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Interviews
with Leading Business Leaders from our Sector
During Coley Clark's recent visit to the UK, Mark Edwards from Document Boss took the opportunity to spend some time with him to find out a little more about BancTec's CEO. Q: Perhaps we can start with some background on yourself; I understand that you spent 33 years at EDS. A: Yes that's correct. I originally graduated from the University of Texas and spent three years as a US Army officer before I joined EDS in 1971. Q: What was your role and responsibility at EDS? A: I retired from EDS as Senior Vice President and head of the Financial and Transportation Industry Groups in early 2004, a $3-billion business supporting more than 1,000 banking clients worldwide and 10,000 professionals. I stayed retired for just five months before taking on the role of CEO at BancTec. I currently also serve on the board of FundsXpress Inc., a software provider and consulting company serving the Financial Industry and of Carreker Corp, an electronic banking services provider. Q: What attracted you out of retirement to join BancTec? A: BancTec was a company that I was already involved with as a board member. They have a strong focus in the Finance sector which was one of my main areas of experience. I consequently had a reasonable understanding of the background of the company and its opportunities and challenges. Q: What were your first actions on joining BancTec? A: When I first joined I had 22 direct reports. I consolidated the team into three operation and three support groups led by six experienced industry executives. We also decided to set-up a "Think Tank" of experienced executives from the company to work on our Strategic Framework. There was a lot of hard work involved in establishing our Strategic Intent, Direction and to agree on our three-year Action Programme. Q: Perhaps you could give a brief history and introduction to your company? A: BancTec has been established over 30 years in both USA and Europe. The company was originally founded to address the cheque and payments processing sector through the supply of cheque mending equipment and consumables. From these beginnings the Corporation grew into a Systems Integrator, specializing in Document Content Processing and, in recent years, has developed a Business Process Outsourcing business. Globally BancTec has revenues of approximately $350M. Today BancTec is represented in over 50 countries worldwide and employs around 3000 staff. Q: Which markets are you more firmly present in at this stage? A: BancTec remains a strong global player in the Payment Processing sector. In recent years, we have experienced significant growth in the Document Content Processing arena, both in project delivery and BPO, which reflects the focus of investment for the Corporation. Finally, the Infrastructure, Technology and Service Management (ITSM) market remains a major market for the Corporation building upon BancTec's capabilities in maintenance services and software support. Q: Where do you have the greatest presence? A: I think it would be fair to say that we are still best known in the Financial Services Market, however, the growth of our Document Content Processing business has finally established BancTec in the Government and Utilities sectors. This can be demonstrated by our UK operation being selected as part of the UK Government procurement initiative - Catalist. We were selected from 1,700 companies. Q: Can you discuss some of the types of opportunities available to you? A: Since my appointment we have spent a lot of time listening to the needs of our customers. They are telling us that they like the type of solutions BancTec can deliver and that we are a good company to work with. However, our customers' business is changing and they need more flexibility in how they access our solutions. Hence, as well as continuing to invest in our core solutions, we have developed our BPO business. This is an opportunity for BancTec with our large installed base and market leading solutions. We have an opportunity to change the nature of our relationship with our customers from solution provider to business partner. This will create tremendous value for our customers and BancTec. Q: Where exactly are you positioned at the moment? A: First of all we are very focused
both in terms of the solutions and services we offer in the sectors
we address. BancTec will continue to build upon its core solution strengths
in Image, Capture, Workflow, Storage and Production Class Delivery.
