BLOG VIEW: If the past few months have taught us anything about the state of the mortgage industry, it's that 2014 is going to be yet another transitional year. New regulations, rising interest rates and reductions in refinancing will be at the forefront of many mortgage professionals' minds.
And many are finding that technology provides a promising solution to drive efficiency and cost savings in these uncertain times. There is always a difficult tipping point when it comes to technology, when you have to forget about the large investment you made several years ago in a hardware device or software application and face the harsh reality that it has outlived its usefulness.
I know it was difficult for me to put to rest my dual floppy Tandy PC, a stand-alone 20 MB external hard drive, a reliable old daisy wheel impact printer and my original Blackberry email device (I really miss that last one.)
But progress is inevitable. Many brokerages put their dedicated, thermo graphic fax machines out to pasture years ago (remember the curled paper scrolls?) replacing them with newer technology – plain paper fax machines – only to see them exchanged for multi-function peripherals a few years later.
Some brokers equated the fax medium with the devices themselves, thinking fax would be made obsolete by email. Yet as we look at how we handle pre-approval letters, deeds and disclosures, it's clear that faxing hasn't gone away � not by a long shot.
To improve fax management, larger organizations "networked" their fax processing, investing in fax servers and dedicated fax boards to rasterize documents prior to sending over public switched telephony networks (PSTNs). Eventually servers were developed to support the digitizing of documents for Internet Protocol (IP) transmissions. Technology marches on and another investment is sent to the scrap heap.
If all of this device replacement sounds familiar to you, you are like many brokers who have probably reached the next tipping point: It's time to retire your fax servers and fax machines. Yes they cost a lot, but their value probably exceeded their cost long ago.
So set that investment aside and consider your monthly overhead for maintaining these dinosaurs: They require energy, maintenance, constant attention, and you need an immediate backup in case they go out of commission for any length of time (banks and buyers will not wait for fax downtime). That commitment of effort and resources costs money. When you consider that every mortgage application and supporting documentation represents a substantial revenue opportunity for your brokerage, the productivity losses from arcane fax technology can be a hidden value drain.
Retiring your fax hardware gets you out of devoted financial resources to fax that should and can be diverted to achieving your core business goals. What replaces fax servers? Hosted fax services: no hardware, software, telephone lines or paper needed. And no upfront investment or ongoing support and maintenance costs. Best of all, you only pay for the fax volume you actually use, so if you see fax volume decline over the next few years, you aren't married to a technology investment that overwhelms its present day value. This value proposition is especially promising for the mortgage industry, which is so entrenched in documentation.
Hosted fax services supplant fax servers and dedicated fax machines for brokerages with varying fax volumes, remote workers and those offices that want to keep services in-house. Unlike fax servers that require substantial start-up and maintenance efforts, hosted services can be initiated in minutes, resulting in immediate productivity gains. In addition to these user benefits, hosted services can be set up to provide secure transmissions, usually via encrypted Transport Layer Security (TLS) or dedicated Virtual Private Networks (VPNs) between users and the cloud-based hosted servers.Â
What follows are six important self-assessment questions to determine if it is time to move on to a cloud-based fax solution:
1. How many faxes does your brokerage send each day? Fax volume often goes unmeasured because once the infrastructure is in place the actual document flow goes unnoticed until there are lines at the fax machine or the fax traffic strains capacity of a server. Fax servers require constant monitoring of system capacity and throughput volume to ensure the solution is appropriately-sized for your brokerage. While scaling up (adding telephone lines and/or servers) to meet your faxing requirements can be slow and time-consuming, scaling back is usually not an option.Â
2. Is your fax volume constant or do you have peaks and valleys? Owning the equipment and infrastructure for faxing means that you need to purchase hardware and bandwidth that can accommodate your highest usage level. This isn't so much an issue if on a daily basis you have a small fluctuation in the number of faxes sent and received. More likely however, you have peak usage periods such as spring when buying and selling often peak, and influxes of refinances when interest rates drop. In this situation, you have faxing overhead that may be capable of a much higher volume yet is severely underutilized when viewed as a whole.
3. Do you have a backup plan for server downtime? Even the most robust server infrastructures require scheduled maintenance and unexpected service outages. If your company does not have sufficient IT resources to build in contingencies for these service interruptions (through redundant servers and backup transmission lines) there is a danger that you could be without critical services for hours or days. Of course, these contingencies incur costs and require resources of their own. For fax servers, it is advisable to have a second back-up server and a rerouting option for telephony issues, because faxes are quite often time-sensitive transactions. If you don't have a backup plan with appropriate service outage contingencies, business-critical documents may be delayed or go undelivered, resulting in cancelled loans and/or real estate transactions.
4. Is your organization distributed? The golden age of fax servers occurred in the 1990s as companies looked to centralize core services for easier management control and cost savings. Since then most companies have seen a distributed model fit their business better. If you have remote brokers and multiple office locations, then having fax services in one location may not be the most efficient – or most reliable – system for you.
5. Is your telephony environment stable or dynamic? Voice over Internet Protocol (VoIP) has changed telecommunications in corporate America. With sound quality equal or exceeding equivalent PTSN, over 80 percent of companies have adopted VoIP for voice communications. Yet some of these same companies maintain telephony service just to support fax machines and/or servers. If your brokerage has already made the switch to VoIP"or are in the process of doing so – continuing to support an in-house fax server will mean maintaining otherwise unnecessary telephony costs.
6. What is your cost for each page faxed? How much does it cost your brokerage for each page of a mortgage application or credit report? It's a simple question but most agencies have no idea what that number is. And considering the volume of paperwork involved in real estate transactions, this number could be much higher than you think. The simple mathematics suggests taking all the costs of faxing and dividing it by the number of pages transmitted.
We have already discussed how tracking page volume is often unknown and the costs can be even more convoluted, considering factors such as hardware and software maintenance, electricity, telephone lines, and employee time for maintenance and management. If you conduct the analysis of all these numbers you might be surprised to find that your actual cost per transmission is higher than you would suspect. With hosted fax services this number is much easier to obtain and control.
Do a self-analysis and answer these questions about your faxing profile. Knowing this information before you engage a fax server vendor or hosted fax services provider is akin to doing your research before shopping for a house. Knowing your current situation will prepare you to take an analytical approach to the best available solutions. Â
Tim Dubes is a senior enterprise marketing manager with eFax, a division of j2 Global, Inc.
