by Caroline Wright
Part I of II
Ted Bond, President of Mid America Title in Waukegan, Illinois, is a man who does his homework. When I first spoke with Bond in late 1997, he had a lot on his mind. He was just starting the migration to offshore processing for his day-forward maintenance. Though obviously impressed by his new offshore partners, Bond was a bit terse, as if he didn't want to sound too enthusiastic.
"Ted Bond is an extremely cautious man!" laughs Doug Bello of D. Bello & Associates. Bello, manager and technical liaison for the HDEP/Mid America project, says that Bond first approached him about offshore entry as a possible means of reducing costs. "[In our initial discussions,] Ted wasn't about to take any risks. He wanted to make sure it would work, and that the quality was there."
Intense competition has leveled the Chicago area playing field. With over 60 title companies and more than 1700 attorney agents, prices have declined significantly over the last several years. Many transactions are written for fees below cost. Bond was also dismayed by the growing prevalence of free washes --- title orders that stop when a transaction fails to close.
"Free washes are the cancerous scourge of this industry! Some agencies and direct operations have 20-30% cancellation rates. It's hard to operate profitably when a high percentage of your work isn't paid for," Bond lamented.
Bond considered several cost-cutting options for his company, which maintains plants for Cook, Lake, DuPage, and McHenry counties in the Chicago area. One by one, he rejected each option. "Searching courthouse records frequently compromises quality and always compromises efficiency. Purchasing data from a competitor enriches those who are trying to put us out of business. And absent a title plant, full automation is impossible."
Bond first heard about HDEP from Dennis Anderson of First Dakota Title, who had gone to Manila for his backplant conversions and raved about the quality of HDEP's work. With experience in the title business accumulated over a decade, HDEP's team was probably the only offshore facility on the planet that could competently tackle a maintenance project. Planning ultimately to take the Cook County plant offshore, Bond selected McHenry County, the smallest of the four for which Mid America maintains plants, for its shakedown project.
"We can normally do a title job offshore for about 30-50% of what it would cost here," says Bello. "When Ted was convinced that the savings justified the project, he proposed a unique arrangement. He said, ‘I'll pay you to key my data in Manila, but I will also continue to key it here... and then we'll do a match."
Bond and plant manager Carol Behrens spent a week in Manila in Fall 1997, reviewing Mid America's specifications with the offshore staff. "It was just a matter of HDEP's training its employees to key the data the way we key it here," recalls Bond. The Manila visit was a success. "Now we could place faces with names, [and we had a] better idea of how they do things. And there was no language barrier. Their English is outstanding!"
"When we got home," Bond reports, "we compared each field with the data keyed by our U.S. operators. This continued until we were comfortable that the quality and quantity of the work being produced in Manila was equal to, or better than, that produced by our operators."
"Because he took his time, his confidence level is high," says Bello. Mid America DP Manager Dennis Fielding agrees, and adds that title companies using offshore firms should monitor initial data integrity for their own peace of mind. "Our duplicate entry started in November ‘97," says Fielding, "and Mid America went live with HDEP on May 26, 1998. After watching [that process], our comfort level got very high."
Today, Bond is a happy man. "The pressure is off! This has reduced our overhead, and helped our bottom line. After the cost of FedEx, and an additional roll of microfilm, we expect a savings of about 34%. The greatest savings, however, is in reducing our hiring and training efforts. Data entry positions are difficult to fill. Also, an inconsistent flow of source material makes staffing difficult."
The Manila plant's staff is noteworthy for longevity and low turnover. Though considered low-end here, data entry jobs are coveted in the Phillippines. Critical thinking is essential for title keying and a seasoned operator is a valuable commodity. "Many of the people I trained in 1991 are still there," says Bello. "I go to Manila less and less because the staff keeps getting better. They make decent wages, have benefits and healthcare, and work in a great facility."
Bond is quick to praise the Manila staff. "The quality of the data is superb. I wouldn't be surprised if there's a little more motivation on the part of the people doing the work than there might be in this country."
Bond is so pleased with his results that he intends to give HDEP more business. "We plan to expand to Cook County," he tells me, "and Lake County, too." (Bond's DuPage County data is purchased on magnetic tape and does not need to be keyed.).
"Ted and I went to lunch to discuss the new Cook County project," says Bello, delighted with Bond's confidence in HDEP. "I said, ‘It'll be the same scenario as for McHenry, right? You'll put it through the comparison process?' Ted said, ‘No, that won't be necessary.' He went to Manila, saw the expertise of our people, and got a real feeling for the quality of the work we were doing."
Ted Bond, a cautious man who does his homework, summarizes his experience. "Outsourcing to an offshore vendor was a good decision for us."
