Effective System Integration Strategies

There are two key factors to effective system integration. The first and most important factor is simplicity. Keep It Simple (I won’t spell it out). Complex interfaces and procedures are expensive to implement and even more expensive to use and maintain. The second factor is using the right tools and resources for the particular integration need. The choice depends on processing environments and disparity among systems. After all, the ultimate goal of implementing and integrating a system is to enhance the overall process at an acceptable cost.

Simplicity

Whenever possible and practical, use vendor supplied solutions and integration tools, and try to stick with standard formats and methodologies. The advantages are compatibility, ease of maintenance, quick deployment, and vendor support. Many LOS systems include seamless integration to third party service providers. Most secondary marketing systems include toolkits for importing origination and servicing loan data. When integrating an LOS system with a secondary marketing system, use the LOS vendor’s standard data export, and the secondary system’s standard import interface. The basic field mapping for such interfaces may already exist off the shelf for the more popular and commonly used systems. This is the simplest scenario.

While going with the “canned” interface route is preferable, it may not be possible. These standard interfaces typically change with different software versions, and your institution may be a version ahead or behind what the interface supports. This is complicated by the fact that the two systems and two versions probably have to match. And what about those custom fields you added to the LOS and want to bring into the secondary marketing system? An off-the-shelf interface probably won’t support these customizations. If your LOS or secondary system’s vendor does not supply an interface toolkit with adequate flexibility to handle the nuances of your unique business needs, the next best choice is a third party interface product. Try to stick with open systems and avoid proprietary closed solutions. Again, off-the-shelf solutions may already exist for the most popular systems.

Simplicity is just as important when integrating manual systems. People work better and more efficiently when they understand their jobs. If a workflow is too complex or procedures are lengthy or cumbersome, the system will not be efficient. Applying a sophisticated workflow management system does not necessarily resolve the complexity of the underlying process. In fact, the automation may actually create more complexity and additional work. The last thing people want from an automated workflow management system is more work. The proper solution is to study and evaluate the required business process and define the critical path, before any workflow automation is applied. In other words, don’t automate your current, flawed process. Fix the process, and then automate!

Using The Right Tools And Resources

As stated above, to keep things simple, use vendor supplied integration tools whenever possible and practical. However, universal interface tools that allow field mapping and end-user controls, may sacrifice performance in favor of ease-of-use and maintainability. The old “…good, fast, cheap; pick any two” analogy applies here. In a large-scale high-volume or time critical processing environment, there may be performance issues with a toolkit approach. In this case, custom programming may be appropriate and justified, to leverages efficiencies and streamline the process. Conversely, in a volatile environment where requirements change frequently and quick turn-around of changes is critical, custom programmed interfaces are slow to change. This is a classic trade-off of performance versus ease of maintenance.

The most appropriate approach to systems integration depends on the level of disparity among systems. If systems are on different hardware platforms or operating systems, integration is a greater challenge. Using platform independent standards and protocols like HTML, XML, and X12 can help bridge the gap, but it is only a part of the solution. Network connectivity (LAN, WAN or Internet) and communications and emulation software are typically overlooked and must be considered. Obviously, avoiding multiple platforms is the best strategy, but we don’t always have that luxury. In a large environment you could end up with a laptop based point-of-sale system, a Windows NT Server based loan origination system, a UNIX based Internet server, a midrange based loan servicing system, and a mainframe based accounting system. And, they must all effectively interact to some degree, within the constraints of business needs and available processing timeframes.

Other forms of disparity among systems are differences in level of automation, and operator interaction. Integration of a manual system with an automated system requires using a combination of interfaces and procedures. In this case, the interface may be a “user interface” that allows an operator to interact with the automated system. The interaction may also be supplemented by a workflow management system, where the system instructs the operator to perform certain tasks, and the operator provides the system with completion status. This type of automated workflow management is common in the processing of mortgage loans, and facilitates throughput, status tracking, and performance evaluation.

In mortgage lending applications various critical events have different timing and operator interaction requirements such as; real-time product and pricing updates, interactive interfaces to credit reporting or automated underwriting systems, and unattended overnight batch interfaces to servicing and accounting systems. Each of these scenarios requires a different focus, and therefore different integration tools. Integrating a pricing model with an LOS system to allow real-time product and pricing updates commonly requires a one-way or two-way interface and sound procedures appropriate for a system administrator. This is an event that may happen once or twice daily, and will be performed by one or two highly trained people. On the other hand, integrating an LOS system with a credit reporting or automated underwriting system requires an efficient and secure bi-directional interface and seamless procedures appropriate for a loan entry operator. This is an event that may happen hundreds of times each day and may be performed by dozens of people. Integrating an LOS system to a loan servicing system typically requires an unattended batch interface that is effectively integrated with the overall nightly batch cycle.

Conclusion

So, you still think that the new system will fly solo out of the box? Or, may some modeling glue be necessary to keep the pieces together? Success is more likely with a dab of Elmer’s between the parts. Look at integration as an opportunity, not a necessary evil. Keep it simple, identify the areas likely to yield the best return, and choose the best tools based on your particular integration needs.



San Juan Capistrano, California based LCS Group is a nationally recognized leader in technology and business process consulting to the mortgage banking industry. To learn more visit us at www.LCSonline.com.

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