Less than a week ago, initial information became public that Misys and Temenos may intend to merge. On February 7, 2012, a press release stated that “Temenos and Misys today confirm that they have reached agreement in principle on certain key terms and are in continuing discussions regarding a possible all share merger of the two groups.“ Now Misys and Temenos have about one month to finalize their merger — or abandon it. It is obvious that this merger has the ingredients to become one of the most significant mergers in the banking industry in the past few years. With the probability of the merger now sufficiently high, here is my initial take.
There are two obvious reasons for this potential endeavor of Temenos and Misys (let’s call the combined company MIsys-TemeNOS [“MiNos”] for the time being to avoid terms such as “new company” or “NewCo”):
A broader and deeper product portfolio for banking and capital markets. While Temenos has been a Global Power Seller in Forrester’s global banking platform deals survey for years, Temenos has so far struggled to win a large number of major banks as customers for its banking platform. The combined portfolio could make “MiNos” more attractive for larger as well as smaller potential customers — with an even broader set of point solutions as well as integrated apps offerings such as banking platforms.
A few days ago at Oracle OpenWorld 2011, I attended a presentation from one of the major consulting companies. The topic: banking in 2020. I heard about big data, the need for real-time analysis of information (in particular from the Internet), and a few other trends. While many of these trends were not new, I could only agree that they would be important in the future, as they align with Forrester’s 2008 research on what banking will look like in the future. (If you are interested in details regarding Forrester’s research on this topic, please see “Financial Services Of The Future: Collaborative Competition Will Be The Norm” and “Banking IT In 2023 Updated,” keeping in mind that 2023 is a metaphor for a longer-term perspective.) However, there was one statement within the presentation that I seriously disagree with.
For the past couple of months, we have been working on identifying best practices for application development and delivery teams executing on multichannel strategy. The related report will get published soon. We found that application development and delivery teams need to be successful in the magic triangle of delivering a multichannel solution: 1) tactically; 2) in a strategic way; and 3) fast.
Just recently, I had an interesting customer experience — or, to be more precise, my daughter had it, as it involved her laptop computer from one of the top international Internet PC vendors. It was only a little defect — more an annoyance than a real fault. Since we bought “next business day service,” it should have gotten fixed right away. It played out differently in real life.
In 2006, Forrester found that organizational structure, internal enterprise goal systems, and most urgent business requirements were key obstacles on many firms’ journey toward broad multichannel solutions with rich cross-channel capabilities. At that time, a few advanced firms tried to establish a multichannel organization, an organizational layer to coordinate multichannel requirements and solutions between the different business groups and the IT organization. Has this changed over the past five years?
Forrester began surveying global banking platform deals in 2005. For 2010, we evaluated about 1,200 banking platform deals submitted by 23 vendors and located in more than 130 countries. Shortly, we will publish the final results of this evaluation. Today, I want to offer some initial trends:
Cosmopolitan magazine certainly doesn't publish articles such as "Seven Hairstyles That Will Make Your Man Yawn." Wildly desirable is more like it. And so too, is it with great software. If you want your applications to be successful, you better make them wildly desirable.
My latest published research has identified seven key qualities that all applications must exhibit to be wildly desirable, with our choices based on research and inquiries on software design and architecture; assessment advisories with clients; and interviews with leading experts, including both practitioners and academics.
Forrester defines the seven qualities of software as:
The common requirements that all software applications must satisfy to be successful: user experience, availability, performance, scalability, adaptability, security, and economy.
All seven qualities are important, but if you get the user experience (UX) wrong, nothing else matters.
The UX is the part of your application that your employees and/or customers see and use daily. You can do an exceptional job on project management, requirements gathering, data management, testing, and coding, but if the user experience is poor, your results still be mediocre — or even a complete failure.
Similar to the past few years at this time of year, we have received a number of global banking platform vendors’ 2010 banking platform deals submissions. While evaluation and analysis will still take some time, a first look at the survey responses shows three interesting aspects:
The number of survey participants increased. The 2010 survey has more participants than in prior years. A number of more-regional players such BML Istisharat, Cobiscorp, Intracom, and SAB participated for the first time, while CSC and InfrasoftTech rejoined after some years of absence.
Some vendors preferred not to participate. Open Solutions decided not to participate anymore after a few years of participation. And, similar to the past, Accenture, Fiserv, Jack Henry, all invited Russian players, as well as a few others chose to not participate for various reasons.
Success is regaining momentum. A few vendors have been able to retain their 2009 success, while a few others submitted remarkably high numbers as far as new named deals and extended business are concerned.
We still have to see what the detailed deal evaluations will show. However, right now it seems that the banking platform market has at least regained some of the momentum it lost in 2008 and 2009. As always, let me know your thoughts. JHoppermann@Forrester.com.
For some time there have been rumors about Deutsche Banking having selected TCS BaNCS for some or all of its international subsidiaries. Today, both Deutsche Bankand Tata Consultancy Services (TCS)published a press release announcing that Deutsche Bank will implement TCS BaNCS Core Banking as its new core banking platform for Global Transaction Banking (GTB). The first international subsidiary, which is located in Abu Dhabi, went live three days ago. I discussed the deal with N. Ganapathy Subramaniam (NGS), the president of TCS Financial Solutions.
Our Q3 2010 Global Financial Services Architecture Online Survey shows that 79% of the surveyed financial services firms are either already working on transforming their application landscape or plan to start this effort by 2012 at the latest. The need for greater business agility and flexibility, new business capabilities, and improved ability to cope with changing markets, offer more differentiation, and increase market share are key drivers for a large share of these financial services firms.
Coping with these drivers requires a large amount of architectural flexibility; therefore, architectural flexibility needs to be an integral element of any decision in favor of or against a given architecture or off-the-shelf banking platform within a transformation initiative. Consequently, it does not come as a surprise that 43% of the surveyed firms expect that more than one-third of their business applications will leverage service-oriented architecture and use business services in the next 18 to 24 months and an additional 19% think that more than half of their applications will utilize business services within that time frame.