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Colorado Housing and Finance Authority (CHFA) Achieves Rapid ROI through Capture Enabled Enterprise Content Management
Kofax Solutions Enable Capture-to-Process Workflow and Greater Organizational Agility�
On target to achieve ROI within three years through reduced labor costs and dramatically reduced cycle times
Completed migration from INDICIUS to Kofax Transformation Modules in four months from initial design to going live
Attained higher accuracy than with older system and were able to train the solution with only 100-150 document samples
Enhanced customer service
Home finance division now able to work completely paperlessly
Leveraged technology to provide scalability without linear headcount increase
Able to leverage learning extraction and to capitalize on information contained within documents
Relieved Information Technology (IT) department of system maintenance due to ability of user community to do so
In the state of Colorado, first time home buyers turn to Colorado Housing and Finance Authority (CHFA) for assistance in financing their homes. The organization’s mission is to provide financial assistance to businesses and increase the availability of affordable, decent and accessible housing for lower income Coloradans. In pursuit of that mission, CHFA offers fixed rate financing to homebuyers, small to medium sized businesses, and multifamily housing developers.
The organization has a strong commitment to cost efficiencies that can result in larger investments in programs to help homebuyers and businesses statewide. Brian Mueller, CHFA’s Manager of Integrated Records Management, said, “As a nonprofit, we always focus on investing any money saved back into our own programs that help low to moderate income households, increase community involvement and help businesses grow in Colorado.” As a result, all technology investments are undertaken carefully, with the goals of ensuring rapid return on investment (ROI) and maximum organizational impact.
As is the case for many financial organizations, CHFA’s document driven business processes were extremely long, labor intensive and error prone. For a single mortgage application, CHFA generally processes 272 documents that are available in more than 4,000 variations. As regulations become more complex, the number of documents per application grows each year. Brian Mueller noted, “Approximately 90 percent of our time used to be spent in the paper chase.”
Of primary concern to management were cycle times. Team members had to manually review and classify each set of documents—comprising thousands of mostly unstructured pages that were often inconsistently stacked and ordered—and then manually extract the information so it could be used in a meaningful way. Also, CHFA had no simple way to classify that information and make it readily accessible throughout the life cycle of the loan, including after loan completion and archiving.
In 2003, CHFA deployed a content management solution at a departmental level to help classify, store and manage core human resources documents as well as executive documentation. This document solution was implemented in an attempt to reduce processing delays, cycle times and costs.
While this solution automated a portion of the document management process for two areas within CHFA, Mueller’s team saw the need for a solution that would improve document driven processes throughout the organization. To establish a platform for this, CHFA implemented Microsoft SharePoint Server and launched an intensive backfile conversion process involving more than 72 million records.
Mueller explained, “We made a lot of compromises in terms of classification and indexing of documents. We didn’t go for granularity to the level we needed, knowing that the business users just did not have the capacity in their practice to classify and separate every document to that level.” The backfile conversion process provided CHFA with some archival benefits, such as improving some research times and accessibility options, but didn’t provide the organization with companywide benefits.
Mueller and the executive team set a new goal of improving operational efficiency across the organization, ultimately increasing overall business volume without increasing headcount.
In mid 2007, CHFA began actively seeking an enterprise capture solution that could help automate business processes by intelligently classifying, sorting, scanning and separating electronic and paper documents that contained both structured and unstructured information. In addition, the executive team hoped to export the extracted information for use in other business applications and processes.
After an extensive evaluation, CHFA chose INDICIUS to enable its enterprise capture solution. In July 2008, the team began building its first set of models with the assistance of Shared Services, through its local service provider and the Kofax Professional Services Group.
CHFA took a highly disciplined approach to migration and that, combined with Kofax support, ensured a successful implementation. Requiring only four months from initial design, the migration was complete and the new Kofax system went into production on February 2, 2009. Mueller reported, “We’ve had fantastic Kofax sales representatives. They’ve been very actively engaged in our process both before and after we signed on.”
Targeting CHFA’s home finance line of business was the logical first step for Mueller’s team, as it represented 65 percent of CHFA’s core home finance business and 65 percent of its content. Implementing the Kofax enterprise capture platform, the CHFA team established a process whereby all home finance documents are captured at the time of mail delivery, then delivered electronically. The documents are classified and indexed at a high level of granularity, and are controlled by a centralized team of document custodians and records coordinators.
Knowing that Kofax had been continually innovating within its enterprise capture solutions and had recently developed more powerful and faster technology that was easier to use, CHFA began a migration in April 2011 to the more complete solution available through Kofax Transformation Modules.
CHFA replaced their existing hardware with more advanced devices to take advantage of Kofax Transformation Modules’ ability to use multi-core processors to speed up document processing while requiring only a minimal hardware footprint. They also updated the existing document separation configuration using new samples, and retrained the system.
Together, CHFA and Kofax were able to migrate quickly and easily from INDICIUS. Updating the document separation configuration was made simple since CHFA were able to quickly identify good training samples. Also, it was possible to train the new system with only 100 to 150 document samples, far fewer than were required for the previous solution.
CHFA reports that it will achieve return on investment (ROI) within three years through dramatic reductions in cycle times, lower labor costs, better ability to efficiently handle new business and reductions in office space. The solution has also helped CHFA improve customer service and satisfaction.
Before the Kofax solution was implemented, the CHFA paper delivery cycle required one day per process. Today, the electronic delivery cycle is complete within four hours, and sometimes within 15 minutes. By capturing information up front, CHFA’s loan production process is now completely paperless, and loan servicing professionals can take advantage of individual documents that were once only available in un-indexed groups. Even more significant to the business is CHFA’s new ability to leverage learning extraction and to capitalize on information contained within the documents.
CHFA has achieved greater accuracy with the Kofax enterprise capture solution, and have seen a significant benefit in the ability of the system to be maintained by the user community rather than by IT. Mueller said that this is possible because it’s now easier to retrain the solution and to identify good samples of new document types, which represents a significant advantage to any user of capture technology.
CHFA has also reduced its information retrieval times from more than 12 minutes to three seconds or less. In addition, the company has seen its office space requirements shrink considerably, saving 1,000 square feet of office space in 2010 alone for a cost savings of $150,000.
Because of its wide user acceptance and the dramatic business process improvements, the company is now actively planning to extend the Kofax solution to other lines of business and to continue increasing the volume of documents and information processed automatically without increasing headcount.
CHFA’s capture enabled enterprise content management has made the company more agile. Mueller explained, “Our servicing division deals with a loan after closing for the rest of its life. That’s something we’d never even comprehended before in the paper world. Being able to extract, access and commoditize that information over the entire lifecycle of a loan is really transforming our business. What we’ve realized is that capturing both documents and unstructured information represents a gold mine to the business—the next generation of leveraging content to produce business value.”