Thomas Pryde's Blog

"India" is not the problem

Thomas Pryde — Thu, 16 Apr 2015 12:29:53 EST

In the past few weeks I have been highlighting the fact that the industry is rapidly changing. Some of this change is inevitable and worthwhile, but some changes may prove to undermine the health of the industry as a whole.

One of the most common changes described as being bad for the industry is usually referenced by one word: "India." For some, this has become a shorthand term for off-shoring, and it is usually used as a negative or pejorative term. However, we need to be clear that "India" isn't the problem.

To be sure, there are some serious risks that are taken with any offshored search, but the cold, hard, fact is that offshore searchers are not going anywhere for one simple reason: many clients want searches to be done as cheaply as possible and the risks of offshoring searches have been deemed acceptable.

In essence, local expertise has been devalued, and in cases where it would be valued, the searcher's skills are unverifiable. Those two things create the real problem. If the skill of the searcher cannot be reliably ascertained, why should the client pay more for the search simply because of where the computer and searcher are located?

Rather than speak about the problems with offshore searches, we would be better served to spend that energy demonstrating, in concrete terms, what makes local expertise so valuable. Once that is done, we then need to be able to demonstrate that such expertise can be reliably obtained.

So, here are some questions that may help move the discussion along:

What stories can you share that demonstrate how local knowledge made the difference in one of your searches?
How has your local knowledge tangibly helped your clients?
Besides language, what are the unique problems associated with not having local expertise in your State / County?

Next week: The importance of compelling stories to making the case for local expertise

Independent Abstractors: Well Trained Specialists (Part Three)

Thomas Pryde — Thu, 09 Apr 2015 15:55:29 EST

There are certainly opportunities to succeed in this market. If independent service providers are going to take advantage of them, they must differentiate themselves from the rest of the market, and nothing sets the independent apart from the crowd better than the fact that they know abstracting, in the context of their local areas, better than anyone.

However, while this is a distinct advantage, there are two critical obstacles to getting that message out to clients and convincing them to use your services. Once the obstacles are understood, the opportunities and challenges become clearer.

Obstacle #1 - Priorities:

There are three key values that can be offered: Price, Speed, and Accuracy. The balance of these provides the main value proposition motivating much of the market, and the client may not have market priorities that fall in line with a premium priced product.

For example, the client may want perfect accuracy and absolutely thorough results, but if they are willing to accept some risk on that point, then they will likely prioritize price and speed above accuracy. Further, if the client's client chooses based upon speed or price, a slow service or more costly searches will jeopardize their ability to sell their product. Considering these factors, the client must prioritize the risks and determine if the extra cost of a premium search is worth it.

The market seems to have largely chosen this path. Time will reveal if this is short-sighted, but in the meantime, it appears to be the reality. The bottom line is that if you are providing services in a county that can be done entirely online, you are in a market that can be undercut by cheaper labor.

Obstacle #2 - Messaging:

With that said, if you look at how various services are being sold to clients, you can see that accuracy and reliability still rate very highly. This fact is revealed by examining the messaging of those offering premium services as well as those using offshore or other low cost labor options. Both offer the same assurances of quality.

Turn times are easily measurable, and prices are transparent. In contrast, quality is (at this time) little more than an unverifiable claim, which is one reason why it is undervalued, even by companies who highly value accuracy. If the discount providers offer the client the same quality and turn times at a much cheaper price, why shouldn't the client prefer such an offering?

The independent specialist would counter that they aren't getting the same product, but from the client's perspective, there is little discernible difference. Both are protected by similar E&O insurance, both have the same experience claims, and both assert the highest accuracy standards. The fact is that the client has no way to tell if the local provider has any better claim to quality than the offshore provider.

Lower Prices

Many independent service providers are feeling the pinch as discount providers are dramatically undercutting prices in their markets. In those markets, there are clients who still prefer the personal relationship and thorough reputation of established, local, independent vendors. If that doesn't bring in enough business, finding ways to streamline your business processes may allow you to lower your prices sufficiently to be truly competitive.

