CEO and President of Zia Consulting Shares Best Practices in Digital Transformation
AIIM on Air explores the methods, technologies, processes, and people on the frontlines of digital transformation in action. This blog summarizes my most recent podcast with Kevin Craine from AIIM International.
What is your advice for business owners, technology professionals, and executives that want to reframe tech strategies?
Get digital—that’s what AIIM is about! Not only do you need to get digital, you need to get there quickly and automate everything. Think hard about disrupting your business to get what you need out of your information management strategies. You have to act. Doing nothing is no longer a prudent strategy. Our legacy and technical debt is piling up. People are getting to a point where they are just shutting down applications to see what’s coming because they have 2,500 different applications and they don’t know what they do.
Zia took a different approach with customers over the last two years. We asked our customers to lean into the uncertainty, and look at five things they could do with existing applications or processes that would make a real difference for their business. We call these “The Five R’s”—replace, retire, rewrap, rehost, and redo. You can replace what you have, retire applications, or rethink them completely. You can also redo things, often called a Lift and Shift, and then rehost. Or you can rewrap, which means putting an API around old software and including it in your business workflow as an automated system.
It is important to remember that the approach can’t be fear-based. You simply have to start with an action. Do your best to learn quickly and get your projects moving rapidly. While it is nice to have a three to five year strategy, you can get lost there. Instead, break your work into six week to 90-day time frames. Start with what you are comfortable with and recognize that projects move in parallel.
We have had a lot of success, whether it is working with groups that are fully digital and want to clean up their data for better reporting, integrating marketing assets, or retiring legacy systems and quantifying risk. Regardless of your unique situation, you have to take action. Trust your team and look for experts that can help you think through the process. Leaders that take action see huge benefits. These same leaders and their companies have happier customers, leaner costs, and more sales. Even though they had tighter margins, they had more sales and higher EBITDA.
What does “disrupt your own business” mean?
To explain this, I will share an example from the mortgage industry. Think about how long it takes to get through underwriting. There are different kinds of customers. There are those that have a big down payment, credit score over 800, long credit history, and great income. Then there are those that have a 520 credit score and would like to buy their first house. Someone who is well established should be able to get through the process faster. They should be able to submit their application and breeze through the loan origination process very quickly. Think in hours or days, not weeks.
The problem is that most growth within mortgage companies is not organic; it is through acquisition. Each company that is acquired may have its own origination system. This makes standardizing on a single system or process very difficult and tremendously expensive. A way to disrupt loan origination is to target underwriting. Well qualified people, potentially 20-25% of the customers applying for a mortgage, could qualify immediately. With better automation, the system could actually push people who meet the requirements through quickly, while still satisfying governance and regulatory requirements and fiduciary responsibility imposed upon businesses.
Let me explain further what I mean about disrupting your own business. It is not about swapping out the loan origination system (LOS). Most businesses are digital to some extent, especially larger mortgage operations. They either use digital content or they have an established way of handling optical character recognition (OCR), capture, and extraction. Disrupting the business is about rethinking the process. They may have some robotic process automation (RPA) or workflow on the frontend of a system like Encompass, Black Knight, or a homegrown system. We redo the process by identifying the qualifying credentials needed for a qualified investor to skip to the end of the underwriting process. Then they can backfill the information needed to satisfy the underwriting requirements in Encompass or Black Knight. It’s a different approval process and quicker timeframe.
There are a couple significant benefits to disrupting the normal business process, including processing loans faster and increasing communication and satisfaction with all parties in the process. The challenge for a lender to disrupt and invest in automation is market driven. The mortgage market is affected when rates lower and when they rise. When rates drop, mortgage companies get bogged down with applications and can’t get people through the underwriting process fast enough. Imagine if 25% of those applications skipped the majority of the underwriting process because they met certain qualifications. Then, mortgage companies could focus on doing a thorough underwriting process for moderate and at-risk loans. This kind of process increases satisfaction for employees and customers. It also decreases employee workload, increases quality, and saves money. The 25% that get pushed through quickly will have a great loan experience. They will share their experience with others that would qualify for the quicker process. I’m not suggesting that we bypass the safeguards that are in place or ignore compliance and regulatory concerns. Instead, I recommend spending additional time with higher risk loans and streamlining the loan application process for highly qualified individuals. Automation can cover this and we handle compliance automatically.
How do we bring these kinds of efficiencies to the process?
Artificial intelligence (AI) has a strong role to play in the mortgage industry. For AI to work effectively, you need historical data on everything from applicants, expense verification, income levels, loan performance, etc. Luckily, we have a ton of data to review to train predictive models. In the example I gave above, you could write predictive models to estimate income and expense verification to determine which applicants to fast track through an approval process and which ones to push to manual review because of a higher risk scenario. The important thing is to remember that you need clean data and it doesn’t age well. Start cleaning up your sample data now because it can take 18 months to 3 years to get a business up-to-speed on AI initiatives.
Machine learning and computer vision models can dramatically improve this. The mortgage industry is very document intensive and changes all the time. At Zia, we have a mortgage solution that has over 300 pre-trained documents that help lenders find the information on a document, check it for completeness and accuracy, and process the information without human intervention. It allows loan officers to focus on the loans that have errors and manual tasks that either can’t be automated, or it would be very difficult to do so. This automation can be accomplished with lightweight workflow or RPA software. Once the information is digital and verified for accuracy and completeness, you can automate. For this to become a reality for your business, you need to commit to training people to have the necessary skill set, while continuing to focus on dev ops and modernization initiatives. Don’t miss the opportunity to get digital, rethink your business processes, and automate everything. I like to think about it like being on offense with the regulatory environment instead of responding to everything that is coming at you.
