Capturing Customers With A New Application

It was the summer of 1997 when Optika approached Critical Technologies LLC about a document and image management solution for a nationwide mortgage company. Jim Rule, vice president of integration at Critical Technologies, was convinced that a distributed document capture installation was the right approach. The installation would allow each of the 200 branch offices of the mortgage company to scan documents remotely. Optika was not quite as confident as Rule. "Optika officials were a little worried when they heard our proposal," recalls Rule. "However, they stood back and let us do our job."

Critical Technologies is positioned as a provider of document imaging and workflow solutions to high-end users in mortgage and insurance vertical markets. The company's installation for United Companies Lending (UC)(Baton Rouge, LA) was the integrator's first attempt at distributed document capture. It won't be the company's last, according to Nick Duncan, CEO of Critical Technologies. "Distributed document capture enabled UC to realize an incredible return on investment. In partnership with Optika and UC, we were able to implement it as part of a distributed workflow," states Duncan.

Critical Technologies, Inc. served as the document imaging division of Duncan's integration company, Global Combined Technologies, Inc. (GCT) (Oklahoma City) and recorded $5.8 million in gross sales in 1997. In December of 1997, Duncan sold GCT to Pomeroy Computer Resources, Inc. (Cincinnati), but held on to the document imaging division. One month later, he formed Critical Technologies LLC. The "newly-formed" company is still headquartered in Oklahoma City and now has a branch office in Dallas. Of the 20 employees at Critical Technologies, half are programmers.

Capitalize On Business Processes
Critical Technologies services mortgage and insurance markets exclusively. More specifically, the integrator focuses on mortgage loan origination and insurance policy origination. "Our approach is to really build document imaging into workflow applications," comments Duncan. "We look for business processes that cycle thousands of times per month and are paper intensive."

The workflow process at United Companies Lending (UC) was typical of what Critical Technologies wants to improve upon. UC has 200 branch offices across the U.S. which accept mortgage loan applications from potential customers. The branch offices collect the necessary paperwork, such as application forms, income statements, appraisal forms, and employment records, from applicants . When the applicant has supplied all the required paperwork, the loan application documents are sent by FedEx to UC headquarters in Baton Rouge, LA, for approval or rejection. If an application is approved, mortgage closing documents are sent by FedEx from UC headquarters to the appropriate branch office to be signed by the borrower.

"It was a paper-intensive process and very expensive for the mortgage company," explains Duncan. "This was not a file-and-find process. Paper was flowing all over the country. It was a risky and costly for UC."

Suddenly, An Affordable Solution
When UC sought a solution to its problem, the company contacted four top document imaging vendors, including Optika (Colorado Springs, CO). Optika, in turn, called upon Critical Technologies, an Optika integrator, to do the integration. Other integrators suggested all documents from the branches be scanned at UC headquarters. Critical Technologies proposed a method for each branch to capture documents, which would eliminate UC's very expensive FedEx bill. The potential cost savings got the attention of UC officials. However, UC's budget threatened Critical Technologies' proposed solution.

"UC had three requests: none of the branch offices could do manual indexing of scanned documents, duplex scanners had to be used because of the number of double-sided documents, and each branch installation had to be within very strict cost guidelines," recalls Jim Rule of Critical Technologies. "I laughed when I heard UC's budget for each branch. The cheapest duplex scanner on the market was $13,000. The scanner cost alone made the installation too expensive" UC's proposal came in August of 1997 and one week later, Rule stopped laughing as Fujitsu introduced a duplex scanner for about $3,000. Using the low-cost scanner, the total cost for the remote document capture application was under UC's budgetary requirements for each branch office. Once Rule met the budgetary constraints of UC, he began a prototype of the application. "The prototype took six weeks and had most of the functionality UC wanted," says Rule. "This was still going to be a multi-million dollar installation for UC and they wanted to see the application in action before they would buy it."

Eliminate Manual Indexing
Critical Technologies used bar-coded cover sheets to index documents automatically at each branch office. This procedure satisfied UC's request that branch office employees do no manual indexing of documents. The branch offices manage internally-generated documents (applications, closing documents, etc.) and documents supplied by the customer (bank statements, employment records, etc.). For every application, the branch office's host computer generates a loan number. The loan number appears as a bar code on a blank sheet of paper. Another bar code, which identifies document type, appears next to the loan number bar code. In all, there are 16 document types. This requires 16 cover sheets to be printed. Every cover sheet contains the same loan number bar code, but different document type bar code.

As documents are collected from the customer, they are scanned and indexed at the branch office. For example, when a customer takes a loan application, 16 cover sheets are created and placed in a folder. When the customer completes the application, the cover sheet for application documents is scanned first. The scanner reads both bar codes on the cover sheet. The bar codes identify the document as a completed application for a particular loan number. The process continues for every document supplied by the customer.

Transmit Images From Remote Sites
Another concern with distributed document capture is transmitting scanned images from remote locations to one site. The 200 branch offices of UC are all connected to headquarters by a wide area network (WAN). UC uses the WAN for all of its communications programs and did not think the WAN could handle the transmission of scanned images. "The images are stored at the branch office on the computer's hard drive. The network administrator at the central office can transmit those images at any time from the branch office," explains Rule.

UC was concerned that transmitting images during working hours would bog down its WAN. The mortgage company opted, instead, to have the network administrator transmit scanned images after hours. The images are transmitted to the central office and stored in a database using the indexes that were applied at the branch offices. "The central database stores all of the documents as the customer provides them to the branch office and the documents are scanned," says Rule. "The mortgage approval process starts at the central office once all document types have been received, scanned and transmitted by the branch office."

Adding Value With Workflow
In addition to a distributed document capture application, Critical Technologies also created a workflow application for loan approval or rejection at UC. When a loan status changes from incomplete to complete, all of the scanned images are packaged and begin a workflow process. "Our custom application holds the packages and then routes them to the appropriate employee," says Rule. "For example, when a loan is ready to be approved or rejected, we route the package of scanned images to an underwriter." Underwriters are located at UC headquarters and determine whether an applicant will receive a loan.

If a mortgage application is approved by an underwriter, the status is changed in UC's mainframe. Then, by use of its workflow and WAN, UC closing documents with appropriate bar-code indexing are transmitted to the branch office. After the applicant signs the closing documents, they are scanned and the images are transmitted to UC headquarters. "All of the original documents are kept at the branch offices," comments Rule. "Even if mortgages are approved in another state, a lot of states require source documents to remain in the state of origin."

A Solution For High-End Customers
While the installation for UC was Critical Technologies' first attempt at distributed document capture, Rule says there is great interest in the application. Critical Technologies is currently working with an investment banking group that wants to use distributed document capture at its multiple remote locations. "I attended a seminar with representatives from UC to talk about the installation," says Rule. "I must have talked to ten companies that were very interested in distributed document capture. Installations of this type are going to be a big part of our future."