I'm a Mortgage Broker, not a Techie!
Is this the right mindset, and how tech-savvy should you be?
As a tech provider in the mortgage brokering space, we hear this all the time:
My job is to broker mortgages, not figure out technology tools!
And in general, I agree with the sentiment- it’s good to outsource non-essential functions in your business.
What what about email? It is tech, and every broker needs to know how to use it. So where do you draw the line?
Outsourcing: The Good and The Bad
The Good
Business school day 1, you learn to outsource all non-essential business functions.
Why? Let’s take tax accounting as an example.
To stay up-to-date with the tax code is a ton of work, and I’ll only use it once a year.
It’s far more efficient to hire an accountant who already knows the tax code, since they’re continually using it with many clients throughout the year. Good!
The Bad
Outsourcing can lead to efficiency, but it also exposes you to risk.
In our tax accounting example, what happens to my business if my accountant retires? Worse yet, what if they retire the same week I am being audited by the CRA.
Unfortunately, your accountant probably won’t leave their beach to help you.
So the 3rd-parties doing activities within your business don’t have their incentives aligned with the overall success of the business. This creates risk. Bad!
A Framework for Your Business
OK so clearly there are scenarios where outsourcing is good, and scenarios where outsourcing is bad. How do I navigate this?
As a framework, try to define all business activities within these 3 categories:
Own It!
This category is for activities that need to be owned by you.
Any activity that is a key to your success needs to be in this category.
For example, we know a top broker who gets 100s of leads each month through social media. He 100% owns this activity to ensure this success continues.
If you need a starting point, list out all activities that you do every week. There are often many key activities that fall in this list.
Be Dangerous
This is my favorite category, and one that I see top brokers put the majority of their activities.
This category should include anything that remains after “Own It!”, but if it were to fail, your business would have difficulty operating.
As a tech example, if you are an online-first broker, you need to “Be Dangerous” on how your website is maintained.
You don’t need to have set it up in the first place, but if your website crashes, you need know what are some likely explanations and who to call to diagnose/fix it ASAP.
Fully Outsource
This category is everything else. Things you can outsource and not think twice about.
In the website example, you should “Be Dangerous” in its maintenance, but not in how it was built. You don’t need to understand the intricacies of HTML and CSS in order to run a successful online-first business.
The 3 Categories and Technology
Hopefully the above categories provide a good framework for tech-related activities like email, calendar, deal submission platforms, CRM, website, e-sign, etc..
Each business thinks about technology differently, so there is no “right” answer.
The important caveat when it comes to technology though is this: tech moves so quickly, and so you need to re-classify tech activities every year (at least).
To go back to email from the intro, there was a time where sending emails was “Fully Outsourced”, and in less than 5 years, those who kept it there fell behind (and quickly).
Expect these types of shift to continue at an accelerated pace in the next decade.
There is no exact guidelines on which tech tools you should “figure out” vs outsource. Ultimately, it depends on your business and how you differentiate.
The most important thing is to stay up-to-date with technology trends, and adjust accordingly. Don’t be the broker who didn’t “figure out” email- until it was too late.
For a full discussion on this, check out the latest episode of Mortgage Tech Talks.