By Keith Kemph posted 12-28-2023 11:27


How to Improve Your Odds of Successfully Implementing an LOS

by Mike McChesney, Principal, BlackFin Group

Recently I wrote a blog about mega projects and their astounding failure rates. While some of those projects aren’t always representative of an LOS implementation, there are some lessons we in the mortgage industry can learn from those failures. If, as my colleague Andrew Weiss has written recently, now is the time for you to consider a new LOS, you need to take a close look at what drives a successful implementation. Applying some of those mega project lessons can improve the odds of success in the implementation of a complex technology.

Here are some thoughts about how to approach such a project, starting well before you sign a contract. You could maybe even call them the 8 pillars of project implementation. 

1. Focus on implementation-select fast then execute slow. Get to the implementation without overanalyzing the evaluation and selection process. Get to a shortlist of vendors who fit your business model and culture. Most RFP’s have hundreds of individual requirements. 85% of vendor responses are yes to these questions, without answering how they satisfy the requirement. Apply the Pareto principle to identify the top 20% of your required capabilities and understand in detail how the vendor delivers those. This is the primary reason why BlackFin launched Tech Stack Navigator service. 

2. Avoid right to left, date driven scheduling. Develop an integrated implementation plan with your chosen vendor. Use realistic assumptions about time to deliver, work effort, and resource utilization and capacity. Plan aggressively but realistically. Project the cost/effort to get live with loan one and manage scope and phasing accordingly. Avoid the planning fallacy, a cognitive bias which refers to the tendency to underestimate the time, resources and costs required to complete a project, while overestimating the benefits and outcomes that it will produce. Understand that subsequent phases will need to balance delivery and new features/functions with ongoing operational requirements. Have a plan for post-production improvements, and include it in your business case. Have a plan for how you will manage these conflicting priorities.

3. Use your best resources, not just those who are “available”. Use your best SME’s and backfill operationally with available resources if they exist. Dedicate these resources full time for the duration of the project. Thinking that your best resources can work on this project part time while doing their day jobs is a prescription for failure. If this project is a key strategic organizational priority, why wouldn’t you use your absolute best SMEs on it? Make participation a highly visible, sought after role that has long term value to the organization. Be honest about your skills and skill gaps. If you have key resource gaps, how will you fill them? Do you have competencies in project management, process change, development, testing, change management? If not, how will you address those gaps?

4. Aggressively manage scope. In a recent LinkedIn post Patrick Leddin identified some interesting components of successful leaders. They push their teams to stop doing certain things, and avoiding these can increase your likelihood of success on an LOS implementation. Don’t try to do everything or fix everything – Define the organization's most important goals and make sure everyone understands their role in delivering. You can only have 1 number one priority so clarity on which goals matter most and who does what allows the organization to prioritize appropriately and understand which activities have to be stopped. you likely try to optimize everything. Don’t try to measure and optimize everything. Allow employees to be just ok at some things. Provide a clear set of measurable goals that everyone in the organization understands, including their specific role in achieving them. Think modularity, reuse, and iterative development and deployment cycles. Get into production and iterate from that starting point.

5. Ensure active and ongoing executive sponsorship. If this project is a top strategic priority, treat it that way organizationally. Regular updates and enthusiasm from executive leadership will align the organization with the goal. Ensure all executive leadership is invested in success, including aligning incentive comp with specific outcomes. Be visible and create evangelists who build enthusiasm across the organization. Understand that the implementation impacts will span functional areas from sales to servicing and involve all those areas in your planning and deployment.

6. Architecture beats feature/function. While feature/function is important, and must support your current and future operational model, it is essentially commoditized (see point 1 above). All major LOS platforms can originate loans in a compliant manner. Architecture determines how well the technology will support changes driven by market opportunities or changing business needs, supports integration of new products and services delivering competitive advantage, and allows you to swap out providers if that becomes necessary. Look for: modern API based integration capabilities, configurable task based dynamic workflow, ability to prototype and simulate application changes, low or no code base system, advanced data management and security, and established third party provider and partner integrations.

7. Partner with your vendors. Success is a win-win outcome, not a zero sum game. Any outcome other than both partners winning means both sides lose. Both sides need to be fully invested in success and need to have some (but not all) of their objectives and desired outcomes met through the relationship. Recognize where conflicts exist and explicitly confront and address those conflicts. Non functional requirements (performance, scalability, availability, reliability, recoverability, maintainability, regulatory support) vendor profile, and culture fit can be as important as price. In your contract, focus on key contract terms like delivery and payment milestones, SLAs for availability and incident response, cyber event notification and protection, named and committed resources and their continuity on the project and beyond. Perform a thorough review of their financials and their revenue model and funding. Analyze their pipeline. A strong pipeline is a good sign but could mean they will struggle to maintain focus on you and allocate the resources you need. Understand their roadmap and how that aligns with your long term vision. Is the roadmap funded or dependent on securing new customers?

8. Business case assumptions are just that, and benefit assumptions (cost reductions or increased revenue) are difficult to track and attribute directly to the LOS. Accelerate time to value and understand that capturing benefit from process and efficiency improvements takes time, especially if you are changing your process with a configurable, task based workflow. Assigning revenue and growth benefits to the project as other business changes occur at the same time is difficult. Many organizations struggle with assigning benefits specifically to the LOS changes, so don’t over think this. Keep the strategic objectives in mind. Understand that the business climate changes as you execute your project so you will likely need to revisit your assumptions along the way. The longer your timeline the more important this becomes.

Successfully implementing a complex technology like an LOS requires a constant focus on key success factors. From selection and planning through implementation and post go-live, there are steps to take which increase the likelihood of producing the desired outcomes. Applying lessons learned from similar, successful projects, (as well as from painful, high profile industry failures), can increase your odds of success. 

Mike McChesney, is a Principal Consultant with BlackFin Group in the Mortgage and Banking Technology Practice. Prior to BlackFin Mike served as CIO of Top Ten mortgage lenders, led many ‘first of a kind’ innovations, Executive Director of at Servicelink, CIO of Planet Home Lending, CIO of IBM’s mortgage outsourcing business and Director in KPMG’s Consumer and Mortgage Lending practice. For more information contact

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