Is Wrangling Your Technology Like Herding Cats?

The more and more systems we try to connect with each other, the less and less we achieve our goal, and that’s automation.

I had to go the bank today to deposit a check. Yeah, I prefer the bank wire for all my receivables since I travel so much. But, I was sent a check in the mail and had to go deposit it. The teller was already aggravated. The check scanner was not working right with the bank account software system. Then, she mentioned that sometimes, bank systems just generally don’t talk to each other well anyway, and off she went to try to find someone to fix the problem while, I waited More time waiting for automation to work.

We have so much technology these days and that’s great. The problem is not a lack of technology, but the lack of communication between technologies. Those interfaces, integrations or API’s that we hear about all the time are making the movement of data from system to system either a fine seamless process or like herding cats to get all the systems talking to each other.

The Process is Still a Process: The agencies client has to dump their system data into SQL to query the accounts that it wants to send you for placement. Then, a file is created and the client’s IT department loads it to their FTP site and they send you an email, “file ready”. . Great! Once you get the file, you send them an email that you got the file. You download the file and send another email acknowledging you received x number of accounts for $X volume. Well, there are lots of manual processes in this process and all due to the lack of systems talking to each other efficiently.

Enter the cat wranglers that actually can herd data. These are data guys that can link all your systems together and build a flow of work between all processes and create automation. So, how does this process work?

The Automation, aka, Herding: The client defines the account parameters for the placement for you. Then, they enter that file into the Cat Wrangler and it sends an email to the client acknowledging the file has been created and posted to the FTP at 12:00. An email is then sent to the agency to pick up the file at 12:01 PM, followed by an email to both parties the file was downloaded and deleted on the FTP at 12:22 PM. The agency sends an acknowledgement to the Cat Wrangler and it stores that data in the system of record. If that acknowledgement is NOT received within 24 hours an email is sent to both parties.

So do you need a Tech Wrangler? Yes, you do.

I have technology that will link and create seamless flows between all your collection systems:

System of Record

Dialer

Placements

Letters

Payment Portal

Skip Vendors

Reporting Tools / BI

And all the rest too,

So Saddle up …Let’s Ride!

Phillip W. Duff

Chief Tech Wrangler and CEO Lighthouse Consulting

904-687-1687

I remember when collections was simple. By Phillip W. Duff

Collections processes used to be simple but actual debt collections was not easy here is a great example of a payment process in the 80’s; The debtor, yes they were called debtors back then, agreed to send you 12 postdated checks for $56.11 each to pay his Shell Oil bill. You talked to him at his work so he had to go home to get the checkbook and write out 12 checks dated one month apart. Then since you created such a sense of urgency in getting the payment ASAP he goes to the Greyhound bus station with the checks. Remember this is before FED Ex, UPS, Express mail…The debtor sends the 12 checks on Greyhound Package Express and it arrives 2 days later at our local Greyhound station for pick up after transferring from bus to bus. The collection manager drives to the bus station daily to pick up our packages and then they are posted to the account. BTW the second check usually bounced.
Collections used to be simple. You needed the collection system to show you the account and that’s it. The collector did the rest – send a letter, set dates ahead….. All the hard work was to train the staff to perform the tasks well.
I was a collector at GC Services when that first collection system of record showed up in the early 80’s. We moved from ledger cards to that system, and eventually it worked well, to bring up the account. This was easier than finding the ledger card – trust me! And that is all we needed, and that is what the system was designed to do – show the account, period. Name, address, phone number, amount owed, letters sent and notes – that was it.

Today, we cannot let the collector make the decisions on what account to call, when and where to send letters, skiptrace or most other activities. We now desire the business rules to determine the account flow and frequency of calling, so we need much more control. 

Add compliance, consumer lawsuits, client requirements, educated consumers – and it’s suddenly got very, very complex. We need a system that can stop that collector from making the call or sending the letter. Ironic huh?
Now let’s add in the volatility in the collection software marketplace. Providers are often changing ownership by sale or merger, and this changes the focus with each ownership change. Can you trust your software to a company that was just purchased? Or one that just merged with the competition?

Why would you go with company that has 5 versions of software and some of those versions have failed to sell or work properly and were recalled? What are they trying to do? 

