When folks ask me this question, I give the same answer that I give to many other questions: fix your business process! Creating a more effective business process is probably the best way to reduce costs for any organization. There are many ways that a revamped process can help reduce costs, but I'll outline just a few here...
- Cutting out redundant activities. When an organization doesn't have a clearly thought-out process, its people tend to repeat a lot of the same tasks. Time is money so, if you're spending your time repeating the same things, you're losing money!
- Preventing lost business. Why do most people choose not to get their mortgage from a particular organization? Some may say that it comes down to the rate but, in my experience, it's almost always about unmet expectations. Things are communicated to the consumer that the originator is unable to deliver on. And why does this happen? Typically, it's because of a breakdown in internal communications. A better process can solve this problem!
- Reducing employee turnover. Having an ineffective process can provide a great amount of stress on employees. Lack of accountability and miscommunication can lead to a great deal of strife. When that happens, you have the expenses of constantly hiring and retraining. If you fix your business process, though, you'll likely go a long way in fixing your culture.
When I meet with leaders in the mortgage industry to discuss how they might go about improving their organizations, there is one question I always get: what can we do to save money? In the mortgage business, competitive pressures can make it difficult to gain a competitive advantage with higher revenues. If, however, we can find innovative ways to save on costs, it can be much easier to maximize our profitability.