Like many small businesses, Tri-Source Title Agency, a real-estate title company in Columbus, Ohio, wanted to keep its IT costs down and never really considered outsourcing. But when its Windows-based file server started crashing three times a day in 2002, President Richard Blair was spending more time fixing IT problems than managing his staff and doing title work. In addition, its IT costs were rising because of repeated service calls from IKON, its leasing agent, which charged a fee per visit. Mr. Blair realized that outsourcing IT services might boost the firm's bottom-line in the long run. "Band-Aid fixes weren't working," he acknowledged.
Why was it critical for Tri-Source Title to outsource its IT function? "Without the network working, we couldn't address any of our other business issues. We'd start to and then the network would crash. We didn't look at growth because we spent so much time on IT issues," Blair said. When the network failed, Tri-Source's second office in Cleveland was also paralyzed. "We were always reactive, not proactive," Mr. Blair concluded.
Choosing an IT outsourcer occurred almost by happenstance. A Tri-Source employee told Mr. Blair that his brother's small business had used Interhack Corp., a local IT company, and had gotten favorable results. Frustrated by how much time he was spending addressing IT, Mr. Blair contacted Interhack, explained what their IT problems were, and asked them to analyze their problems.
Tri-Source never even asked for an RFP or went through a competitive bid process.
Interhack devised an IT plan and asked for a three-year contract with a fixed monthly fee no matter how many services calls it made to fix the network. That clause sold Mr. Blair on Interhack. "They must think their system works, which would make it profitable for them," Mr. Blair said. The contract was signed in May 2003.
When Matt Curtin, president of Interhack, and his team of three IT specialists visited Tri-Source's office to assess the situation, they were struck by how "labor intensive" its work was. "I looked at the traffic flow and saw people at the fax machines, standing in line, waiting for paper, and then resending faxes. In order to reduce the amount of money they had to spend, we had to make people more efficient," Mr. Curtin said. And that included reducing the amount of time Tri-Source's staff spent answering customer questions on the phone. To devise a solution, Mr. Curtin and his staff talked to Mr. Blair to learn about the title business, their customers, their vendors and how their vendors interacted with them.
"Our solution," explained Mr. Curtin, "was to frame an IT outsource package." It recommended replacing the Windows fileserver with its own Interhack network server, which provides authentication, Web access, e-mail and automated backup service. Further, it was cost effective and would meet the budgetary considerations of a small business. Interhack also reviewed the company's workflow and sought the cause of its logjams. It identified SoftPro, the real estate closing and title insurance software that stored much of its title data, as one of the main causes of breakdowns. Interhack studied how its data was stored, accessed and transferred, and then decided to develop proprietary software that would solve Tri-Source's problem. It devised that system to interact with SoftPro, not eliminate it.
Interhack designed a new application, which it called Protege (the company is now trademarking it), which hosts a Website for the title insurance industry. Protege allows vendors and customers to log onto the site, place orders, track them, obtain confirmation, upload and download documents, and manage content. "It operates much like the Federal Express Website, where customers and vendors can track orders," Curtin said. It greatly reduces the need for customer service via telephone since orders can be automatically placed and tracked. Since Tri-Source deals almost exclusively with banks and mortgage companies, all of its customers use computers and can access its Website. Interhack spent close to five months developing the software and another month to test it before it went live. Tri-Source pays a fee based on the number of orders that are placed, closing times arranged and for storage on Protege.
When the system was introduced, Interhack trained Mr. Blair on its use and all of its intricacies. He then became the official trainer at his company. He organized a day with his staff of 20 people and showed each how to use the software and Website to implement and track orders.
What are the results? "We've nearly eliminated faxes," Mr. Blair said. "We no longer have to do data entry of each title received and don't have any titles lost in the shuffle. Now everything is in digital format." Customers access the Website, fill out forms, schedule closing times online, and everything is automatically logged. Though there was one system crash, Mr. Blair said that the times where the network crashed three times a day, calling a halt to work at his agencies, have been virtually eliminated.
The result is that Tri-Source's staff is more productive since everything has been automated. Mr. Blair said, "Now my staff can do their jobs, providing escrow service, disbursement, ensuring titles, and not spend their time checking faxes." As a result of having outsourced its IT, Tri-Source reports that it cut costs per transaction by 20 percent and doubled the number of transactions it processes each month.
Mr. Blair said that he's paying actually about 25% more annually with the Interhack IT contract than he was on the previous service-for-fee structure. "But now I can focus on doing my tasks at hand," which includes increasing the revenue of Tri-Source, making the contract worth the extra fee, he said.
To stay on top of Tri-Source's IT needs, Mr. Curtin serves as its CIO consultant. He holds monthly meetings with Mr. Blair to make sure IT is keeping pace with its changing business needs. "I am responsible for making sure the information infrastructure is there to support business and whatever its business needs are," Mr. Curtin reported.
Interhack provides an on call systems engineer, systems administrator and technicians who can attend to Tri-Source's IT issues, whether they are urgent or long-term.
Tri-Source and Interhack agreed on a triage approach to solving IT problems. "If it's a revenue-affecting situation with IT, Interhack responds immediately. If it's a nuisance problem that is slowing things down, they'll respond that day. If it entails a minor problem, they'll respond in several days, and that has worked well for us," Mr. Blair said.
When Interhack first started working with Tri-Source, the agency had another office in Cleveland but wanted to expand. Prior to outsourcing IT to Interhack, Mr. Blair had no time available to consider growth. "Growth was out of the question. How could I grow a company when I was too busy fixing databases?" he asks rhetorically. Solving its IT problems provided Mr. Blair with the time to grow.
Tri-Source in 2004 opened two new offices in Denver and in Cincinnati. Interhack met with them to consider their computer needs and whether each office required the same infrastructure that Columbus had. Since the Cincinnati office was doing less processing, its office has a streamlined computer system.
One factor that helped Tri-Source to grow was that Interhack put the emphasis on "information, not technology. We looked at information and made sure the business has what it needs. We can organize their technology if we understand the business and make sure the business flows," Mr. Curtin said. Since Tri-Source has considered expanding to a fifth office, having grown from two when Interhack started, its expansion is proof that IT outsourcing played a role in its success.
Tri-Source Title Agency
Interhack IT Services
Interhack Protege solution
A timeline of the major events for the first year of the Tri-Source contract:
A screenshot of the Protege title closing interface:
A screenshot of the Protege property interface: