For lenders, deciding to switch to new loan servicing software is a big deal. There are multiple factors to consider, and being prepared for the transition is crucial to having a successful implementation.
There are also many benefits of loan servicing software. After all, it is the core of any lending company. It’s what keeps track of payments, loan terms, interest and collections. It’s the essential core of your business. And it’s complex. As companies diversify and offer multiple loan products, combined with evolving regulations, many are forced to scrap their existing system and upgrade to a system that provides more flexibility and room for growth. However, even though the need for change may be apparent, it’s tough to jump in. In this article, we’ll use our teams’ decades of experience and knowledge to explore the top three factors involved in the successful implementation of new loan management software.
Key #1: Carefully Defined Requirements
Nothing will be more useful as you shop for, choose, and implement a customizable loan servicing platform as carefully defined and well-thought-out requirements. The wrong software might be selected if a full view of the requirements is not identified. Be very clear on what is needed in order to ensure a smooth and successful implementation. Be certain to get input from every department that will use the software, including accounting, customer service, management, collections and recovery.
You’ll also want to make sure everyone is using the same terminology with regard to the proposed platform. Oftentimes, the software vendor and any external members of the implementation team use different terms to describe the same thing. If terms are not clearly defined amongst all stakeholders up front, misunderstandings are possible.
We’ve experienced situations here at Nortridge like this, where implementations were slowed down considerably simply because there were misunderstandings around terms. For example; “draw” vs. “purchase”, “loan” vs. “transaction”, etc. It’s almost always a mistake to assume everyone is on the same page, so clearly define the terminology among your in-house team and your software provider.
Adding new products
If part of the plan is to add new loan products, it can pose a risk to the implementation because requirements for new products tend to change frequently and requirements are often defined poorly. It’s important to have flexible software if new products are the plan. Requirements should be organized along the loan life cycle to include consideration of payment cycles – monthly, annual, or otherwise. Requirements are more than just the functionality of the system (functional requirements) and should include reporting needs, technical/infrastructure, processing time/performance, etc.
If a need for newconfigurable customizable lending software has been established, and you’ve gathered input from all departments, you’re well on your way to getting buy-in from all departments. It’s essential that all stakeholders are in agreement on the course of action as the implementation progresses and various challenges are met and handled. If everyone is positioned well to meet the various deadlines and help overcome any bumps in the road, chances of success increase exponentially.
Want to see the inner workings of the best loan servicing software?
Ready to explore how configurable customizable lending software can revolutionize your debt collection process? Don’t wait; click here to request a free demo of Nortridge. Witness firsthand how our advanced features can enhance your operations and make your debt recovery as simple as possible. It’s time to work smarter, not harder, with Nortridge.
Key #2: Establish and Be Clear in Priorities
Once the requirements are identified, the scope of the implementation can be finalized. Priorities must be clear when considering deadlines or changes to requirements. Oftentimes, this calls for trade-offs and it’s critical that the most important project tasks are completed first. Priorities can also be used to break the implementation into phases. Priorities should take into account any prerequisites and dependencies.
Key #3: Spell Out Project Ownership and Roles
The lender must take sole ownership of the project. They know their business better than anyone, and they know what they want from the platform. This knowledge puts them in the ideal position to drive the implementation to completion. Vendors and outside consultants may serve in roles that are essential for the overall success of the implementation, but their role is not project ownership. If the lender refuses to take project ownership, the project is being structured for failure from the start.
The lender needs to have an “Executive Steering Committee,” which will allow the executive team to own the project. This committee will foster accountability, address resource needs, and ease the decision-making process. A project manager helps direct the flow of information and keep the implementation team organized. We also suggest identifying subject matter experts for all key areas (accounting, customer service, reporting, collections, and IT). These subject matter experts can provide requirements for the various departments as well as be available to quickly answer questions when needed. Regular status meetings will help maintain visibility and momentum.
Embracing Change with Confidence
The implementation of new configurable customizable loan servicing software can undoubtedly be an intimidating undertaking. But with careful preparation and a strategic approach, lenders can navigate this transition smoothly and efficiently. By defining clear requirements, establishing priorities, and designating project roles, your organization can avoid common pitfalls and ensure a successful implementation.
Remember, the right loan servicing software is more than just a tool; it’s the catalyst for your company’s growth, flexibility, and customer satisfaction. It will be the driving force behind the efficient management of payments, loan terms, interest, and collections.
As scary as change can seem, it is the precursor to progress. The journey may be complex, but the destination promises a system that offers more flexibility, greater room for growth, and an overall more efficient operation. Start your journey today by requesting a demo of Nortridge, the best loan servicing software designed to revolutionize your debt collection process. Embrace change, enhance operations, and prepare for a future of success with Nortridge.