Differentiate Services

For all independent providers, it is important to find ways to highlight the difference between a premium service and discount searches. This can mean delivering your searches in ways that make your client's job easier. It may mean that when you go the extra mile on a search, you can highlight where you have done so. I would be interested in comments from the SOT community on ways which independent providers can offer enhanced services.

Participate

Taken as a whole, independent providers make up a sizeable force but is a fiercely independent group that resists organization. In the struggle to maintain a footing in this rapidly changing market, it is tempting to take a dog-eat-dog approach. This will work, and the strong will survive, but independent providers, as a whole, will likely become even less relevant in the process.

A better way is for independent providers to realize that they are actually INTERdependent with one another. The online community provided by SOT is one way to accomplish this, but it is by no means the only way. Professional organizations can also benefit the group as a whole, but maximizing the value of these resources can only be done when the unity of the group is first recognized and understood.

Educate

This is really the point of this article. The message that local expertise results in superior results is not making it to the clients. This may be partially due to a lack of marketing and communication from the independent providers, and/or it may be partially due to the fact that the ultimate clients (consumers and lenders) are frequently insulated from the independent provider that is performing the search.

Even where this is understood there is no way to verify or validate genuine expertise, and therein can be found the biggest challenge. Until there is a broadly accepted education and certification process, there is not likely to be any significant traction gained in regards to the one market value that independent providers can best deliver.

Gains can be made in the other two values, and that will be important. However, very few things would positively impact the market for independent providers better than a robust certification program. Such a program would be good for the market as a whole; it would especially benefit consumers, and independent service providers would have the means to communicate the difference between a discount provider and one with genuine local expertise.

What can be done?

Recognize that you are part of a large group of providers that can significantly impact the market, if there is unity.
Participate in SOT and other social media venues (Linkdin has several communities as well)
Contribute to best practices discussions, in particular, and strive to educate your clients as to why commodity searches are inferior.
Join NALTEA or other professional organizations that can provide the structure for increased cooperation and unity.
Speak up on behalf of better education practices for training abstractors, and join efforts to codify that effort in a certification process.

There is much work to be done, but without a unified commitment to these things, the opportunities will be eaten away slowly, until the idea of independent search services is a thing of the past.

Independent Abstractors: Making Peace With Technology (Part Two)

Thomas Pryde — Thu, 26 Mar 2015 10:51:02 EST

If independent abstractors are going to take the necessary steps to be seen as valued specialists, as opposed to mindless searchers, it isn't enough to rail against the over-inflated promises of technology. There needs to be a clear understanding of what technology can do. Perfection in the document chain is not a promise that technology will soon deliver, but there are some direct advantages that technology can provide.

Like it or not, the industry is increasingly being driven by technological forces. This happens because our clients understandably want to pay less, get results faster, and ensure greater accuracy. Technology can improve results in all three of these areas, but over-prioritizing the first two values can (and frequently does) undermine the last.

For example, it used to be enough to offer unparalleled accuracy, but speed and price have become paramount to many of our clients. As long as they don't have to sacrifice too much in quality, faster and cheaper will win the day. For clients who value price and speed above quality, off-shore operations can offer labor rates that will undercut any US based search operations.

Technology has facilitated this possibility, but offshore operations pose a significant risk: quality inevitably suffers when there is a lack of sufficient local knowledge. To further complicate the matter, doing business with US based companies does not eliminate this risk. "US based" operations can employ an offshore search team.

It is important to point out that the technology that makes cheaper and faster possible cannot actually improve the reliability of the person performing the search, and in the end, search quality is heavily dependent on the skill of the abstractor. With that said, there are some direct advantages to be gained by using technology to automate or facilitate three main processes:

Originating the order - This involves providing an intelligent workflow for those who are initiating the title search. Streamlining workflow is the key objective here, and If the order information can be collected efficiently and passed through the system without having to be entered again, the risk of errors and the cost of redundant labor is greatly reduced.
Eliminating data entry redundancy - This is either achieved by having searchers in house, using the same software as above, or alternatively, it can be achieved by integrating with the search contractor's internal software. A similar goal is achieved by creating a web-based portal for searchers to fulfill their orders. This solves the company's objectives, but it is a double-edged sword since it increases labor for their independent abstractors, which tends to drive up order costs.
Facilitating document retrieval and delivery - A variety of market forces have driven more counties to digitize their data and make that data available over the internet. This allows anybody, particularly the customer, to more easily obtain the majority or even all of the required documents for searches performed in those counties. This is dramatically impacting the business.

