The market continues to evolve, lenders are under constant pressure to re-think their business models in order to compete with each other and new market entrants. With new regulatory demands, changing customer needs, plus the challenge of reducing operating costs and ensuring operational efficiency, outsourcers must be in a position to help lenders meet the dynamic market challenges. We are seeing increasing prod­uct and service diversification, as well as new innovation launching into the market, as lenders strive to differentiate themselves from the competition.

Working with the right outsourcer can be transformational, enabling clients to access new funding, progressive technology, smart processes, market insight and operational expertise along with the assurance of predictable costs. Outsourcing must be a partnership arrangement which allows lenders to be released from non-core back office processes and to focus more on their market and customers.

Outsourcing can also remove barriers to growth, provide better cost management through closer alignment of operational costs to either reducing or increasing loan volumes, whilst addressing the demanding challenge of managing regulatory changes and compliance. A third party service arrangement can help secure new funding arrangements providing warehouse funders with a more ring fenced approach and greater security over assets.

Loan servicers must be agile enough to adapt quickly to market requirements and undertake multiple roles including acting as a partner for non-core or closed portfolios, as a standby servicer and process consultant or as a manager of defined stages throughout the customer lifecycle. These are all enablers that help lenders manage risk, diversify and adapt to the changing market conditions.

Facilitating new lending

For start-ups or for established lenders moving into new product areas, partnering with an outsourcer can keep market entry costs low by reducing fixed cost overheads such as staff, IT systems and premises along with investment in key servicing infrastructure.

As the lending operation grows, there should always be the option that some or all elements of these functions could be brought back in-house and the reliance on the third party administrator scaled back. This approach enables new entrants to focus on growing their business and controlling costs. By working closely with clients from inception the outsourcer gets to understand the DNA of their client’s business objectives and brand.

One recent example is new lender Castle Trust, coming to market with a new business proposition designed to unlock the UK market for both investors and home owners. Castle Trust chose Target as a key supplier to help them launch their new partnership mortgages. Key to Castle Trust’s decision to outsource to Target was our track record of working with new start-ups and the adaptability of our loan processing software and service model to support new product innovation.

We have also been appointed by a number of lenders who have sought a service partner to support the on-going management of their loan portfolio, but also with the ability to support the launch of additional loan products in the future. As the initial portfolio and balance sheet has continued to grow, these lenders have become confident to diversify into related markets and drive organic growth.

A case study: Servicing a diverse multi–product portfolio

Our client, a large financial services business with a proud heritage needed to seek ways to more efficiently service its existing multi-product portfolios. Our client took the business decision to outsource portfolio management to Target consisting of residential mortgages, commercial mortgages and equity release products.

The business quickly needed a highly skilled outsourcing partner with experienced people, efficient processes and a single software platform capable of servicing multiple product types in order to ensure a seamless and fast transition period. Minimal disruption to their customers and portfolio performance was of paramount importance.

Working with an outsourcer with a track record in multiple product portfolio management was key in their selection criteria as was a provider who would become a guardian for their brand and reputation.

Service migration was achieved within 12 weeks, without impact on customers.

Transforming operational efficiency

Equally as beneficial for existing market players in this changing landscape is the ability to increase operating efficiency through process change and increased automation. At the very least, outsourcers should perform back office tasks efficiently, therefore reducing the need to increase headcount and ensuring leaner processes are deployed effectively.

Taking this further, more sophisticated systems and processes can be harnessed over time in a continual improvement programme which can deliver operational and financial benefits back to the lender but also reduces the need for additional capital expenditure. This approach can be useful in preserving valuable investment capital normally swallowed up by in house IT and service operational infrastructure and resourcing needs.

However, quite often lenders want to maintain ownership of key elements of the customer lifecycle, for example, originations. The optimum model here is to deploy a shared service utilising the same processing platform. This hybrid model provides all parties with consistent and current data, business intelligence support enabling informed decisions, process efficiencies and seamless hand-offs between the outsource partner, the lender and back again.

From the initial on-boarding of portfolios to the servicing platform itself, the need for flexible and efficient software enabling experienced people to perform at their best will be­come even more critical for ensuring a successful outsourcing partnership.

At Target we place the lender’s customers at the core of the service. Progressive systems should deliver a single view of all customer relationships. By bringing together all products held by a customer reduces risk, identifies cross-sell opportunities, aids process efficiencies, and enables effective and intelligent customer service, all key elements that need to be consid­ered by any growing financial services business.

Agile software

In 2011 a new and ambitious change programme began at Target. The Agile framework was chosen to provide a new set of tools and techniques to further improve new software delivery – the enabler of transformational business process outsourcing for our clients.

A significant investment in Agile training and coaching from expert consultants was made – all designed to continually improve the software development process, exceed client expectations and deliver better commercial results.