Can you share some opportunities to help firms build a competitive advantage?
What worked for Zia Consulting is a microcosm of what can work for larger organizations. Prior to the pandemic, we focused on grit and gratitude. This meant getting the right things done, while being grateful and generous along the way. When the pandemic hit, we had to put a bunch of people on the bench. This was not typical. Thankfully, we had enough resources that we did not have to cut pay or staff. At that point, I chose to focus on growth, connectedness, and innovation. I developed interdisciplinary teams with sales people, analysts, and more junior staff working together to solve problems in areas like insurance claims processing and benefits forms change analysis. We sell 19 different best-in-class products and we spent time rethinking how our partners could use their technology pieces together. We focused on applying what we had learned to using new technologies to solve problems differently than how we had solved in the past. The goal was to do it quickly, which was in three-week cycles. My only caution to other organizations is that you have to level the playing field. The entire team needs to feel like they can contribute equally.
My advice would be to explore everything from every angle. Read your analyst reports, listen to AIIM podcasts, and listen to other experts in the field. But don’t miss an opportunity to be in action. Organize teams that are heterogeneous in age, ethnicity, expertise, and views. Ask them to solve problems that matter to the business. Ask yourself what your customers really struggle with. Look at how you might have an impact. Sometimes when you get the senior people out of the way, you get incredible information from others. By identifying problems, we were able to pre-build applications and have them deployed through Docker. This goes beyond looking at what technology will work best by considering the process. We even went as far as to videotape some of our customers’ work environments. For example, when you see someone working on three screens, there is probably technology available that could help automate some of those processes.
How would Zia help an organization? What is an example of something that was successful?
We start with an assessment process so that we understand the problem. From there we build a three to 18 month roadmap using the Five R’s I talked about earlier. Our methodology is clear, simple, and scales from small to large projects. We focus on cloud modernization by getting people to the cloud in any way that is not bare metal or on a mainframe somewhere. This can be Azure, AWS, Google, or their own private system. We help people get rid of the complexities of data and data proximity. Then, we automate governance so their governance and risk mitigation strategy is a differentiating weapon instead of a laggard for the business.
One successful project we completed was to help an insurance company automate their mailroom. Before we helped them, it took them about 48 hours to receive a piece of mail, scan it, store it, deliver it, and work through the claims process. We got the process down to two to five minutes by retiring some old systems, rolling out new ones, integrating with cloud services, and rethinking their processes. Each piece of paper came in through a high speed scanner and went straight to the right person’s desk. Interestingly, the benefits are longstanding and powerful. There is the obvious cost saving, but paying commercial claims faster also reduced the likelihood of being sued. A project like this only takes a few months.
Our approach is pragmatic. We help improve something you already built instead of rethinking everything. How do you disrupt that? You focus on the unsolvable problems or biggest pain points. We call that a culture of winning. When a team has success at knocking something out of the park, they lean into the next difficult thing. Fail small, learn from it, and apply what you learned to the next successful thing. It’s all process related stuff. It’s the human side; there are real people behind big decisions. Be in touch with people and recognize that executives in their fifties are afraid of making large blundering mistakes around technology decisions. Focusing on that served us well during COVID and we continue to help people understand that there’s a process. We take it one bite at a time with a sane approach.
Where can people go to learn more?
Our team writes a ton. You can read our blogs here. Listen to the Digital Disruptive Podcast that ASG Technologies created before they were acquired by Rocket. It includes everything from human interactions to new technologies, and everything in between. If you read something, try to apply it.
What can CIOs, executives, and business owners be thinking about today to be prepared for the world in five years?
If you aren’t digital, you need to get there immediately. You have to be a digital business with high quality data that is stored and governed automatically. It is the fundamental platform for how you will make decisions around things like AI, ML, strategic insights, hiring, acquiring, and being acquired. Without it, your risk will go through the roof. That is table stakes to be here.
The next step is to embrace the notion of building diverse heterogeneous teams. Ask experts with great reputations and use a train the trainer approach with your team. Don’t waste time building a strategic plan that is not useful because you don’t know how to take action. Find people that can decipher a five-year technological strategic plan with the realities of retiring 25 existing applications and an aging workforce. Fail small and expect to learn, but don’t bet the farm on any one project. Manage up with the rest of your CSuite. They need to understand the difficulty of the problems you have around technology and humans. They need to lean in, learn, and push new ways of doing business.
We are passionate about understanding your business and providing the right set of tools to help you automate. Reach out to Zia to talk more about available technologies and a logical process to help you get digital fast. You can also read more about hyperautomation here.
ABOUT THE AUTHOR
Mike Mahon, President and CEO
Mike is a technology solutions entrepreneur with more than 25 years of content management experience in numerous verticals. He has proven to be highly effective at developing business units, software teams, and sales teams into high-performing entities. In 2022, Mike was inducted into the Colorado Titan 100 Hall of Fame after being recognized as a Titan of Industry for 3 consecutive years. As a Titan 100, he is known to be one of Colorado’s most accomplished business leaders, demonstrating exceptional leadership, vision, and passion. Mike sits on the Titan 100 CEO Board of Advisors, is a board member of the Colorado Thought Leaders Forum (CTLF), and participates in the Inc. 5000 Masters Group. These positions allow him to elevate business leaders and help them move from success to significance in their personal and professional lives. When he isn’t working, you’ll find Mike reading, coaching, mentoring, skiing, mountain biking, or throwing axes.