Information Technology Enabled Process Outsourcing and Reengineering: Case Study of a Mortgage Bank

Some Business Process Outsourcing (BPO) vendors are providing Information Technology (IT) Enabled Process Outsourcing and Reengineering service to clients. The benefits of the IT Enabled Process Outsourcing and Reengineering approach include long term productivity, service and quality improvements, decrease in costs, and gain sharing in addition to the benefits of the Fee-For-Service Outsourcing approach discussed by Lacity et. al. (2003). The case study of a mortgage bank which outsourced some of its mortgage servicing processes and associated back office functions to a BPO vendor is discussed. IT Enabled Process Outsourcing and Reengineering resulted in the strategic benefit of better customer response time derived from a dramatic decrease in cycle time by about 78 percent. This approach has also resulted in an annual cost saving of half a million US dollars.