g
equity investor in the IT and telecoms sector, Warburg Pincus. Dubois’ appointment, said Andreades, was a reflection of the growth of Temenos in the previous year or so (both organically and via acquisitions of Odyssey, Viveo and FE-Mobile) and the need for a CEO experienced in ‘much bigger operations’. Dubois continued to back the componentisation of T24 and the partner strategy; he also spoke of further acquisitions of complementary applications. On the component front, as is Temenos’ way, it has aggressively pursued this, releasing a sequence of components and enablers for these, although as usual, some of the pioneers with these have not had smooth implementations (Hypo Alpe Adria Bank in Central Europe and Laiki Bank in Cyprus, for instance, had challenges with a new component called the Arrangement Architecture, which allows banks to develop new product components, such as interest rates and eligibility rules). Temenos has also put in a lot of work to support three main technology stacks from Oracle, IBM and Microsoft, culminating in the announcement at the 2012 user group meeting that it would discontinue (but still support) its own jBase database (which came as something of a shock to those banks that had recently implemented or were mid-project with the jBase version of T24). T-Risk was also sunsetted in favour of a risk solution built on the Insight product, as
Islamic importance
However, Islamic banking continued to serve the vendor well in 2011. Although the total number of Islamic signings fell to four from seven in 2010, Temenos gained the stand out deal of the year. This came from Samba Financial Group, one of the largest banks in Saudi Arabia, with a project estimated to be worth over $100 million. Work at Samba started in September and the project was to be carried out in phases over five years, with the system to cover all the main operations of the institution. Another Islamic win in 2011 came from Bank Artha Graha in Indonesia. All of this came against a backdrop of more corporate upheaval. Dubois’ time at the helm turned out to be just one year, as he stepped down for ‘personal reasons’ in July 2012. During his tenure, there had been a shortlived proposed merger with Misys that fell through. The all-share deal would have seen Temenos shareholders as marginally the minority in the combined entity and there would have been major questions about the coming together of these two core banking powerhouses but it did not come to pass, as Misys (but notably, it seemed, not Temenos) subsequently attracted the interests of
was ARC Internet Banking, which had sold relatively well but was edged out in favour of a partnership route with a company called Edge IPK. The latter’s offering was taken by Metro Bank in London, in favour of ARC. Edge IPK was subsequently acquired by Temenos, combined with the ARC offerings and rebranded as Temenos Connect. Also on the product side, Temenos set to work with existing T24
user, ABN Amro, to develop a payments hub. The bank used T24 in multiple sites for corporate banking (300 users by mid-2012, from two hubs) and wanted to add support for high-value and low-value payments. The first phase, set for Q4 2012, would be for credit transfers. While SEPA and direct debits were not part of ABN Amro’s requirements, support for these was also expected to be added to the hub in later phases.
New name sales slumped steeply in 2011, to 27 (one behind Oracle FSS) and there was a sequence of poor financial quarters. Q2 2011 losses of $21.8 million included considerable restructuring costs, relating to the acquisitions of Viveo and Odyssey, other charges as a result of cost-cutting and an accounts receivable write-off of $27.6 million from projects where Temenos had been ‘incurring significant costs and reputational effect which have been negatively impacting future sales’.
venture capital companies with cash offers, culminating in its sale to Vista Equity Partners. This only increased speculation about a sale of Temenos. Following the departure of Dubois, the old guard took up the reins once more, with Arnott becoming CEO. The change coincided with the release of preliminary revenue projections and downward revision of its outlook for the year. Temenos’ share price dropped 20 per cent on opening and continued to fall during the day. Arnott subsequently embarked on a cost-cutting exercise worth $20 million. This resulted in widespread redundancies, relocation of work to cheaper offshore locations, restructuring and management changes. In late 2012, in a conversation with IBS, Arnott emphasised that no changes were made to Temenos’ corporate strategy. ‘We are simply focusing on its better execution,’ he stated. This involved ‘tweaking the details’, mostly on the execution side, ‘and these smallish changes have already had the most significant impact on the organisation’s enthusiasm, morale and productivity’. The organisation alignment was comprehensive, he claimed, and ‘the three-year plan is very clear in people’s minds’. He also pointed out that the vendor had reversed the trend of decline and that its share price was up 50 per cent. Temenos’ partnership strategy, with its emphasis around delivery
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