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The defi Team defi INSIGHT, Managed Servicing, Servicing Systems, Simplifying Processes

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Managed servicing (outsourced lease or loan servicing) isn’t just a case of “out of sight, out of mind.” While auto lenders can reap significant benefits from optimal outsourcing services, care must be taken in the transition process. 

A managed servicing (BPO) transition checklist is a must to manage the capacity of service changes effectively. Challenges may arise, but best practices can make the process much easier. 

Common Challenges of Transitioning to a New or Different Managed Servicing (BPO) Provider

Transition can be a stage of significant risk in any outsourcing relationship. Implementation is where the real work begins and is the critical link in the lender-provider relationship. Required planning needs to be defined, and future groundwork is laid out.

Here are some of the common challenges auto lenders may face during the managed servicing (BPO) transition process.

Post-Contract Miscommunications Between the Client and the Managed Servicing (BPO) Provider

Like any relationship, communication is key. When lenders and service providers are not operationally prepared to work together after the contract is signed, services may suffer, implementation activities get stalled, everyone is frustrated, and the entire schedule for achieving the expected outcome is delayed. 

The problem occurs if new processes and decision rights have not been established with clarity. A lack of communication can be the foundation of many other issues to come if not addressed. Giving and getting definitive answers to the following questions can help deter such issues.

  • Is new software/technology required on behalf of the client?
  • Who has the authority to make service requests?
  • Do the requests go directly to the managed servicing (BPO) provider?
  • Is approval based on financial costs?
  • How quickly are “emergency” change requests acted on?

These and many other questions about financial, contractual, and service delivery processes and decision rights must be answered and communicated to the appropriate personnel. The outsourcing contract is not an operations manual, and additional groundwork is required to design and implement changes.

Inability to Meet Service Demands

A managed servicing (BPO) transition can be a lengthy process, and one of the most common challenges lenders face is keeping up with operations throughout the process. There is typically a substantial amount of pent-up demand or requirements that must be met soon after the implementation period begins. How the new initiatives are prioritized, estimated, evaluated, approved, scheduled, and performed may all be in the midst of change during the transition to the new outsourcing model and can decrease demand being fulfilled until services are in place.

End-User Resistance to New Methods

Often, a third-party service provider is brought in to be an agent of change. Lenders want to achieve benefits quickly, which require changes in process, technology, behavior, and (potentially) staffing. Unfortunately, not everyone is willing to change. This can cause disruptions in customer relations since they’ll be adapting to changes as well.

When collaborating with an industry-expert managed servicing (BPO) provider, the likelihood of facing these challenges is minimal. However, the transition requires effort from both the provider and you, the client. Here is a managed servicing (BPO) transition checklist and some best practices to ensure a smooth transition.

A Managed Servicing (BPO) Transition Checklist to Ensure a Smooth

Minimal disruptions to day-to-day business operations during a transition to a new BPO provider is important to both you and the provider. Being prepared with upfront knowledge will help the change occur seamlessly. A managed servicing (BPO) transition checklist will help facilitate a smooth change to a new provider.

#1 Create a Detailed Plan with Your Managed Servicing (BPO) Provider

Project planning plays an essential role in helping guide you through the other phases. Planning will identify desired goals, reduce risks and operation disruptions, keep the transition on schedule, and ultimately deliver the agreed-upon results.

To create your initial outline, consider asking your potential provider these questions:

  • What is the experience level of the staff?
  • What service management systems are in place?
  • To what degree is process automation used? 
  • Do you maintain metrics regarding the services provided?
  • How do you manage fluctuations resulting from seasonal or economic cycles?

You want services that are innovative and forward-thinking in how they are delivered. Such innovations and capabilities can deliver services more efficiently and of better quality while simultaneously helping enhance your reputation as a lender.

The best managed servicing BPO providers offer a range of services to help optimize vital servicing functions. They will work with you to determine the services that best suit your needs and develop a detailed plan to make the transition as seamless as possible.

#2 Prepare Your Customers

Your business depends on customers, and a successful managed servicing (BPO) transition engages customers by clearly communicating the benefits they can expect from the change. For example, letting customers know that you’ll be outsourcing your call center services and the change will address their needs quickly and efficiently will reduce the risk of conflicts. By maintaining open and honest discussions on these changes, your business has the opportunity to improve its reputation and build support.

#3 Maintain Timely Execution

The workflow defines the overall process, step by step, what is required to achieve managed servicing outsourcing outcomes. The most important thing your team can do is to carry out duties as directed while processes are being shifted.

A great managed servicing (BPO) provider will implement robotic process automation (RPA) to assist workers in carrying out tasks that would otherwise be time-consuming. Eventually, the transition will reach a peak and align with your customers and employees, and managing daily operations will become easier as your in-house process responsibilities dwindle.

With that, the unexpected can always occur. If you do experience disruption during the transition, regroup with your provider and move forward with the schedule as best as possible.

#4 Ongoing Relationship Management

After the bulk of the transition is complete, your relationship and communication with the provider must be preserved. Outsourcing is an ongoing aspect of your business and requires regular review from both parties.

Using analytics to track data will extend your abilities as a lender. It will provide information on what processes are successful, what needs improvement, and will open the discussion for any possible changes that need to be made.

A Successful Managed Servicing (BPO) Transition

The benefits of expert outsourced (BPO) servicing are clear, and with a keen focus on the above managed servicing (BPO) transition checklist, a successful outsourcing partnership is likely. A partnership aligned on values and culture, with good solid processes as a foundation, is a good start.

Take the opportunity to undertake due diligence on your processes so that you can get the best out of the upcoming changes, take advantage of the managed servicing BPO provider’s better technology and processes, and confidently manage your business throughout the entire transition.

Getting Started

defi SOLUTIONS provides configurable lease or loan origination systems, loan management, and servicing, analytics and reporting, and a wide range of technology-enabled managed servicing services. If you’re struggling with the limitations of your current lending technology solutions, take the first step in realizing the benefits of modern technology. Contact our team today or register for a demo.

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