Joe Iafigliola Utilizes Big Data in Vendor Management
The April issue of DS News featured an article authored by Joe Iafigliola, Safeguard’s vice president of vendor management, titled Using Big Data to Optimize Vendor Networks.
USING BIG DATA TO OPTIMIZE VENDOR NETWORKS
Flexibility and agility are the best tools of a field services provider
Changing markets require companies to adapt with agility and speed, or they will be left
behind as others adjust and take advantage of the situation. For example, consider the
photography industry. Everything from cameras and film, to how people consume
pictures changed with the advent of digital photography. However, some industry
leaders didn’t see how the world was changing around them. Their inability to
acknowledge the digital wave and its impact on photography contributed to their
demise. And, once they finally accepted digital was more than a trend, their
competition was already firmly seated in the very market they had dominated for years.
This scenario plays out in every industry every day. The field services arena is no
different. As the industry matures, players need to be aware of how the world is
changing around them, what is driving this change, and how to remain relevant.
Changes seem to be coming from all directions. Today’s regulatory environment is
continually evolving with new federal and state oversight. Local municipalities also
are enacting new ordinances and property registrations to deal with a shrinking tax
base and the glut of vacant properties that dot the landscape. Shifts in the market are
changing the way field service companies look and function. A couple years ago, many
field services companies worked from static reports. Now interactive visualization is
used to create graphic illustrations of information to help companies better manage
everything from compliance to workforce management.
They say necessity is the mother of invention, and nowhere is this truer than in the field
services industry. The industry is in a transition era. It’s being reshaped by the
influence of strong economic, regulatory, and market forces; but the industry is also
agile and is adapting at breakneck speed.
Investments in business intelligence, technology, and quality control are spurring
innovations that were never thought of a couple years ago. These innovations are
having a significant impact on the ability to manage the boots on the ground—the field
services vendors who are working in our neighborhoods as the eyes and ears for
mortgage servicers.
APPLYING DATA TO FOSTER BUSINESS AGILITY
Field services companies gather millions of data points into their systems every day
from internal and external sources. Many are turning these nuggets of intelligence
into actionable information that can maximize the efficiency of complex vendor networks,
such as ensuring the correct number of vendors needed for each geographic region is
recruited and those vendors have the necessary skill sets. Each time an order is
completed, information is gathered and used for future analysis. For example, property
condition reports and on-time order completion can be analyzed to determine
contractor performance by geographic region. Work orders then can be allocated
based on performance history to continuously improve the quality and timeliness of
services provided to clients.
Data analytics also is being used to help clients make informed decisions about millions
of vacant, defaulted, and foreclosed properties across the country so they can
proactively address property issues, cutting down on ordinance violations and neighbor
complaints and eliminating blight. Safeguard Properties, one of the largest field
services companies in the United States, reports 15 to 20 percent of the defaulted
properties it inspects eventually become vacant or abandoned by their owners.
Mortgage companies are in a classic Catch-22 when it comes to vacant properties in
their mortgage portfolios that have been abandoned by their owners but have not
gone through the foreclosure process. Failure to identify and secure abandoned
properties in a timely manner can expose these properties to vandalism and
deterioration. On the other hand, securing a defaulted property in error, believing it
to be vacant, can expose a mortgage servicer to potentially significant financial and
legal liability.
Assuring inspections are thorough and inspectors proceed according to the most
current status of the property is critical. Field services companies that are able to
store and access a property’s data history, such as property status, color, siding
material, and architectural style, as well as the number of garages a home has,
can improve the quality and accuracy of inspections.
But data can be misleading or drive the wrong decisions until it is turned into
information. By integrating current data with historical data, predictive analytics
can be applied to help identify trends and patterns to create agility in services and
network capacity to meet changing market and client needs.
Today business intelligence has shifted the focus from having a simple overview of
what’s going on to now being able to deploy the data to discover causes, effects, and
solutions. But it all starts by asking the simple question: “What do we need to know?”