As a consultant to the collection industry I could align myself with any vendor so why do I choose Quantrax and RMEx? it’s simple. It is the best software solution for my clients. 

Quantrax was built in a way that other systems have not embraced change and innovation, and that structure and the power of an IBM platform will be the wave of the future. So get on the boat now or later. It’s up to you. By being positioned for the future you will be the future. Quantrax has had one owner and in fact, the same owner from its inception to today. With only one vision for the last 25 years, to create the most powerful EXPERT collection system on the planet. 

If you want to see all the major differences between RMEx and other systems just take a 1 hour demo. Face it, you’re going to change software at some point. Why wait?

What kind of leader are you most like Captain Kirk, Richie Cunningham or Archie Bunker?

Archie Bunker from the 70’s sitcom “All in the Family” was known for not accepting change easily. He preferred to stay in his own world, even though the world was passing him by.
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“If everything is good in the henhouse you don’t have to go out for eggs”.
He was fine watching the changes around him while trying as hard as possible to ignore them.
“He’s got some grand strategy that he can’t revulge.”
If you are like Archie as a CEO, then you are going to have some issues in the future as the industry continues to become more complex. As you add regulations and client restrictions to today’s intricate collection process you will need better tools, better people and better processes. If you are like Archie Bunker and not so willing to embrace technology and new ways of doing business, it is very likely that you will be left behind.
Maybe you are a little bit more like Richie Cunningham from” Happy Days”? Richie tries to be innovative and new, but was never very successful. He was only willing to take limited chances and therefore he had only limited success.
Come on, Fonz, haven’t you ever dreamed?
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If you are a leader in the image of Richie Cunningham, it is likely that you are considering making changes to your business but it is seldom that you actually do anything new. You are constantly dreaming of a better and more efficient business platform, while you continue to work on the platform you currently have.
Maybe you’re like Capt. James T. Kirk from the original “Star Trek” and you are looking for new frontiers and bold new ways to do business? If this is the case, you will probably find them. 
“You know the greatest danger facing us is ourselves, an irrational fear of the unknown. But there’s no such thing as the unknown — only things temporarily hidden, temporarily not understood.”
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If you have the attitude of Captian James T. Kirk, then you will be likely to succeed in the collection industry. But if you are afraid of change like Archie Bunker or do not embrace change or do enough like Richie Cunningham,  you may have difficulty making it to 2020.

What are the people who are succeeding in this marketplace doing different than you?

Have you gone to a conference or looked at industry publications and see that a competitor and just another entity in the industry seems to be in a growth mode while you are just trying to pay the bills?

So what are they doing that you are not doing? Well first lest explore what you are doing, I guess that your waiting and hoping, but that will never get you more clients, automated processes, compliance or increased profits.

The people who are succeeding are constantly reinventing themselves! Yes thats the secret they are willing to invest in change and in fact embrace it. I entered this industry in a similar time in the debt collections history right after a big legal decision that changed the industry forever, the FDCPA! And many agencies were just in shock for a few years and just waited for someone to better define the law and its repercussions. Others decided to figure out to collect money within the constraints stated in the new very restrictive law. The FDCPA was a much bigger shock that the recent FCC ruling regarding TCPA but we have all learned to work within its borders and in fact embrace the restrictions and its ability to help police the industry.

So back to reinventing yourself, how do you do this and more over how do you do it every month, month after month? Well first its a mentality to be proactive not reactive. Secondly its a constant battle to get and assimilate info and current trends in the industry which takes many people to do. This may require info from your council, collections gurus, consultants, vendors and industry leaders. The people who are growing are using every resource available to them to foresee and prepare for industry changes. They do not look at the changes as something personal or aimed at their business they look at them as hurdles that must be overcome while maintaining profits and company standards.

If you desire to get help to reinvent your company or management style call me at 904-687-1687.

3 Things you should do before 2015 to achieve success in the ARM industry

Planning! Yes it is very important to have a detail plan of the direction of your company in order to achieve the best results. I know you have one in your mind but what good is it doing the staff stored in your mind? If you want the staff to buy into the plan they have to be able to understand it at a detailed level and believe it is obtainable.