However, we are adding more value to the solutions we deliver. Q: Apart from Financial and Government, which other sectors are you working with? A: Our background in Payments established
a strong base of customers in the Utility and Telco markets. The increased
emphasis on Customer Service in these markets has led to a growing number
of sales in the Document Content Processing area. Q: Is your sector or area showing good growth dynamics? A: Although the paper payments market worldwide is in decline, the actual opportunity for BancTec has grown as many of our long term clients migrate to an outsourced model. In 2006, we have seen a significant upturn in our BPO business from the payment market and we are confidently forecasting this growth to continue into 2007. The Document Content Processing markets continue to expand both in terms of traditional project deliveries and BPO services. Q: In a wider sense, can you talk about the drivers that are at play and then relate them to your company to give us a sense of how you've been able to tap into these drivers? A: In all our markets there are 4 key trends that are occurring within our customers that are contributing to BancTec's growth: 1) the demand for improvements in Customer Service Propositions The first 3 points are generating sizeable investments in process automation management and control. Customers want robust, secure solutions that address their business needs today. They do not want to wait for a ground-up build that has the potential to overrun in both time and budget. This really plays to BancTec's strengths and our investment in building vertical solutions is helping ensure we can continue to grow our revenue over the years ahead. The final point is really about how BancTec delivers business value. Our BPO business offers our customers another choice in how they can access BancTec solutions and services. This is particularly attractive to customers who need to make a major investment in a part of their business they now consider 'non-core'. BancTec is able to use its solutions and industry process knowledge to invest on the client's behalf. For example, in 2005 one of our customers wanted to enter a new country where it had no presence. BancTec sourced a facility, built the processing infrastructure, recruited staff and now operates this processing centre on behalf of our customer. BancTec funded the investment and is able to provide transaction based pricing back to the customer. Q: How would you characterize the current environment? A: The pace of change continues to accelerate. This will create both opportunities and threats to all suppliers and customers. We must continue to listen carefully to our customers and be prepared to modify our offerings and methods of delivery to reflect the changing requirements we face. Standing still is certainly not an option! Q: How would you like to see your business develop over the coming 12 or 18 months? Are there any key initiatives or targets that you are gearing up for? A: I want to see BancTec's BPO business continue to grow. This will not only deliver revenue growth but it will further increase the percentage of recurring business. We accept that certain parts of our payments business will decline in line with falling paper volumes, but I am confident that a combination of growth in the Document Content Processing business and the uptake in the BPO business will allow BancTec to accelerate its growth. Q: Are those objectives likely to be achieved through organic growth or do you have an ear to the ground for acquisition opportunities as well? A: Organic growth is important as it reflects a well run company, able to execute on its strategy. However, as we have shown in the past year, we are prepared to make acquisitions in order to accelerate growth. Q: How much of your revenue comes from maintenance and services? A: Around 65% of BancTec's revenue is recurring. This includes maintenance, consumables and BPO services. Q: So will there be consolidation on the horizon? A: In the payments business we will continue to see consolidation in both customers and suppliers and we expect this to continue over the next couple of years. The Document Content Processing sector has consolidated considerably over the past few years, as companies move from being component product providers to solution providers. Again, I expect that we will continue to see the number of product companies decline. Q: Can you give us a quick sense of your financial strengths and firepower to move ahead as you would want to? A: We are very fortunate to have such a supportive owner in WCAS. Not only do they have the financial resources to allow BancTec to execute its strategy they have extensive knowledge and expertise that we can draw upon in transforming BancTec into a services led organisation. Q: Has it been a challenge for management to maintain the focus as you've grown and is the team there now to make sure you can execute your objectives going forward? A: We have a great management team - one that is focused on growth and transformation. We have a good blend of senior executives, who have worked outside of BancTec, alongside people who have been in the company many years. I think this will ensure we maintain BancTec's traditional values while we continue to transform and grow the company. Q: What is going to be the main challenge for you to navigate? A: Growth always creates new challenges. Finding and securing the right people always helps. However, we also need to be able to react quickly. We have an initiative in BancTec called 'pick up the pace', it's my job to lead that initiative and make sure BancTec is ready and able to change in order to keep delivering value to our customers. Q: What are the three or four best reasons for investors / customers (as appropriate) to look towards your company? A: From an investor's view point 1. Strength of Management Team However, from a customer's point of view 1. Long term commitment to the market I would like to thank Coley Clark for the time he spent with me in what proved to be a very enjoyable interview. I would also like to thank Mike Peplow for arranging the meeting. I wish BancTec the very best in their future business endeavors.
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