The objectives of the Agile programme were:

1.      To refine the organisation and change how client and supplier work to improve client satisfaction.

Even greater flexibility is now built into the DNA of Target’s working practices. This enables the client to re-prioritise and the team to respond effectively.

2.      To improve and energise the team.

Understanding and communication between colleagues has improved. There is greater visibility of individuals work, interdependency and output. Ownership, accountability and responsibility are devolved.

3.      Improved commercial performance.

The delivery of results has accelerated considerably. Processes are optimised, work is re-used more effectively.

The three essential elements required to deliver success were identified as:

i.            Strategic leadership and evangelism

ii.            Establishing new organisational structures

iii.            Improved operational practices

New practices were introduced following structured training. This ensured Agile became embedded and refined to build in-house capability. A commitment to quality and continuous improvement was reaffirmed adopting the CMMI (Capability Maturity Model Integration) framework.

Agile development case study project

Project X is part of a multi-million pound mortgage outsourcing contract for Target. Applying Agile development to this project was bold.

The results so far have been impressive. After 10 months, 23 sprints are complete within 100 per cent of expectation in both time and budget. The project was delivered on time and within budget last month.

The behavioural changes have been significant. Improved communication, improved understanding of tasks and their relationship to other colleagues work makes each team member more accountable for their work, deadlines to complete, and the quality standard demanded by the group.

Commenting on Target’s approach to Agile, John Wright, lead consultant at Indigo Blue, said: “What sets Target apart is the staggering pace of change driven through their development teams. They have embraced Agile. They have ambition and drive and are really going for it.”

James Rudolf, managing director of Target, commented: “The teams have responded with professionalism and energy. At our 2011 staff conference I asked the team to embrace change, make a difference, get involved positively. The team has risen to this challenge. We’re continuing to improve, we don’t stand still.”

Reducing costs

Third party servicers should be able to provide flexible, tried and trusted processes, progressive tech­nology and specialist staff, also predictable, controlled and proportionate service costs which removes the need for additional capital expenditure and inward investment by the lender.

Target can provide lenders with the benefits of economies of scale being a ‘one-stop shop’ for the most efficient, tried and tested lending applications. Satisfying all service needs under one roof reduces the lender’s total cost of ownership.

On top of reducing costs an outsourcer can add value to client processes and also remove the burden of regulatory changes. An outsourcer removes the need to employ a separate technology provider and avoids the risk of building or buying software from scratch, along with the cost and time it takes to bed in a new system.

Control your portfolio and control the outcomes

Fundamentally, maintaining the right level of control and oversight is key. Although, quite often lenders will want the servicer to take on the burden of non-core business lines and free up management time for other more strategic business areas.

Lenders will still want to exercise the appropriate levels of governance and therefore servicers need to be accountable for the administration of the loans and provide sufficient transparency across their operation.

From recruiting high calibre client service and operational teams, to applying proven processes and technology, all these combine to ensure lenders can outsource with assurance and confidence of delivery and on-going effective performance from their service partner.

It is critical to have easy access to accurate MI to enable financial and service performance monitoring. Access to highly specialist financial accounting and expert portfolio analysis can enable lenders to maximise loan book performance.

All focus must be to equip clients with the data and insight to enable better decision making and to retain a higher level of control of the strategic direction of the portfolio and desired financial outcomes. This can be particularly true of strategies around the packaging of assets for a current or future sale or to support other divestment strategies.

To ensure success, outsourcers must be flexible to adapt to the evolving needs of lenders to diversify, innovate and retain their competitive edge. They must have the flexibility and not be afraid of wearing multiple hats – be it launching a new lender or product, providing a standby servicer agreement, outsourcing specific elements of the process, or providing a full end to end outsource service, all are of equal importance to the lender.

They must continue to invest in technology, recruit and retain experienced professionals to effectively deliver great service and improved portfolio performance which means more cash collected, better customer service and improved client profitability.

For outsourcers the challenge is to drive for greater efficiency and flexibility, whilst still delivering the defined customer experience and the client’s business objectives.

source: http://www.mortgagefinancegazette.com/features/outsourcing-to-an-agile-framework/

Chinese premier Wen Jiabao on Wednesday urged further openning up of China’s service industry and encouraged private and foreign investment in this sector.

The premier said China would continue to promote the industry extensively, and invest in skills training, especially in key sectors which would be vital in attracting overseas direct investment into China.

He added that China would also continue promoting the export of those service skills in key sectors overseas. China will expand areas in service industry that are open to FDI, he said in an anouncement.

During China’s 11th Five-Year Plan (2006-10), the country’s financial services, retail, hotel, transport, tourism, logistic, culture, animation, e-commerce and other emerging services industries and new format industries grew rapidly.

