done is add another step to the end of the process. Advice please, Oh Sage o’ the South.
-Johnny Boudreaux, Baton Rouge, La.

CD: Peering through my Who Dat crystal ball, Johnny, I see your dilemma and its name is backend, centralized scanning.

Embarking on an imaging project for the sake of “going paperless” is often a fruitless endeavor because nobody first asks the question, “How can we do our work better with imaging?” Our work starts at the beginning, not at the end. Scanning after the account is opened or the loan is closed has limited research and servicing benefits. All of the decisions that needed to be made based on the documents have already occurred. The three-legged stool to getting ECM/Enterprise Content Management done right consists of process, records management, and imaging.  When we get the process right, imaging and records management have no choice but to fall in line.

An ECM journey should begin with a cataloging of the current records inventory. Like shining deer at night, this will put a bright light on how the staff is already trying to use electronic records (aka document images) in their business processes. I have no doubt that, even with an ECM solution in place, you will find records on shared drives, records in Outlook folders, records in departmental applications, records on mobile devices. No wonder vinyl is making a comeback. These pockets of end-user-initiated and -designed “image-enabled processes” exist primarily because workers need images now, not after the deal is done.

Find these pockets and use them as opportunities to reengineer the process so that the imaging happens once on the front-end and that record is used for the rest of the work. (Speaking of classic vinyl, check out this cover of Black Sabbath’s Paranoid by Little Croal Dude and Pink Fang.)

Dear Croal Dude: We have everything Microsoft ever invented and three or four versions of each. How is Microsoft’s recent purchase of Nokia going to affect me and my bank?
-Bill Gator, Tallahassee, Fla.

CD: Billy boy, if you’ve seen me on my circa 2005 Motorola RAZR, you might not be asking me this question.

Microsoft needs two things that are intricately connected: a new CEO and something new and shiny that everybody wants but doesn’t even know they need yet. Living in a house full of i-thingies, it’s difficult for me to imagine that Microkia (I claim coining rights) thinks it can play in the U.S., handheld, P2P communications device game. Emerging overseas markets? Maybe, but, frankly, who cares what device little Liang is using to text little Fareedah. However, if Microkia introduced a payments device, now that would get my attention.

There has always been speculation that Apple would leverage its iTunes store of customers and payments data to do something big in mobile payments. Except for being able to melt down the gold iPhone 5S for a new grille, I was under-impressed with Apple’s recent phone announcements. Apple still has time to piece together all of its patents and acquired technologies and deliver a compelling mobile payments product. But what if Microkia beats Apple to it? For all its negative press, Windows 8 is just as easy to use as iOS or MacOS for the generation that did not grow up on Windows XP. Most Millennials have Microsoft accounts via their XBOX gamertags (in addition to or instead of Apple IDs). These Millennials also missed out on the debit/credit rewards programs offered to encourage usage and modify behavior. Microsoft just switched from points to dollars at the XBOX store, but you can bet that points engine is still intact.

Suppose Microkia introduced a cheap phone that could also be used as a contactless payment “card” tied to the Microsoft account? It could drive adoption by gamifying payments usage. By gamifying I mean pay for your Starbucks and Value Meals using your Microkia phone and earn rewards points to be used at the XBOX/Microsoft store to get the new Minecraft Herobrine skin. Or earn badges for every $100 spent and be the first to achieve the status of super elite. Instant volume. Just add geeks and teens. Hmmmm…

Speaking of geeks and Minecraft, check out this 100% undetectable trap. I can’t wait until this kind of creativity begins to seep into the workforce. My only concern is that we will stifle it with our legacy, hierarchical bureaucracies.

Dear Croal Dude: Like most banks and credit unions, we are struggling with managing our compliance programs related to fair lending, the Home Mortgage Disclosure Act and Real Estate Settlement Procedures Act, not to mention the ones that just came out of Dodd-Frank for Qualified Mortgage and Ability to Repay. Can you help me so I can get some sleep?
-E. Vedder, Seattle

CD: Sleep is overrated; give me a Texas Doughnut and a Quad Venti with Whip Cappuccino for dinner any time.