Here are three things you can do help create and spread the message. The first is to clearly define the direction of the company and make the definition clearly understood by ALL the staff. I use a strategic planing form I call the SUCCESS DASHBOARD to help my clients put the plan on paper and to cover all the items critical to its success. Items like the Core values, Marketing targets, Brand promise and Financial goals are included in the form and it allows the CEO and key staff to clearly define the objectives needed to obtain success in the coming month, 90 days, year and further. (If you desire a copy of the SUCCESS DASHBOARD please contact me at phil@lighthouseconsultinginc.com)

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Secondly, It is very important to take the goals you have just created and then create an Action Plan to help achieve the objectives. The Action Plan must include both short term and long term goals and have a clear plan as to the key players and the items that are critical to success. The items must be closely measured over the time period and changes in the plan may be required in the milestones deemed critical to success that are not being met.

And third the success plan must be shared and distributed to the staff in a way that allows the staff to understand and buy into the items that are critical to success of the Action Plan. It is also very important to show the staff the managements commitment to make the plan successful and to share with the staff its milestones along the way.

The plan must be printed and presented to the staff in a format that they can absorb and understand. The staff must also believe the goals are obtainable and that management will do whats needed to meet the goals.

If you can follow these three simple steps you will be on the way to success in 2015.

If you have not yet done this then then time is now, good luck in 2015!

My thoughts and opinions for the recent NARCA conference

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Many people look to see what my observations from each conference I attend the ones that did not attend want to see what they missed and the ones that did attend desire confirmation of their observations. So here are my thoughts and opinions after leaving NARCA Fall Conference in Las Vegas.
The primary theme is important for each conference and its been compliance and loss of profits over the last few events. Well that has given way to talk of mergers and partnerships. Compliance is now a reoccurring theme and is considered to be here to stay and has now taken a second seat to the fact that issuers are trying to consolidate their networks. The issuers and placers of debt are driving the consolidation within the legal collections market. As they desire to reduce the risk of compliance to fewer firms the smart firms are becoming multi state and growing in size by buying or merging with others.
Many of these mergers are lateral, meaning that little or no money is exchanged. The firm in MO decides they need to be licensed in NE and IA and merges with a firm in that state. This will continue for the next 3 years leaving 12-15 firms with most of the national legal collections.
Compliance is now the norm for each firm and just a cost of doing business. The talk is now about how to drive compliance most efficiently. The next step that few firms have made it to is the question “ How do we prove our staff is complaint to the rules?”. How do we use the data collected to increase compliance and collections.
“How do we analyze our firm and make adjustments” is a big question. In my opinion this is very difficult with current legal software systems and that fact is driving firms to look for other solutions like Quantrax or newly built systems. The ability to have a user defined system allows the firms to make adjustments on the fly and without the cost of custom programming. All systems will head this way over the next 5 years in my opinion but many firms are trying to get ahead of the curve with new technology today and not waiting on new versions of software to be developed and honed into great systems.
One of the questions I am ask often is what should I be paying my staff, am I overpaying my staff, how do I reward my staff? These questions are based on your profitability and firm structure but the answer is yes your overpaying all your staff that have been there over 10 years. Yes all of them, lawyers and paralegals…
What does the future hold for YOU? Well that depends on what your doing now, if its just waiting and holding on you will be out of the picture in 3 years or an employee of another firm. If your making big strides to move forward and not just meet or outrun the industry changes you will be standing at the end and standing tall. If you do not have a clear strategic plan for the next quarter, year and decade you are not likely to survive. If you just saying I can’t afford to do this to that your right cause you will be left behind, only the aggressive will survive and thrive in the new collection industry.
If you need help to survive and thrive call me. But do it now. No really right now 904-687-1687 ask for Phil Duff!

Do You Have a Strategic Plan for 2014? Have you shared it with the staff?

In order to be successful you must have a plan. Many CEOs have a plan but it is only in their mind.  They have not committed it to paper or shared it with the rest of the staff.  If you don’t share it with your staff how do you expect the staff to help you achieve the goals you have set for the organization?  For the past decade, I have been helping clients of Lighthouse Consulting to make strategic decisions, document them, share with the staff and get buy-in from the staff.

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One of the key mistakes many leaders make is not sharing there vision with the staff. The problem arises because the leader is concerned that if he or she states the overall goals, and they are not met, it will not only affect the staff but their image of management. Many years ago I created a success dashboard as seen here. It is important to discuss and agree on the factors stated there. Core Values lead to Core Purpose and a  clear understanding of your Core Purpose can drive your organization to excellence.

