Level the playing field. (Executive Essay).

I REMEMBER PLAYING A GAME AS A CHILD with some of the neighborhood kids, in which we would put a flashlight on the ground and stand near a wall a few feet away to create a giant shadow image of ourselves.

It made us look more menacing and worked especially well at night when we wanted to scare someone. (A camping variation done inside a tent produced particularly amusing results.)

Thinking back, I realize that this was part of a common childhood desire to be bigger and more powerful than we are.

I realize, too, that this longing does not necessarily vanish when we become adults--and that could be a good thing. For instance, in the business world, it helps a small company attempting to compete with a larger one.

If technology has taught us anything, it is that size does not always matter. A small mortgage lender, for example, can operate outside its traditional, local "footprint" and expand its reach. Using modest resources, it can produce results every bit as impressive as companies with many more people and much more money and resources.

Consider Washtenaw Mortgage, Ann Arbor, Michigan, which works with 1,500 brokers in 42 states and originated more than $3 billion in loans in 2001. Washtenaw uses GHR Systems Inc.'s online submission solution to let its brokers upload files directly into the company's mortgage application, thus saving time that would otherwise be spent on data entry and the processing of paper.

Chuck Huffman, president of Washtenaw, says because the application comes in directly from the broker, data entry is eliminated, and it is far faster to get the loan through Fannie Mae's Desktop Underwriter [R] engine. "We can spend our time working on loan files instead of running data through underwriting," he says.

Washtenaw will add even more productivity later this year with technology enabling its brokers to interact with the loan origination system, making changes directly in the applications. "That used to be a big process hog for us, producing delays for brokers," Huffman says. Brokers will be able to type in loan file changes, refresh documents and then see if the loan will still be made.

For other lenders, increased output may be achieved from more quality control and customer service, delivered by technology that enables them to outperform much larger competitors.

At Cardinal Financial Company, Trevose, Pennsylvania (outside Philadelphia), $700 million in loans will be closed this year by the company (including retail production). Cardinal works with only 175 brokers in 14 states--mostly on the East Coast. Bob Angelucci, Cardinal's president and chief executive officer, expects efficiency levels to increase even further now that the company is implementing a system that allows brokers to lock and register loans online and get program information from Cardinal's system.

"Our cost per loan will be reduced on our existing channel of business, and that will allow us to expand our volume with minimal costs," Angelucci says. Brokers can complete the entire 1003 application online and will be notified before submission if there are any items in the application that are missing or appear incorrect.

Brokers can quickly determine which loan products match their borrowers' qualifications, view broker-specific risk-adjusted pricing, and see transaction-specific closing costs and lender/investor stipulations. It means that brokers can indicate online if they want to lock or float a loan.

In sum, small and midsized lenders can cross the digital divide and reap the profit on the other side, but it takes technology--and technology that is not all that costly. For regional lenders like Washtenaw and Cardinal, technology means fast, accurate execution and more revenue for both brokers and lenders. It also means, says Huffman, that "by adding an online submission capability, we can do just about anything the big guys can." Sort of like that old flashlight game.

Greg Phillips is senior vice president of product management for GHR Systems Inc., Wayne, Pennsylvania.