Compliance programs around lending, especially consumer and mortgage lending, are greatly enhanced with technology. And not just any old technology. The latest and greatest offerings provide a combination of data integrity, compliance verification and document management and form packages that all but eliminate the crap it sounds like you get and have to spend endless hours cleaning up. To save some room, I am just going to point you to Do You Stink @ Mortgage?  

The January QM and ATR rules are a blessing in disguise because they are keeping the Consumer Financial Protection Bureau occupied. As soon as that gets behind them, they will be hitting harder on Fair Lending and HMDA. The news is even direr for credit unions given loan portfolios heavily weighted to consumer lending. The bottom line is that if you are on a legacy consumer or mortgage loan origination system, now is the time to review and reengineer the loan delivery process. Like the Fram guy says, “Pay me now or pay me later.”

One rumination on Mortgage Loan Origination systems: It’s been heard on the street that Ellie Mae hired some suits to find a buyer. With D+H having acquired Avista & Mortgagebot and more recently Harland’s E3 (put a fork in it), I don’t see them needing another MLOS in the stable. FIS has Loan Origination Studio. Accenture owns Mortgage Cadence’s Orchestrator for its BPO business. And of course Fiserv has that beast of an MLOS called easyLender (cough-cough-choke) and it picked up nothing like an MLOS from Open Solutions. Just sayin’.

Dear Croal Dude: I am a leader in our IT organization. My biggest goal and hardest struggle is to be more innovative. What’s the word?
–Roy Williams, Chapel Hill, N.C. 

CD: Good question. I do enjoy a good academic read now and again. Sharing below.

Innovation is lacking today because we fail to take risks. Acquiring the competitor and what they innovated or blindly copying “best practices” is deemed less risky than charting our own course. A recent Harvard Business Review Blog Network post by Stikeleather & Sahoo lists the risks that I.T. leaders must understand and consider as:

• Decision risk: Paralysis by analysis
• Adoption risk: Responding too fast or too slow to trends without considering non-technical implications
• Execution risk: Not understanding the skillsets required to execute long running and over-budget projects
• Leadership risk: Fear of losing $100 outweighs hope of gaining $150
• Identity risk: Constraints placed by considering only current or known technology stack; a focus on project completion rather than value creation
• Cultural risk: An environment where failure is not an option, unwillingness to cut the cord on a project gone bad
• Reputation risk: Preventing experimentation for fear of brand reputation impact
• Measurement risk: Measuring things other than the goal of innovation, having goals that instigate behaviors counter to the desired outcome
• Opportunity risk: Applying resources in one area and not having them available for a better opportunity

 IT leaders need to consider all of these risks and do a better job calculating the overall risk/reward ratio of ideas, not projects. By the time something becomes a project, too many ideas have already been discarded for no good reason except they were deemed “too risky.”

To be innovative, IT leaders should live by these six truths.

• The failure to take on value-adding IT projects is worse than taking on IT projects that fail.
• A focus on acquiring gains will lead to better results than a focus on avoiding losses.
• Trying to preserve past investments delays value creation.
• Small IT failures provide great opportunities to learn.
• Failing fast and moving forward is a big win.
• IT creates risk by confusing leadership, governance and managing.

Saying that IT is “aligned with the business” is not leadership. Does your IT shop demonstrate how you are applying information technology yourself within IT? Only then can IT be taken seriously to influence and guide the organization to make right decisions and develop innovations. Innovation requires that IT apply governance mechanisms to direct and restrain, but not hinder and obstruct the use of information technology. Even if IT is not itself the primary source of information technology, IT must still monitor and manage the delivery and application of information technology to serve the organization. In other words, lose your pride. Good advice in any situation.

Croal Dude out.

Direct your Croal Dude questions to Michael Croal here.

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