Outsourcing as a strategy for company growth

When first discussing outsourcing at a company strategy session, saving costs is the main topic of conversation. Cost savings there will be; if the outsourcing initiative is thoughtfully pursued, cost savings won’t be the main benefit from outsourcing. Many of our customers have found that using HDEP’s outsourcing capabilities has become a serious strategy for sustained company growth. HDEP International has long term clients – averaging over 10 years – and has seen the way thoughtful companies have used our capabilities as a core growth strategy.

One of our clients began working with us almost 25 years ago. It was a new company in a small metro in the midwest. The owners of the company needed assistance to build their backplant. Since they were under a time deadline to get the project completed, they sent two staff members to our facility to ensure that the title plant was posted correctly and technical questions were promptly answered. The project was completed on time, the company began operations on schedule, met every one of its business goals, and eventually became the dominant company in the area.

The report that the two client visitors made to their management upon their return had a long term impact on the company’s operations and growth strategies. They got to know the staff at HDEP, understood the depth of commitment to quality, and saw the efficiency of the systems and the culture of the management. As their own company grew, they began to consider HDEP as a way to build on internal initiatives. They realized that daily posting of the title plant in-house was no better than the work done by HDEP staff, and the in-house work was often delayed due to absences and variable work load. The company asked HDEP to take over daily plant posting, even though it meant a three day delay at the time as source media was physically couriered. The company built courthouse searches for the three day delay into their production process.

With the Internet revolution and the widespread availability of high speed bandwidth, the company began to scan the recorded documents and transmitted the images to HDEP to key from. This reduced the turnaround time to one day and matched the result from in-house operations.

As the company grew, they began moving into adjacent counties and asked HDEP to build their title plants. The trust in HDEP’s accuracy and knowledge was now high enough that the customer asked us to conduct simple research for “fall-outs” – documents with something incorrectly recorded – the correct information available in a previously recorded document. HDEP staff would identify the prior document, research the anomaly and correct the index for the current document. In some parts of the country, this process is called “locates research” or “locating”.

Once the document research initiatives proved to be correctly done, simple production work came next – typing abstracts and preparing commitments for simple refinance orders. The owner of the company said “If your people can accurately post these plants and do the locates, you can type abstracts and commitments – we’ll help you learn.” HDEP began doing the simple refinance orders with the condition that the customer’s staff would review the work closely and assist HDEP to understand the complexities of these order types.

As the production outsourcing initiatives proved successful, the customer began to revamp their growth model. They understood that they could go into a new county, have HDEP build and maintain the title plant, do the locates, and undertake the simpler title orders. They further understood that if so much of the production work could be outsourced, much of the remaining work could be done in a central location with close supervision and standardized processes. The number of staff in each new county office could be kept to a minimum, and the functions that remained in that office would be focused on local matters – sales, customer service, interactions with the county recorders, geo-mapping, etc. With this insight, the company has expanded rapidly and now covers many states in the mid-west.

The company was able to direct scarce management resources from day-to-day production concerns to long term company growth. Managers did not have to worry about covering for staff absences, turnover in staff, variability in daily demands, etc. The biggest thing they had outsourced was the management headaches, not the title plant posting or the locates or the production work. Senior company managers could use their time to find new opportunities for company growth.

HDEP works with this customer on title plant construction, on daily plant postings, creates many different types of production reports (refinances, sales, foreclosures, final policy production, etc.), and works on escrow processes too. For some counties, HDEP maintains part of the client’s title plant and images to ensure high productivity. HDEP has been one of the drivers in the company’s growth.