And then using data and technology to produce sound information to answer it.
INTEGRATING DATA AND TECHNOLOGY TO OPTIMIZE EFFICIENCY AND LOWER COSTS
The key combination necessary to grow and prosper in this new business landscape is
the ability to integrate the millions of data points and turn them into intuitive displays of
information. In fact, Gartner has forecasted an increase in information technology
spending in 2014 that will reach $3.8 trillion. Strategic investment in technology is the
real game-changer with expenditures in mobile technology leading the way. No longer
must a vendor be tied to a desktop or laptop to upload reports and photos. Advances
in wireless communication have severed the land line and offer vendors the freedom
to complete their work anywhere.
As consolidation in the field services industry continues, more emphasis is being placed
on efficiency, especially in managing vendors—the boots on the ground. Order
workflow has taken on a strategic focus as technology is allowing decisions to be made
at the property level. Heat maps that visually plot which contractors in an area have
extra capacity help to determine where work orders should be funneled. Supply chain
network designers utilize this information to determine where to issue work orders and
to which vendors. This information is overlaid with vendor quality results to determine
optimal order distribution. It also can alert to the need to change order flow and work
distribution to another vendor, if for example, a vendor runs into a capacity issue
related to a significant amount of work at a property and needs additional time before it
can take another work order. Data analytics and heat maps can identify the next best
choice and route work to a different vendor. Distribution of work orders verified by data
analytics reduces time loss, leading to faster response times, improved compliance,
higher quality of work, and ultimately, reduced costs.
For clients, this efficiency also translates into a higher return on their investments in the
form of lower field service costs. As banks place more and more emphasis on
reinvesting in vacant properties and getting squeezed by compliance burdens, field
service companies need to be cognizant of this new dynamic and savvy enough to
integrate data from the field with technology to create processes that optimize efficiency.
SELF-AUDITS: IMPROVING PERFORMANCE AND SATISFYING REGULATORS
Although market conditions have evened out as the country appears to leave the
financial crisis behind, the rules of the mortgage game are still changing. New and
tighter regulations are squeezing an already highly-regulated mortgage industry,
putting players at greater risk than previously experienced. This scrutiny not only
affects mortgage companies, but also cascades down to field services companies
and their vendors and employees. But it doesn’t stop there. It cascades further
down to sub-vendors who must also comply with all regulatory requirements.
Field services companies are finding themselves in a unique position to help their
servicing clients maneuver through myriad of government regulations, as well as
strengthen their own risk-management requirements. Servicers today must
document nearly every process to demonstrate compliance. To monitor and
ensure compliance with internal policies and external regulatory requirements,
companies not only audit their own processes and outcomes, but also those of
their vendors and suppliers. And this has never been more important than in
today’s mortgage servicing business.
The ability to maintain compliance ultimately rests on having sound processes. What
processes are in place to ensure client and customer confidentiality? Are vendors
and their subs licensed in the various municipalities in which they are working? Are
work orders being distributed in the most efficient way possible? The list goes on
and on.
Vendor audits add another level of oversight and are a useful tool in developing
competencies that can help vendors complete work accurately and on time.
A strong focus on compliance and quality control procedures helps assure all parties
involved—vendors, field services companies, mortgage servicers, and
investors—comply with all regulations and ordinances. This protects the condition
and value of vacant and abandoned properties, upholds the value and integrity of
surrounding properties and neighborhoods, and protects the most fragile
communities from expanding blight.
Being agile in today’s business world means being adaptable. It means managing
ever-evolving needs and regulations. It means creating nimble operations that can
see the forest through the trees as market conditions shift. The common thread
that spans the field services industry is that property and neighborhood preservation
will continue to be vital to the servicing industry; and data, technology, and
compliance are the new forces driving the field services companies that will succeed
in this new world.
Please click here to view the article in PDF.
About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.
