In recent years, Offshore Delivery Centers (ODCs) have been functioning in a more evolved format by helping mortgage companies enhance their efficiency and performance. More and more lenders are turning to the ODC model and building dedicated teams that are still fully integrated into their business.
Research has shown that many companies with successful ODCs have reported over 10-15% improvement annually because of process innovation efforts. Even small to medium-sized businesses are thriving in this new global marketplace by harnessing the opportunities that ODCs can deliver. Around 59% of companies are offshoring and many companies have as much as 73% of their processing staff offshore. Developing ODCs is much simpler now and it offers legion benefits like access to qualified professionals, better communication, improvement in operational efficiencies, and improved competitive edge.
However, there are a number of factors you will have to consider, especially on the cost front, before you plan to set up your own ODC. Here are some details:
1. The Right Kind of Infrastructure
Once you set up an ODC, it will be an extended, integrated, and dedicated offshore facility that will exclusively manage your operations. Your ODC will primarily focus on delivering dynamic solutions customized to best meet your business objectives. So, the foremost thing is for you to identify your requirements and then think of an ODC infrastructure that suits these needs. To begin with, analyze what your business actually needs. Do you have a technical skill crunch and want your entire processing to be managed, and delivered by your ODC team? Depending on this assessment, you will have to figure out the investment associated with this setup.
Opting for the right model is important as it helps to manage the cost, range of responsibility, and project scalability. You will then have to build the infrastructure, teams, and processes taking into consideration the unique business requirements of your company so that there are optimum performance and productivity.
2. Building Domain-Sensitized ODC With Specific Teams
A strong domain-sensitized ODC needs to have teams with specific industry knowledge related to mortgages. Your ODC should have industry experience and knowledge about the tools and technologies to bring innovations to your business. This means you will need to invest in building the right kind of team.
There is also another option of leveraging ODCs that offer clients technology-enabled, secure, agile business services that can be plugged in to deliver business outcomes at scale. These will require minimal domain-specific training from you. Such ODCs hardly require any customization since the best practices are already in place. But you will have to see their evolvement in terms of process frameworks, governance measures, and escalation mechanisms.
3. Robust Technology
Your ODC will have to offer technology suitable to your business requirements, provide resources corresponding to it, manage the development cycle, and communicate about the project status updates, throughout. You will require to make the right kind of investments for a strong ODC. In today’s digital world, technology plays a key role in the mortgage industry.
4. Process Innovation
Traditionally, ODCs were created as organic extensions of the parent company and ended up replicating the exact process, as used on-site, at the offshore location. However, today a number of ODCs play a key role in innovation efforts from their own end. While they still focus on process replication, it is not limited only to that anymore.
Most ODCs are taking ownership of enterprise transformation by delivering innovation-led business outcomes seamlessly. However, this will again call for proper investment so that process innovation can take place in the right manner.
5. Regular Training and Upskilling
A few years ago, ODCs were mere extensions of the parent company, but they lacked teams with the same amount of proficiency and expertise as the parent company. Today, the situation has changed.
Modern ODCs employ highly qualified professionals with specialized skills. Their teams have exceptional expertise, multi-discipline skills, and years of experience. If you want to set up an ODC that has an edge, you will have to invest in regular training and upskilling of the ODC team. There will have to be a significant focus on operational training of the ODC employees as well for products and processes of your company to ensure high quality of deliverables.
6. Other Costs
While keeping in-house employees engaged seems like a must-do, teams at ODC are oftentimes left out. Employee engagement is an extremely significant aspect of the ODC setup. You will have to consider cost factors for these aspects as well. No direct contact with the parent company and its atmosphere can be isolating and even demoralizing for the remote employees. Regular, thoughtful communication and employee engagement activities are the best way to keep ODC teams involved.
In an economy where you as a lender have to be cost-conscious, forming an ODC is an effective way forward. An ODC offers more agility and delivers greater long-term value to the business than simply outsourcing. Leading mortgage lenders are openly embracing an ODC model because it helps them build longevity in the business relationship. To know more about Visionet’s services, visit – https://bfsi.visionet.com/
Visionet is a leading digital technology solutions provider for the BFSI and Residential Mortgage industry. We are passionate to deliver exceptional business outcomes to our clients leveraging deep industry expertise and proprietary mortgage technology products. We post our views on mortgage technology and industry updates through this blog.