Ultimately, you’re not a leader if no one is following. Exceptional leadership requires a climate of trust where people give you their wholehearted commitment. In order to do this they must understand and trust the plan.

Great leaders are defined by a clear sense of purpose and they rally others around to promote that purpose. Vision involves having a clear picture of a meaningful future that you are committed to and passionate about creating. Once a Vision is created, then a plan must be made in order to reach the goals. Ultimately, leadership is about taking people somewhere and accomplishing something.

Most great leaders will tell you they did not do it alone.  Rather, it took their staff, consultants, training and a clear plan. Lighthouse Consulting has been helping its client base to make strategic decisions and implement effective operations plans since 2003.  If you want assistance creating your success dashboard contact us today.

How the ARM Industry in 2014 is like High Stakes Poker in Las Vegas

As the ARM industry begins to consolidate and evolve as a result of a new regulatory paradigm, so do the businesses involved in debt purchasing and debt collection.  As a consultant, debt broker and M&A consultant for the ARM industry I see many collection agencies and law firms in both their best and worst of times.  Often as a consultant I am engaged and when things are not going well and as a debt broker the opposite is usually the case.  When I am doing mergers or acquisitions usually there is someone with a large stack of chips and performing at the top of their game and someone on the other side with a few chips left.

Historically the collection industry has always been an industry that has ebbed and flowed based on inventory levels.  When a collection agency or law firm was able to get a large amount of quality placements they would be at a high with lots of chips sitting in front of them.  Conversely, when the chips in front of you or your placements are low, the business becomes more challenging and less profitable.  The one thing I have consistently noticed over the years is the businesses that were willing to spend their chips on performance enhancements would gain market share and therefore a larger stack of chips.

Until a few years ago the collection business was based upon only two factors; your ability to perform and your ability to provide an ever growing pool of placements. With the onset of onerous levels of regulation, the business has changed again and taken many of the chips off the table, even for the most established and profitable firms in the market.  As issuers and debt buyers reduce the amount of placements available to the market, there are less poker games and fewer chips available. This is what will drive the consolidation and evolution of the industry in 2014.

In a market of tight supply, the players remaining will need to be more strategic about how they go about amassing chips in front of them.  In this environment, there is a need to change the business model in order to succeed.

The game has changed and it now it now favors the bigger players with deeper pockets that can satisfy the needs of the issuers and debt buyers. These stakeholders want the players to be able to handle the intense regulatory scrutiny in today’s marketplace which requires a significant stack of chips and a higher ante into the game.  The stakes are much higher and the cost of entry has also increased but the payoffs scream for the effort to be made.

The small guy who is selling his business to the guy with lots of chips will increase his chip share while the buyer will reduce their stack.  The hope is by combining forces they will be a stronger partner and able to survive the ups and downs of the game. The business will truly fluctuate just like your chips at the Las Vegas poker table and just like the poker table the trick is to be strategic with your moves and know when to fold ‘em and cash out.

If you are looking to increase the chips in front of your business then call Lighthouse Consulting for some inside tips. We will be able to help you make the strategic moves that will allow you to end up with the biggest stack of chips.

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Lighthouse Consulting has been providing solutions to operational compliance challenges and M&A consulting for ARM companies for over a decade. Contact Phillip Duff, CEO of Lighthouse Consulting today and let us help you navigate the compliance landscape.

Phillip Duff, CEO | www.LighthouseConsultingInc.com | Phil@LighthouseConsultingInc.com | (904) 687-1687

Maximizing the Sale Price of Your Law Firm Avoiding the Common Mistakes Sellers Make That Reduce Valuation at the Time of Sale

Avoiding the Common Mistakes Sellers Make That Reduce Valuation at the Time of Sale

There are many reasons that a potential buyer of your law firm or collection agency will pay you less than your firm is worth. The biggest reason will be your decline of revenue. During the merger process, the mountain of documents and information requested by the potential buyer overwhelms many owners. During this period of time, the managing partner or owner is distracted from their daily affairs and often this person is the “rainmaker” for the firm. When this happens, revenue begins to decline and the potential buyer begins to reduce his or her offer

There are other reasons for the decline of revenue within a firm that is going through or considering a merger. Many of those are directly related to the staff’s knowledge of or rumors of the potential sale of the business. As the documents are gathered for the potential buyer to review it becomes more and more likely that current staff will be involved and will begin to ask questions and start sale rumors.