Theoretically a full implementation of these technologies could leave the customer and the abstractor doing business with one another directly. Ideally it would, but the reality remains that in between the origination of the order and the person actually doing the search there are a variety of businesses, processes, and other factors that all add cost and time to the order. Used effectively, technology can at least minimize the impact of these factors.

By understanding the forces of technology that are changing our marketplace and taking advantage of the available technology, independent abstractors can compete in this increasingly technological world. That is why the company I lead exists, but ultimately technology can only be part of the solution. The market needs to see that errors resulting from inexperienced searchers, either in the US or offshore, ultimately hurt the customer (and the consumer in the end).

Independent abstract specialists can and must make the case that their local expertise provides a significantly more reliable result. That is the difference between being an abstract specialist or a mindless searcher. Technology can help you be more efficient, it can help you be faster, and it can even help eliminate some kinds of errors, but only a pair of well trained eyes can provide consistently reliable results.

Next Topic - "Independent Abstractors: Well Trained Specialists (Part 3)"

Independent Abstractors: Dying Breed or Valued Specialists? (Part One)

Thomas Pryde — Thu, 19 Mar 2015 13:04:12 EST

The prevailing view among some industry leaders seems to be that the independent abstractor is a dying breed, the last vestige of an ancient way of doing business. This is attributed to the rapidly expanding digitization of title documents and new technology solutions that are being designed to quickly and efficiently obtain and deliver those documents to their clients. This is one example where technology has made promises well beyond what it can actually provide.

While it is true that the need for independent title abstractors might actually be eliminated if the idealized descriptions of a technology provider's capabilities proved realistic, proclamations of the imminent demise of their business may be premature. In fact, the independent abstractor has a real opportunity that seems to have been largely overlooked, but in order to understand and take advantage of this opportunity, we have to first examine the promised market of full digitization and automation.

In this oft-prophesied and idealized market, all archived public documents will be available both remotely and digitally, and the client who needs these documents would be able to simply and efficiently obtain them, removing the need for someone to go to the courthouse, manually obtain documents, scan them, and then deliver them back to the client.

All search-related activities could be performed remotely, and there would be no need for any local expertise. This is the essence of what is promised on the back of technology.

However, if digital availability was ubiquitous, if the digitized documents were perfect, and if all the related data was flawless, such technology might indeed eliminate the need for a skilled abstractor. However, achieving such perfection in the document chain would also virtually eliminate the need for the title insurance industry as a whole.

Of course, the reality is (and will continue to be) far from this ideal, and title insurance companies will continue to thrive on the potential existence of problems that might be found in any given document chain. As long as this is true, local expertise and timely results can work together to offer a value proposition that will ultimately trump a mindless search service offered at rock bottom prices.

Introductions

Thomas Pryde — Tue, 10 Mar 2015 14:05:59 EST

I plan on starting to blog here at least once a week, but before I start, I wanted to introduce myself to anyone who might be interested and to outline the scope of my future writing.

I am a relative newcomer to the industry, but I have a long history of building computer-based solutions for education, data security, and technical integrations. It is this experience, and a serendipitous friendship with an abstractor (Alix Ott, from here on SOT) that brought me into this industry.

I was brought in to rebuild and manage a custom software into something that other abstractors and vendor managers could use. That resulted in the company that I lead, Boxi Software. In order to undertake this project, I had to learn about the industry, about abstracting, about the market forces that drive it, and about the changes that introduce both threats and opportunities.

This journey and the years of research and development leading to this product has provided me with a unique perspective on the industry. Mainly, as I have learned over the last few years (and continue to learn), our industry has an uneasy but necessary relationship with technology. This is true, even while it has become increasingly important.

I hope to contribute to this community by writing on technology related issues that may be of some help to abstractors and vendor managers.