Technology in Valuation Business – Implementation Challenges


Technology is not new to Indian Valuation Firms. Several sizeable valuation firms have managed vital business problems by automating their processes. Software for managing micro-processes like initiations or assigning cases or raising invoices or generating reports, etc., were built to handle specific needs of that particular valuation firm. Though used only by large firms, technology is not new to the Indian Valuation Industry.

Changing Perception:

We are witnessing a paradigm shift in the recent past. Technology from being a micro business problem solver for larger firms, the software is increasingly getting perceived as a business enabler. This perception change has resulted in technology adoption by all firms, including medium and small-sized firms.

Motivators for Perception Change can be Morethan One Thing
  1. Unlike a decade ago, all Financial Institutions are now fully digitized. Valuation Firms also tend to benefit if they are also digitized as communication becomes more transparent and structured.
  2. The recent advancements have made technology far more accessible to adopt than earlier.
  3. The long-term success stories emanating from developed countries where Valuation software has been in existence for nearly two decades now. 
  4. Increased peer competition within the industry
  5. The overhead costs are increasing; however, the margins are diminishing  
  6. Increased Regulatory and statutory compliance requirements.
  7. Workforce churn is a significant challenge existing in many industries. The cost associated with recruiting and training a new resource is much higher in the current scenario.
  8. New Technology helps in scaling a business to other geographies with better control.

Need for software realized, but there are Impediments.

Valuation Software – Cost or Investment?

It is a valid question any prudent businessman would try to answer before deciding. Cost in simple terms is an expenditure incurred to sustain or meet day to day needs. 

The cost incurred is on a transactional basis and impacts short terms returns. On the other hand, investment refers to those cash outflows incurred with a belief of a strong possibility of future returns. When invested, the gains and benefits spread over some time. Profits could be in the form of cost reduction or business growth or risk reduction or increased controls or a combination of many of those. This Cost or Investment decision needs addressing before deciding on technological adaptation.

Technology is expensive:

It is a widespread belief that technology comes with a considerable price tag. This statement is far too generalized to be classified as factual. 

The activities of any Valuation Firm, big or medium or small can get broadly classified into three layers:

Layers of Technology Implementation

The Business Layer comprises all the outside world interactions which a Valuation firm does in the normal course of its functioning. It includes client communications and interactions, reviews, interactions with borrowers, invoice management, and many others.

Process layer includes the internal processes followed by each valuation firm starting from document collection to workforce allocation to site visit completion to report preparation.

While the above two are the science involved in Valuation, the 3rd and most critical “Professional Layer” indicates the “Opinion” of the Valuation. It is in this layer, the Art of Valuation put to use by the Valuation Expert basis his expertise and experience.

There exists a consistent interaction between these three layers in any valuation firm.

The layer the Technology addresses, the complexity of the problems the layer possesses, and the effort required & resources available to solve the problem decide its price. The Business Layer will be carrying the least of the price tags as these solutions are more generalized and applicable to almost all businesses or services. Next in the ladder is the Process Layer. In this layer, the Valuation Process, including report generation, gets managed, which will help directly reduce costs, minimize risks, reduce dependencies on the workforce, etc. It is a problem specific to the valuation industry, which is very niche, and resources available with the know-how is very minimal. Hence this will come with a higher premium than business layer software. The niche of all, Professional Layer will be the costliest of all. This solution developed with Intelligence inbuilt into such as an Automated Valuation Model is a good example for this layer wherein the expertise and experiences of the Valuation Expert get inbuilt into the software. Hence it demands a much higher premium than the rest considering far more investment in superior technologies and resources involved in solving the problem.

The layer-wise segmentation can help in evaluating the price of the software. 

Depending on the need, a Valuation firm may choose from the multiple products offered by Evalo catering to each of the above layers. In general, starting to implement technology with Business Layer leads to implementing in Process Layer. Both combined leads to implementing in the Professional Layer as Business & Process Layers feed in the necessary input “The Data.” 

Resistance to Change:

Technology adoption is synonymous with Transformational change. During the implementation stage, resistance to change will emerge. The resistance will be two Dimensional.

Resistance at Employee Level generally emerges for the following reasons:

Transparency Fear – Technology helps to manage and control the operations of the employees at the click of a button. It can potentially create a sense of fear in the minds of the employees.  

Performance Fear – Technology enables shifting to individual wise performance review. It can help in identifying good performers in the team. It will bring about a sense of uncertainty in the minds of the employees.

Tracking Fear – Site engineers tracked on their whereabouts, are generally wary about using the software. It is uncommon for them to come up with reasons not to use the technology to avoid getting tracked.

Resistance at Firm level

Firstly, every valuation firm is unique in its way. Firms have devised processes and procedures based on their needs and experiences.  

Secondly, India is a vast country with a multitude of variations between one state to another and some cases city to city within a state. The variance is very evident from the differences in the format of the reports used within institutions in various geographies and between the institutions.   

Unless exclusively built, SAAS products are standardized. 

Softwares are built based on generally accepted practices and processes, which is mostly adopted by the majority of players in the Valuation industry. This standardization may, at times, result in deviation from existing processes followed by few Valuation firms and hence resulting in resistance. 


Technology will transform all our lives and businesses. 

It will not be inappropriate to even consider software as a partner in growth. Especially with the Corona impact, the need for technology has advanced itself by at least 5-7 years. We have proven instances of long-term advantages of success and also short-term resistance in adaptation. It is advisable to device a transformation plan depending on the current firm’s needs and accordingly chooses the solution layer.

By – Team Evalo