4 Keys to Successful LOS Implementation

Are you pondering a switch to a new loan origination system? Then you have a vested interest in making sure the system you choose aligns with your business needs, that your processes are not compromised, and that the implementation goes as smoothly as possible. 

Ticking all of those items off your list requires some prior planning and preparation, as well as some assistance from outside experts. Here are four keys to ensuring that your LOS implementation isn’t a flop. 

Find an LOS Implementation Quarterback

The first step to ensuring a successful LOS implementation is enlisting the help of a neutral third-party that sees the bigger picture of how the LOS will fit into your current processes and your business plan. 

“You need someone who can read the defense,” said Harry Hixson, Senior Manager for Saxony Financial Services, invoking a quarterback metaphor. “LOS implementation is a lot more than just sticking in a new system. It’s a lot of ancillary things, like how a new LOS will impact things upstream and downstream. There are many, many touchpoints between the LOS and your existing environment.”

Regardless of which LOS provider you choose, they will assign your firm an implementation team. That team will handle the technical task of installing the new platform. But it is helpful to have a third-party that knows LOS software, knows the industry, and has your firm’s best interests in mind. The quarterback will make sure that your business needs and processes will be addressed during the implementation, that the implementation team is accountable to what they promised you, and that any business continuity risks are mitigated. 

Lean In to LOS Best Practices 

Most LOS systems are highly configurable. You can make them look like and do virtually whatever you want. But just because you have the ability to configure a system in a particular way – should you? What if what you want to do doesn’t line up with industry best practices?

“I’ve seen implementations where LOS teams have sat down with a firm’s decision-makers and configured the system exactly the way they were told to,” Hixson said. “But those LOS implementation teams may not always tell you that your idea doesn’t line up with best practices.

“Your idea may not be scalable, for example,” Hixson continued. “You may configure yourself into something that will require more labor in the future. Your goal as a company is not to go through the process of implementing a new LOS, and then realize two years later that you can’t support it without hiring more staff.”

Another example of misalignment with best practices is when a company decides to implement a new LOS with expanded capabilities – but then tries to operate it under old processes.

“Each LOS has particular strengths,” said Michael Martin, the Vice President of Saxony’s Financial Services practice. “We help you utilize it to maximize those strengths. Whatever ROI you hoped to achieve by switching to this new platform, we help you take advantage of that.”

A third-party expert can mediate the relationship between the LOS implementation team and your firm, providing guidance on how to line up LOS functionality with what you want to accomplish as a business, but do so in a way that is sustainable and scalable. It will save you having to apply back-end fixes later on. 

Understand LOS Data is Part of a Whole

You may be tempted during an LOS implementation to see this platform as something bigger than a just piece of your overall data and software ecosystem. But, that’s in fact what it is. 

“LOS data is just origination data,” Martin said. “But there’s also lead management data that lives upstream of the LOS, and servicing and post-close data that lives downstream. All of your data combined gives you the full picture of how to drive your business as a whole. LOS plays a part in that, but only a part.”

What you shouldn’t do is focus only on the LOS data itself to drive your decision-making. You need a broader approach.

“At Saxony, our bread and butter is creating a data warehouse environment that takes all of your data into account,” Hixson said. 

Rely on Industry Experts

Whomever you rely on for third-party LOS implementation guidance, you should be sure that they have a background in Financial Services generally, the mortgage industry specifically, and LOS implementations directly. You need someone who is accountable to you and your business to serve as the go-between for your firm and the LOS implementation team. 

“Ultimately,” Martin says, “You want someone to make sure things are being implemented correctly, that customizations are being completed properly, and that integrations and downstream impacts are all addressed.”