Part II of II
Last month in these pages, we visited Mid America Title Agency, an Illinois company that has successfully harnessed offshore data entry for day-forward maintenance of its title plant. This month we’ll take a look at how the Mid America process works. We’ll also explore the new relevance of offshore DE as the title industry, faced with a baffling choice of new tools, labor woes, and a leveled playing field, prepares for the millennium.
How has Mid America gone global? As of November 1997, the agency’s day-forward maintenance for McHenry County is being keyed in the exotic Phillippines, by the Manila facility of an American company called HDEP International. In the coming months, Mid America plans to go offshore with its Lake and Cook counties, as well.
The process isn’t terribly complicated. Mid America purchases two rolls of microfilm from the county, and sends one, via Federal Express, to Manila. The offshore team uses a microfilm reader and captures the data from the source documents. Selected elements of the data are keyed into the Manila computers.
At the end of each day, the data, which averages ten files of various size, is compressed into a zip file. The zip file is, in turn, attached to an e-mail and transmitted via the Internet to Mid America, which generally receives it first thing in the morning. The file is unzipped and then moved to Mid America's VAX system.
Were there any issues with system compatibility? Not really, says Mid America DP Manager Dennis Fielding. "We had to take a PC file and move it to a VAX system, and that's done with a terminal emulation package. It's just common old text data coming over the lines." So far, the process works fine. "They've never needed to retransmit e-mail, and there haven't been any significant delays,” reports Fielding.
What about data integrity? The offshore staff, many of whom have been keying title documents for HDEP for over seven years, have developed an intricate understanding of Mid America’s specifications. The agency initially ran side-by-side checks to ensure that the data keyed in Manila was identical to the data keyed by Mid America. "We did that until we felt that the Filipino staff understood all the documents,” says Mid America President Ted Bond. “What we're doing now is the same as with our own DP staff: we get a hard copy of every document, and an employee reviews each one for glaring errors."
And then there’s the distance. When asked if he anticipated any problems maintaining his plant in an exotic land, thousands of miles away, Bond replied, "Not really. There’s considerable political stability in the Phillippines. It's an island, so you always worry about the weather... but Mid America's a mile away from a nuclear power plant, so we've got some exposure as well!"
Teams on two different continents, thousands of miles away... pioneers and partners in a process that creatively marries old and new technologies.
The Next Logical Step Is A Quantum Leap
Most title companies have established that their plant dates should be no more than one day beyond the date on which they receive the film from the county. But staffing issues, currently tougher than ever before for many U.S. companies, can make this a difficult policy to uphold.
Technology has provided a possible solution for the plant date dilemma. Can a completely current plant be maintained offshore? "Absolutely!" asserts Doug Bello of D. Bello & Associates. Bello anticipates that the process will become faster as more clients are added to the offshore roster. "The next logical step is a quantum leap," says Bello, who says that imaging will make a huge difference. "Eventually, we'll be able to afford a high speed phone line, and we will transmit the images of the documents to Manila. Instantly, that will cut 3 days off the entire process."
HDEP’s Manila facility, which computerized its first index in 1988, probably has more title plant experience than any other offshore data entry firm in the world. Virendra Nath, HDEP President, believes that his Manila facility will be able to help title companies maintain a current plant date very soon. “I expect that we could have one or two small customers working with us in this way within the next six months. The barrier [has been] the cost of bandwidth. This cost is falling fast, and we'll offer the service as soon as it becomes reasonable.”
Nath’s company, which has extensive title experience, is seeing increasing demand for day-forward services. “As we prove the concept, more companies will want to move this function offshore,” says Nath. “Within five years, I expect that many title companies in the US will be scanning their daily recordings and transmitting [images] to our facility in Manila. They’ll be getting 12-24 hour completion schedules.” Eventually, Nath anticipates, his clients will request even more esoteric services.
The imaging process is still imperfect. “If imaged documents are filmed out of order, if pages are missed or any of a dozen other events happen, [the errors] will be reflected in the image database,” says Nath. “Film is an analog medium; you can move forwards and backwards, make leaps of faith and reason, and come out about where you want to. If an image is mis-indexed it could be lost forever.”
Nath and Bello are both confident that software developers will soon develop the critical efficiency enhancements needed for imaging to become the ultimate title tool. The technology is critical for clients who want to maintain a current plant offshore. “They must be able to accept an image of the document, rather than a reel of film. That's a quantum leap,” says Bello.
The industry better make sure its track shoes are tied tightly. There’s a lot of leaping ahead!
For more about the evolution of offshore data entry and its promising applications for the title industry, please see TT Vol. 5, #1-4, April-July 1998.
Caroline Wright is a freelance writer; her company, Wright For You Copy Development and Word Services, is based in Conway, South Carolina.