Driving Business Speed With Technology

The largest special servicer in the United States, GMAC Commercial Mortgage Corp. boasts a servicing portfolio of more than $253 billion. Niraj Patel, executive vice president and chief information officer, oversees a staff of more than 200 and guides the corporation's worldwide activities in application development, infrastructure, telecommunications and business unit support. Patel has developed a number of proprietary applications for Horsham, Pa.-based GMACCM, including the first investor reporting Web site in the commercial mortgage industry, and has been responsible for rolling out voice and video over IP technology across the enterprise. He shares his views on IT with InformationWeek's Steven Marlin.

BS&T: What's your No. 1 IT challenge?

Patel: Globalization, without a doubt. We have overseas operations in Ireland, India, Japan and Taiwan, for example. We do business and conduct IT operations overseas. Globalization means not only doing business in different countries, but working in different languages. In order to function globally, you need great connectivity tools, things like voice over IP, collaborative work spaces and video conferencing.

BS&T: What function does the IT organization perform at GMAC Commercial Mortgage?

Patel: It's about velocity - how do we speed up our businesses? In financial services, just like manufacturing, we're constantly figuring out ways to move products out faster. In our case, it's about information flow. When we purchase a loan and it goes into our servicing division, we need to look at a financial statement. That statement is an element in the supply chain of information. If I'm not automating that process, it's slowing down the process. Another example is integrating the flow of information between a property management system and the loan servicing system. As CIO, I need to be able to help businesses get information quickly.

BS&T: What distinguishes the commercial mortgage business from the consumer mortgage business?

Patel: The number of loans in our servicing portfolio is more than 60,000, with an aggregate dollar amount of $253 billion. A consumer-oriented business has many more loans but has less information to store on each loan, whereas in commercial mortgages, you're dealing with a huge amount of information.

BS&T: What are some of the organization's core technology infrastructure components?

Patel: We use an IBM [Armonk, N.Y.] AS/400 platform and Microsoft [Redmond, Wash.] SQL Server platform for transactions processing and reporting. The infrastructure is highly robust; we operate redundant data centers, with mirroring for disaster recovery.

BS&T: Is GMACCM's IT culture leading-edge or bleeding-edge?

Patel: We have a good culture in adopting emerging technology. When Microsoft came out with Windows XP, we did a joint test with them; it provided access to Microsoft's best and brightest. We have a heterogeneous environment; the key issue is standardization. We're involved in MISMO, a standard-setting body within the mortgage industry that's trying to foster e-commerce. Our industry is less mature than others in that regard; it's a business-to-business industry, so it's been slow to get standardized.

BS&T: How do you coordinate IT strategy with the parent company?

Patel: I report on a dotted line to Cherri Musser, CIO of General Motors Acceptance Corp. [Editor's Note: The CIOs of GMAC's auto financing and insurance divisions report directly to Musser.] We adhere to corporate IT standards.

BS&T: How large is GMACCM's IT department?

Patel: It's about 200 IT people internally - slightly more than half work on application development, and the remainder on maintenance and support. We don't want the IT brand to overshadow the business brand; the business brand drives the execution, but we've become the enabling tool.

BS&T: Do you process for other companies?

Patel: We do third-party or private-label servicing, where we bundle technology and business-process services. That's a growing business that was created a couple of years ago. Technology is a sub-brand of our business brand.

BS&T: Can you give an example?

Patel: In 1999, we acquired our loan servicing provider [McCracken Financial Software]. Today, it's the largest servicing platform in the commercial mortgage business. [Editor's Note: The system services more than $500 billion in loans worldwide.]

BS&T: How do you charge business units for your services?

Patel: It's not a 100 percent chargeback system; it's more of a hybrid. If a business unit has a specific need for an application or an infrastructure, then we charge it back. When we built our investor reporting tool for our servicing division, the company picked up the cost because it was allocated across multiple business units. It also picked up the cost of our enterprise imaging system for document management, which impacted every business unit. If it touches more than one business unit, then it's financed by the corporation.