The service sector is reported to have created 5.79 million jobs each year, and provided 34.6 percent of all new jobs.

Speaking at the inauguration of the 4th China Sourcing Summit, Wang Chao, vice-minister of commerce, emphasized the importance of the country’s outsourcing sector, and its benefits to the Chinese economy.

He said that it currently makes a significant contribution to the economy, and that the government will continue to support a number of leading enterprises involved in the sector, especially in their efforts to attract overseas business.

"The Chinese government certainly encourages leading service enterprises to compete overseas, and will ensure a secure environment for intellectual property and information protection here," he said.

He added, to help boost the industry, the government has promoted a number of initiatives, including offering tax incentives and improving related training programs for outsourcing companies, while identifying 21 cities as outsourcing ‘models’.

In 2011, the contract value of China’s service industry was $32.39 billion, up 63.4 percent from the year of 2010, according to the Commerce Ministry.

The latest figures showed that from January to August, Chinese enterprises completed contracts worth $26.9 billion, up 54.7 percent year-on-year. Those contracts worth $18.7 billion were from overseas, up 48.4 percent year-on-year.

"Service outsourcing contributes to the shift in China’s economic growth model and the upgrading of China’s foreign trade in an innovation-led economy," Wang added.

The rapid growth in exports of service skills has also made up for the slowing growth in manufacturing, he said.

Industry figures show that in 2011, the growth rate of China’s service outsourcing was 40.1 percentage points higher than that of goods exported, which saw a year-on-year growth of 7.8 percent in the same period.

source:

http://www.chinadaily.com.cn/cndy/2012-09/27/content_15785936.htm

In the previous “How To” tutorial, I demonstrated how to display table with alternative row styles using PHP and CSS. (View Topic: How to create a table with alternative row style using PHP? The previous tutorial displays around one hundred randomly generated numbers in one table.) I will use the code from the previous material to demonstrate how to create paging using PHP.

Step 1: Display a part of the $tblData array. The array contains 100 randomly generated integers. The code below will look like figure 1.

$self = $_SERVER['PHP_SELF'];
$offset = 0; //lowerbound
$limit = 10; //number of rows displayed
// insert more code here in step 3
$bound = $offset + $limit; //upperbound

//create array with 100 randomly generated integers
for($i = 0; $i < 100; $i++)
	$tblData[] = rand();

echo "<table width=200 >";
echo "<tr><td>Array Index</td>";
echo "<td>Random Numbers</td></tr>";

while($offset < $bound)
{
	echo "<tr class=".(($offset & 1)? 'odd':'even');
        echo " width=60>";
	echo "<td>".($offset+1)."</td>";
	echo "<td>".$tblData[$offset]."</td>";
	echo "</tr>";
	$offset ++;
}
echo "</table>";

Figure 1: display the first 10 elements in $tblData

Step 2: Generate Page Numbers
The code below would display the page numbers and generate url links (view figure 2).

//get max pages
$maxPages = ceil(count($tblData)/$limit);

//display the page number with link format ?page=1
for($i=1; $i< $maxPages; $i++)
echo " <a href=\"$self?page=$i\"> " .$i." </a> ";

Figure 2: Display Page Numbers And URL

Step 3: Shift Data Displayed
Notice from Figure 2, even though I have generated the page numbers with their relative url, the data is still the same as from figure 1. So to shift the data displayed when click on a different page, the following code is needed.

if(isset($_GET['page']))
{
	$page = $_GET['page'];
	$offset = $limit * ($page - 1);
}

Now we have a simple php paging system. So to put it all together!

<html>
<head>
<style>
.odd{ background-color:#CCC;}
.even{ background-color:#EEE;}
</style>
</head>
<body>
<?php
$self = $_SERVER['PHP_SELF'];
$offset = 0; //lowerbound
$limit = 10; //number of rows displayed

if(isset($_GET['page']))
{
	$page = $_GET['page'];
	$offset = $limit * ($page - 1);
}

$bound = $offset + $limit; //upperbound

//create array with 100 randomly generated integers
for($i = 0; $i < 100; $i++)
	$tblData[] = rand();

//display array in a table
echo "<table width=200 >";
echo "<tr><td>Array Index</td>";
echo "<td>Random Numbers</td></tr>";

while($offset < $bound)
{
	echo "<tr class=".(($offset & 1)? 'odd':'even');
        echo " width=60>";
	echo "<td>".($offset+1)."</td>";
	echo "<td>".$tblData[$offset]."</td>";
	echo "</tr>";
	$offset ++;
}

//get max pages
$maxPages = ceil(count($tblData)/$limit);

//display the page number with link format ?page=1
for($i=1; $i<= $maxPages; $i++)
echo " <a href=\"$self?page=$i\"> " .$i." </a> ";

?>
</body>
</html>