Mba Tech Slides Dangelo Submission 022008 [Compatibility Mode]

Utilizing Global Sourcing Strategies to Excel in a Flat World
Survivability, Adaptability, and Growth

www.Innovative-Relevance.com

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Disclaimer: The intent and purpose of this information and presentation is purely for informational dissemination purposes only.
Dangelo & Associates, Inc. and its market brand Innovative Relevance® (together with its shareholders, directors, officers and
employees) have made no attempt to verify the reliability of sourced information and cannot be held responsible for any areas of
concern with the information’s usage. This information and presentation should not be construed or taken as professional
advice or statements of direction.

Any result taken by the reader, listener, its organization, or related parties either directly or indirectly are at the sole discretion and
responsibility of the user / reader. The information contained in this document is not a substitute for proper analysis, research,
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The authors, presenters, and their organizations cannot be held liable for negligence, errors, omissions, improper conclusions,
regulation violation, assessments, projected directions and / or any recommendations within or beyond their control or
knowledge without limitation
limitation.

Without limitation, the authors, presenters and their corresponding organizations will not be liable for any direct, indirect,
consequential, punitive or other damages. This includes but is not limited to real or perceived obligation or breach of services
surrounding intent, action, regulation, statute, or tort. The content of this report should be taken “as-is” and no expressed or
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risk.

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Utilizing Global Sourcing Collaboration to Excel in a Flat World

Discussion topics

• What are the characteristics of
change and how can
operations be positioned for
acceptance?

• What should be examined for
potential global sourcing /
outsourcing? Why?

• What are the key imperatives
and operating models for
success?

3

So why a “Flat World?”
• A greater understanding and realization of the complete mortgage “value chain” from
origination to securitization is now readily apparent

• g g g g
pending along with a continual unwinding and
New forms of controls and oversight are p
implication acceptance of aftermarket actions (e.g., monolines, SWF’s, and complex
swaps)

• Globalization is no longer singularly about labor arbitrage – it’s about a global wealth
rebalancing, best execution, and continuous quality improvement

• The compartmentalization of processes is now underway leading to adoption and
adaptation of lessons learned, new delivery models, and less about the “carrots and
sticks” of the past four (4) decades

• It is likely a “Double Bottoming” will still occur in 2008 – forcing change

• Collaboration is b t l b l i
C ll b ti i now about global sourcing and much l
d h less about shorelines and cheap
b t h li d h
labor (e.g., ITO and early BPO arrangements)

• “Caravan capitalism” will be a secondary strategy starting in 2010

4

The current industry state

5

So where are the costs and savings?

6

40 years of lessons learned

7

Changes are creating new operating
challenges

8

Discussion topics

change and how can operations
be positioned for acceptance?

outsourcing? Why?

success?

9

Compartmentalization and sourcing

• The process wheel shows the
Human interrelationships between many
common activities within and
Resources among mortgage operations > 200.

• When examined holistically, the
Marketing Compliance sequencing of organizational
& PR & Risks actions and improvements can be
properly determined avoiding
poorly conceived one-off initiatives
one off initiatives.

• Sustainability for sourcing events is
FSI / best understood and delivered as
Mortgage part of a comprehensive series of
iterations taking advantage of
Banking
B ki Information rapidly accelerating BPS and KPS
Legal offerings.
Technology
• Organizations must avoid advisory
pressure to focus singularly on
costs as the main rationale for
outsourcing.
Finance &
Research & • Mortgage outsourcing operations
Admin. and arrangements will be
Analytics
materially different starting in
Source: Innovative Relevance
2008.
10

Beyond initial cost savings –
competitive and business reactions

11

Beyond initial cost savings –
expansion and alliances

12

Compliance and risk integration…

13

IT integration…

14

Mortgage transactions…

15

Discussion topics

change and how can operations
be positioned for acceptance?

outsourcing? Why?

success?

16

Recognize the life-cycle and on-
going challenges

17

Ask the right questions

• The U.S. mortgage lending
industry is ripe for
restructurings and
transformations.

• Arcane processes and
fixed cost over-capacity
will accelerate the drain on
resources hastening g
operational losses and
forcing events which can
only be addressed with
process transformations
and collaborative global
sourcing.

• With funding sources
severely reduced, the
ability to singularly finance
organizational profitability
cannot be achieved using
the operating models of
the past.
past
18

It’s more than just the deal…
Internal teams and their advisors often are so focused on the deal and contract terms that they
terms,
establish expectations that are out-of-alignment with the organization and provider ability to sustain,
adapt, and grow the relationship.

19

New transition demands are often
multi-faceted and iterative…
A transition and governance process must be both repeatable and iterative Using a closed systemic
iterative.
feedback approach, organizations can be assured of adaptation, adoption, and sustainability.

20

…leading to proactive and adaptable
governance

21

Potential implementation models

22

In summary
• Framing their integration utilizing a
global sourcing framework will
facilitate the clear understanding of
immediate actions, technology
investments, staffing needs, and
third-party relationships.

• By utilizing a wide-range of criteria to
assess and focus the organization’s
outsourcing efforts, mortgage
efforts
executives gain a superior advantage
over their competitors (and advisors)
who are only seeking cost
containment or avoidance

• Even though the market volumes may stabilize and increase as the cycle turns positive in late 2008,
the workforce mix will change not only due to aging baby-boomer populations, but skilled global
worker availability, “forced” integration demands, and increasingly focused process
compartmentalization's and specializations.

• Organizational preparation coupled with risk mitigation will underpin all global sourcing efforts.

• The mortgage industry survival demands effective integration, multi-faceted sourcing approaches
and collaboration where jobs are created not just along nationalistic boundaries but also taking into
account the domestic markets that pay for their offerings.
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Mark Dangelo and Innovative
Relevance®

Mark P. Dangelo is the managing principal and creator of Innovative Relevance organization, books, and
intellectual capital. For over 25 years, Dangelo has worked as a practitioner domestically and internationally
assisting hundreds of clients recognize and profit from globalized operations, technologies, and workforces.
He has advised numerous Fortune 500 firms and their executives on M&A efforts, transformations, operational
efficiencies, and organizational restructurings.

Within the mortgage and FSI markets, Dangelo’s experience and qualifications have been created from a hands-
on, pragmatic foundation of business and technology assignments and clients. His thought leadership,
expertise, and corporate brand (i.e., Innovative Relevance®) are recognizable within several industries due to
association publications, articles, speaking, podcasting, and books.

Dangelo works independently with a host of international individuals and organizations helping teams understand
the relevant application of innovative ideas. Dangelo is also educated in equity markets including his studies
for Series 7 and 63. He holds a Bachelors of Science in Computer Science and a Masters in Business.

Innovative Relevance® is the business and technology advisory, research, and business transformation brand of
Dangelo & Associates, Inc., which was founded in 1995 as a woman-owned minority corporation outside of
Cleveland, Ohio.

Innovative Relevance® business solutions have been built upon reputation and experience within the mortgage,
FSI and healthcare industries. The principals in Innovative Relevance® have worked extensively
internationally and advised nearly 200 of Fortune 1000, Russell 2000 firms, and the major domestic stock
www.Innovative-Relevance.com exchanges. Further details about Innovative Relevance®, its published accomplishment and offerings, and
comprehensive printed content can be found at www.Innovative-Relevance.com.

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