Corporate Profile – A Q&A with WNS Global Services -- July 2007 (Also appearing in the MBA Tech NewsLink)
During the last seven years, the value-added adoption of business process outsourcing (BPO) has become an operational requirement within the mortgage industry. Once considered a specialization dominated by offshore startups, it has rapidly evolved into a collaborative business model able to adapt to business cycles and complex operating requirements. BPO has emerged as one of the top tools to improve efficiencies, leverage best-practices, and achieve operating “scale.” Furthermore, enhanced BPO definition and implementation practices have removed the historical barriers-to-entry that previously benefited only the largest of the industry players.
So who are these BPO providers and how can a mortgage organization take advantage of these services? While there are numerous methods to promote alignment between buyers of BPO services and industry providers, they all share common goals of quality of service, collaboration, incentives, and of course performance metrics. However, these generic advisory benchmarks must be tempered with depth of provider subject matter expertise, number of processes managed, and the ability to quickly adjust to business demands for an industry in transition.
Within the mortgage industry, WNS Global Services (www.wnsgs.com) has become one of the leading BPO providers with significant industry expertise and solution offerings. To further understand their capabilities, we spoke with Arijit Sengupta, WNS’s Executive Vice President, Banking, Financial Services and Insurance.
Dangelo: “What are the three key challenges facing the mortgage industry during the next 18 months and how can your organization mitigate these risks, while creating a collaborative operating arrangement with customers that is sustainable and able to change with business demands?”
Sengupta: “First of all, those of us with industry experience clearly understand the cyclical nature of the mortgage business including the influences from the Federal Reserve, consumer sentiment, and availability of investment capital. To combat this challenge, our collaborative client model allows organizations and executives the ability to smooth out these inherent highs and lows, while taking advantage of our proven economies of scale, extensive process expertise, and operational skill sets. Secondly, we believe the uncertainty surrounding interest rates will result in lenders feverishly trying to find the right mix of consumer products and services to sustain credit quality and volumes. However, they must balance this with their internal ability to define, roll-out and support needed market changes. By using a global and experienced BPO provider, the WNS teams can rapidly assist our clients with go-to-market changes and back-office improvements. Finally, a lack of technology within mid-sized lenders has resulted in a paper-based legacy processing nightmare. For WNS’s clients, proven technological ‘e’ based processes honed to customer requirements have resulted in significant operational gains.”
Dangelo: “Why should customers or prospects place your firm at the top of their ‘short-lists’ when evaluating mortgage solutions?”
Sengupta: “I and my management team have created a delivery culture that permeates the organization from top-to-bottom. Our proven market track record and extensive domain expertise create an unmatched differentiator among our competitors. Supported by our collaborative alignment and transition frameworks, our clients are assured of service quality, risk and disruption avoidance, and a partner who understands their pressures. In an industry where success yields more success, organizations reviewing WNS can quickly recognize our contribution to client’s though our growth in sales, personnel, locations, and competencies within mortgage processes.”
Dangelo: “What are the top two lessons learned that your organization has experienced since the start of 2007 and how can mortgage decision makers take advantage of this experiential learning?”
Sengupta: “In 2005, the initial timeframe for positive ROI required within BPO arrangements ranged between one to two years. Today, with the market turmoil and downsizing pressures, these parameters have been accelerated to under 12 months. For example, WNS was successfully tasked by a lending client to guarantee their ROI targets across 46 distinct processes and 150 personnel within six months. This lesson is one that will be faced increasingly by mortgage providers as the business demands of our clients are accelerating. The second major shift, sometimes contrary to popular press, is that BPO is not singularly about cost or labor arbitrage. The mortgage industry is growing concerned on two fronts – investment avoidance and scalability. For WNS, there is a confirmation that domain expertise, technology, strategic offshoring, and process compartmentalization of core and non-core processes, which creates significant efficiencies and faster ROI’s (as compared to those who concentrate strictly on transaction costs).”
Dangelo: “With the generic outsourcing markets considered “mature,” what innovative markets are developing through which clients should consider your firm a leader?”
Sengupta: “To date, the BPO industry has been performing specified processes in a rules-based manner, particularly in the offshore arena. The ability to perform knowledge based tasks, including risk management, statistical and risk modeling, underwriting, and research & credit analysis is a growing focus within the offshore outsourcing industry. Previously these processes were performed in a vertical organization or captive context -- now they are now emerging as the next step on the value chain for third-party providers. WNS is a leader in the knowledge process outsourcing (KPO) services including title insurance, underwriting, servicing and secondary marketing to offshore locations.”
Dangelo: “What advice can you offer firms struggling with ‘where to begin’ when considering outsourcing or knowledge processing solutions?”
Sengupta: “Depending upon what business benefits are being sought and the discipline and rigor within the client organization, this advice could fill several books. However, there are ten foundational items that must always be addressed:
- Define how BPO will enhance your competitive positioning,
- Understand how customers will perceive the shift to a BPO model,
- Identify the key regulatory issues to be addressed,
- Determine the impact of offshoring on internal skills and capabilities,
- Define the migration and governance models that align with corporate culture,
- Conduct due diligence on any partner including their alliances,
- Define clear measurements and metrics of performance and quality,
- Address scalability, BPO, and compliance requirements,
- Define continuous improvement and pricing incentives to make the arrangement adaptable and sustainable, and
- Clear contractual obligations using SLA’s and OLA’s.”
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