Temenos has had a tumultuous time of it in 2012. But a management shuffle has put a new CEO firmly in control and Temenos is hoping to re-gain lost ground and drive growth into 2013. Billy Bambrough spoke the CEO of seven months David Arnott.
Swiss IT vendor Temenos made it through 2012 with a far better than expected set of results thanks to a last minute fourth quarter surge. This wasn’t just a flash in the pan return to growth however, says Temenos CEO David Arnott.
Go deeper with GlobalData
Temenos is going to back to basics after a July 2012 management shake up in which Guy Dubois stepped down as CEO after just a year in the job and Arnott took over the reigns.
"Temenos was built on the foundations of selling the same software over and over again", Arnott told RBI. "It’s the kind of business model that creates companies like Microsoft, SAP and Oracle."
"This is what we are going back to," Arnott explains. "The question isn’t how do we replicate Q4 into 2013 but, how do we go back to what we know to have been successful since 1993 when we founded the company right up until the middle of 2011?
"We are just going to continue to do what we were doing well for nearly two decades."
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData"Europe resisting IT overhaul"
Arnott, who was CFO at Temenos for 11 years before taking up the mantel of CEO, has seen the company grow from a few hundred employees to nearly 4,000.
The executive team is still going through changes at Temenos as Mark Cullinane who severed as COO left the company in February but Arnott maintains this won’t trigger another reshuffle at the top.
Arnott says: "Not one of the top ten software companies has a COO; it doesn’t work structurally. My desire to get closer to the front line made that role obsolete."
The emerging markets are a key area for Temenos in 2013, with Arnott forecasting much of the companies business will be coming from Latin America and especially Asia in the short term.
Europe, on the other hand, seems to be resisting the kind of IT overhaul Temenos want to give it.
"There is a lot of pent up demand in Europe", says Arnott, "However banks in Europe will find any excuse to avoid ripping out their software. It’s by far the biggest market and the most resistant to change."
This is an attitude that Arnott says will have to change if traditional banks want to stay ahead of the new players. "I was with one of the big banks in London and they said to me, ‘we know how to compete with Lloyds, we have no idea how to compete with internet banks’."
Even the more traditional new entrants to the market are causing problems with Arnott branding London headquartered Metro Bank as a "disruptor".
New players coming into the market isn’t the only thing that’s going to shake it up according to Arnott.
"Metro Bank is a disruptor"
Banks are some of the few companies remaining who write their own code and that will have to change.
"We’ll look back in 10 years and everyone will say, ‘wasn’t it just so obvious that this was going to change?’."
But this won’t just happen, warns Arnott. Temenos, he says, can’t do it alone. The big players, SAP, Oracle, are going to have to come in and drive the change.
"The only way to win in this space is to invest heavily. Customer wins is something we are going to be working on. Instead of using 90 sales people you’ve got 300 or 400 hundred and that’s game changing."
