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28 | M R EP O RT FEATURE Commercial & Specialty Lending Commercial Real Estate Treasury Management Know-how that wastes no time moving you forward. manage expenses without sacrific- ing any business-critical functions? Considerations C ompanies must ask them- selves, first, what is the ap- propriate level of service for both internal and external customers. Then, what are the areas of service where we can scale back and save? When finding the answers to these questions, it's important to know where you can save and where you can't. Some costs are fixed, like vendor contracts, hardware depreciation, and the amortization of capitalized projects, etc. However, there are areas you can control to keep your IT spend in check while still providing the appropriate level of IT service and innovation. There may be service levels you provide that can be scaled back. For example, an after-hours help desk can be scaled down to business hours. You also can cut down on the number of projects you work on at a time or scale back on project requirements and focus on the most critical initia- tives. Priorities will be different for every business, so you must understand your company's strate- gy and priorities. Offshoring also helps keep costs down while maintaining a similar level of service. Not every orga- nization will be open to this, but it's worth exploring when trying to extend your tech budget. Some companies have a "do as I say and not as I do" approach when it comes to outsourcing. They offshore resources but don't always permit their third parties to do the same. Consider working with your partners to see if there are ways to satisfy their security concerns while also reducing your costs. Accelerating your digital trans- formation also can help cut costs in the long-term. While it is a large investment upfront, mod- ernizing mainframe and/or legacy systems also reduces costs and complexity that in today's technol- ogy age are unnecessary. Another approach to cost-cut- ting is zero-based budgeting. Zero-based budgeting essentially forces organizations to justify all expenses for each new budgeting cycle. No expense is automatically approved for next year's budget. It's a time-consuming process, but it makes organizations look at every line item in their budget and decide what stays and what goes. Looking Forward and Thinking Critically T he bottom line is IT costs are not decreasing. However, even during the "good times," it's important to understand how to be flexible and make the most of your IT spend. Also increased automation, which often leads to increased IT costs, must be offset by reduced overall operating costs. Especially now, as the mortgage market experiences challenges, it's time to take a closer look at how you can be the most effective with the budget you have. GEORGE REICHERT is the Chief Information Officer at Enact Mortgage Insurance, where he leads the ongoing transformation of Enact's Information Technology strategy, including organiza- tion, process, innovation, and technology. The statements in this article are solely the opinions of George Reichert and do not necessarily reflect the views of Enact or its management.