Arc Home is a nationwide residential mortgage provider based in Mount Laurel, New Jersey, that provides personal mortgages and serves as a wholesale and correspondent lender.
As a mortgage lender and servicer, Arc Home needs to account for the volatility of the mortgage business by regularly adjusting drivers, assumptions, and financial models to be in line with changing market conditions.
Arc Home uses Datarails to consolidate data used for monthly variance reporting and accelerate its financial reporting and planning processes – and has succeeded in shortening its forecast cycle, saving three days a month, and gaining more time for value-added analysis.
The problem: thousands of data points, slow reporting and planning
Before starting to use Datarails, Arc Home was having difficulty consolidating its thousands of data points to easily identify key drivers and quickly conduct variance reporting for its monthly forecasts.
Arc Home was eager to make those processes more efficient and less time-consuming, but at the same time wanted to hold onto the flexibility it already had with Excel, which allowed it to easily make changes and updates as needed.
Datarails has allowed us to look at product-level profitability, so we’ve been able to more granularly analyze the profitability of the company and what are the key drivers.
Massimo MonacoCFO
“Within the mortgage industry, we look at thousands of pieces of information that then need to get rolled up into like types,” said Massimo Monaco, CFO of Arc Home. “I was getting thousands, hundreds of thousands, of records in Excel from our IT department, which I then spent a tremendous amount of time organizing, sorting, and consolidating the data, to then do the analysis.”
To prepare the variance reports, the finance team had to create a consolidated variance report based on “a tremendous amount of Excel files” and edit the links, time that could have been better spent analyzing the variances to better evaluate their potential impact on the company.
“Before Datarails, we spent close to three to four days a month just creating the monthly variance reporting, combining the data from various Excel files,” said Massimo. “The preparation of those variance reports reduced the amount of time we’ve actually analyzed the data.”
Massimo had previously deployed other financial planning solutions, but he had found them to be costly and time-consuming to implement, as well as requiring extensive technical support that adds a layer of complication and reduces the finance team’s autonomy.
He began the search for a better solution, and later discovered something else about the ones he had previously tried: “They didn’t have the flexibility that Datarails provided.”
The solution: Speeding everything up allows us to analyze important trends
Arc Home uses Datarails for variance reporting, saving time in part by creating simple lookups to automatically update monthly forecasts – and using that time to analyze key profitability drivers with much more granularity.
My favorite thing with Datarails is the ease of use.
“The specific challenges that Datarails solved for us were the ability to do variance reporting off of different forecast versions, and to do it fast,” said Massimo.
“Now the reports are built, and you can change the assumption within a few seconds,” he said. “The speed at which we’re getting that information, I think, is really the value of Datarails.”
The speed gives Arc Home more time to analyze the data, while the visibility provided by Datarails gives the mortgage provider greater granularity and insight into how the business is doing and how to make improvements.
“Once I develop the structure of the data, it’s as simple as uploading that file into Datarails, and then I can generate the summarized reports – which then allows me to analyze trends and better see what’s going on with the business,” he said.
“What Datarails has facilitated is the ability to dig deeper into the specifics,” he said. “Datarails has allowed us to look at product-level profitability, so we’ve been able to more granularly analyze the profitability of the company and what the key drivers are.”
Arc Home uses Datarails dashboards to bring together both operational and financial KPIs.
“The dashboarding functionality of DataRails allows you to aggregate disparate pieces of information from different systems in your organization,” said Massimo. “It aggregates it, it consolidates it, and it allows for a more comprehensive view of what’s going on within your business. So you’re able to connect financials, operational metrics, and other KPIs within the business.”
Working With Excel to Keep Up With the Volatility of the Mortgage Business
It’s important for the finance team to be able to continue working with Excel – especially with their existing financial models – so it can have the flexibility to keep up with the volatility of the mortgage business.
The reason I prefer an Excel-based model is it allows for a tremendous amount of flexibility and functionality.
“Throughout my career, what I’ve really found is the best planning solution is an Excel-based model, which then leverages a system to create more automated reporting,” said Massimo. “The reason why I prefer an Excel-based model is that it allows for a tremendous amount of flexibility and functionality. In the mortgage business, it’s extremely volatile, so assumptions are continually changing.”
In addition to being flexible, Datarails is also intuitive and easy to use, he said.
“My favorite thing with Datarails is the ease of use,” he said. “I do not need to hire a system admin. We didn’t need to encourage a tremendous amount of IT spend. It is very user-friendly and easy to use. I by no means am a tech person, and it was very intuitive to use the product.”
“My experience with Datarails, to date, has been fantastic. The company establishes a true partnership with you,” he added. “And there hasn’t been a challenge that I presented that they haven’t solved.”
The impact: saving 3 days a month, shortening the forecast cycle, and increasing analysis
With the help of Datarails’ consolidation and automation, Arc Home was able to save three days a month on planning and reporting as well as shorten the forecast cycle.
“What Datarails allowed us to do was consolidate a tremendous amount of data into key drivers, which we then loaded into the system to accelerate the forecasting process and also the reporting process,” said Massimo. “Now we were able to cut that from three to four days to roughly half a day.”
In addition to shortening the forecast cycle and saving time, the finance team at Arc Home is now also able to spend more time providing value-added analysis to drive the business forward.
“How Datarails has helped the business overall is that it’s just reduced the amount of non-value-added effort that was required to produce the forecast as well as the variance reports,” he said. “So we shortened the forecast cycle, and we spent a lot more time analyzing the data.”