As a business owner you should continue to focus on the daily affairs of your business while a team works to provide the potential buyer with the due diligence documents required. This can be done in two ways; the first is to create an environment of open information by informing your staff of the potential merger or acquisition and asking for their buy-in to the process. There are many problems with this potential process as many employees will see this as a negative event and begin to focus on finding another job. Many others will just be distracted by the unknowns and be far less effective. Only a very strong business culture can withstand this without decline in revenue and productivity.

Another way to handle this need is to hire an outside consultant to work with the potential buyer on your behalf. Using a third-party to polish up the firm is the direction most smart business owners will choose. Hiring a professional who is familiar with the process, needed documents and the possibly the potential buyer, will allow the owner and staff to focus on daily affairs and continue to increase the level of revenue within the company.

If you are thinking about merging or selling I would suggest that you be proactive in the process by creating your own due diligence team and putting together a due diligence package for any and all potential buyers, prior to receiving their requirements. By being proactive in creating a due diligence package you will not only locate the areas with opportunities for improvement, you will look much more professional in the face of the potential buyer. If you will take the time to polish up your business just like it was a car you were trying to sell, it will look like it is worth more money to the potential buyer.

If you are looking for a third-party to help you polish up your law firm or collection agency Lighthouse Consulting is your choice.

The #1 Reason a Merger or Acquisition Fails

What Kills Most Mergers or Acquisitions? Deal Fatigue!

Many merger deals end in a pile of paperwork and countless, endless emails with seemingly pointless questions. This is what I call “deal fatigue”; when one are more parties involved in a merger or acquisition throw their hands up at the amount of information required to make the deal happen. In most cases one party feels overwhelmed and financially disadvantaged by the deal process and decides it is easier to just give up. In most cases, deal fatigue works itself out and the deal gets done; it just creates very long delays and both parties to the transaction become extremely irritated. If you are the one being acquired it may also reduce the amount you ultimately receive.

With the changes taking place in the collection industry today, consolidation is a new reality for most sectors of the industry. As these mergers and acquisitions begin their process there will be many obstacles for the parties involved.

How Do I Avoid Deal Fatigue?

In order to expedite the merger process you need to be proactive and prepare well in advance of the diligence process. By compiling a diligence manual or package that a potential buyer can review, you will shorten the diligence process and expedite the time to closing the transaction. The diligence manual provides detail information on your firm, collection strategy or legal process, staff members, technology assets, audited financials, the principles detailed bios, resumes and background checks along with many other supporting and financial documents you will ultimately have to provide or produce prior to closing a transaction. By being proactive, you will look prepared, organized, and confident and be miles ahead of the competition when it comes time to negotiate.

Most of the law firms in the collection industry were built as lifestyle businesses and therefore will need some polishing to look appealing to an potential suitors. Since many of the law firms and collection agencies that will be consolidated have never experienced a merger or previously been acquired, they will require assistance preparing a due diligence package that is both comprehensive and promotes the company in the most favorable manner.

Copies of equipment lease agreements, credit card statements for 3 years, building leases, vendor agreements, client contracts, compliance audits and certifications and much more will be required to sell your law firm of agency. Lighthouse Consulting has been evaluating law firms and collection agencies for over a decade and we can help you navigate these transactions and help prepare your firm to be competitive in the consolidated marketplace.

Putting the Lipstick on the Pig

That’s not to say that your business is a pig, but to an outsider without the emotional attachments to your business, perceptions can quickly turn into realities. The time to prepare for a potential merger or acquisition is LONG before the discussions and negotiations get started. Start now to create this package and then get a professional to put the lipstick on it. Chances are you have been busy building your collection company and have not been spending your time to make sure it looked good to someone else. As we build our own company we worry much more about it surviving and much less about how it looks to a potential acquirer, but as you begin to market your business for sale you may need to put some “lipstick on that pig.”

It’s important to hire a professional like Lighthouse Consulting to provide the guidance and knowledge to help you polish up your business before it is put up for sale. If you would like to discuss how Lighthouse Consulting can help you to merge, be acquired or purchase other companies call us today at 904-687-1687.