BancTec Acquired by HandsOn3

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Acquisition Helps Broaden BancTec’s Focus

Earlier this year when the investment firm HandsOn3 (HGM) acquired BancTec, it was more than just an equity investment. There was also a strategic element, as the BPO firm Dataforce Group was combined with BancTec “to create one of the largest pure-play BPO businesses addressing the transaction processing, workflow, and document management markets.”  Also, in the wake of the acquisition, Mark Fairchild, a long-time BancTec executive and most recently CTO, has been appointed president of the organization.

DIR recently caught up with Fairchild who gave us his view on how the acquisition is affecting the organization. “Our management structure has changed,” he told DIR. “We have a new board, Jim Reynolds (COO and CFO at HGM) is now the CEO and Coley Clark (former Chairman and CEO) is now a non-executive co-chair.”

Maria Allen remains the EVP of the Americas and reports to Fairchild, as do the general managers of BancTec’s European regions. Fairchild has also maintained his CTO role, albeit consolidating his reports to the heads of each a hardware and software group. And Fairchild stressed that, despite the language used in the press release, BancTec’s products business is not going away.

“BancTec is a multi-faceted business,” he said. “It’s not easy to put together a brief description of it, and the goal of a press release is to keep things crisp and clear. Hardware and software are still a key part of what we do. We run our own IP (intellectual property) in our BPO centers, and we will continue to offer our technology on a worldwide basis, both directly and through our channel partners.

“Hardware and software and the associated maintenance revenue are still a significant part of our business and will remain so going forward. That said, for growth, we are primarily looking at the BPO space.”

Combined with Dataforce, Fairchild said BancTec is approximately a $300M a year organization. “The bulk of what Dataforce does is call center-based,” he said. “It’s really customer interaction management and involves Dataforce serving as the ‘voice of the client.’

“Dataforce’s customers include large telcos, healthcare organizations, charities, educational institutions, and sports and leisure companies. They offer a number of services in areas like A/R management/collections, insurance claims management, and really anything involving interaction with customers.

“This gives BancTec quite a strong set of capabilities that it never had before. We had a small set of call center capabilities but nothing of this magnitude. Likewise, Dataforce was doing a bit of scanning in the U.K, but it was minimal compared to our volumes. Both companies have great client bases, so we are looking forward to the opportunity to cross-sell.”

The majority of Dataforce’s business is in the U.S. “Dataforce also has sizeable operations in Costa Rica and India that we plan to leverage in our transaction processing service operations to become increasingly competitive and improve our margins,” Fairchild said.

Banctec’s combination with a call center organization would seem to fit well with the industry trend toward introducing BPM/case management software into customer experience management (CEM) operations [see guest article by John Mancini on page 4]. “Although Dataforce is primarily dealing with voice interaction, it does work with other communication avenues, such as e-mail,” said Fairchild. “It’s going to be a big asset, having an organization that understands how to handle customer interactions, whether that is through voice or other types of media.”

Diverse offering; strong markets
In regards to BancTec’s legacy business, it sounds like operations will continue mostly as usual. “Headquarters will remain in Dallas, and ultimately, everything will be branded under BancTec,” said Fairchild. “The BPO business is our primary growth engine. Going forward, we will put our emphasis on automating and managing business processes.

“When you look at the markets where we have the largest share: financial services, healthcare, telco, government, and insurance—the range of services we offer is pretty broad. In addition, we can deliver those services in a variety of ways. This includes completely outsourced services, on-premise hardware and software, or a combination that includes a hosted application being licensed by our customers. And our customers have the flexibility to migrate from one method of delivery to another.

“We will continue to go to market both directly and with partners. One partner we signed recently is BirchStreet Systems, which offers hosted financial and accounting software mainly to the hotel and resort industry. They have introduced our invoice processing services as part of their offering. We do all the scanning and data capture, and their customers can then access their invoice images and data through the BirchStreet application.

“Our partners can bring our offerings to market in a variety of ways. There are regions of the world like Japan and South Korea, where we sell a lot of hardware, which we couldn’t reach without partners.”

Fairchild concluded that the market opportunity for BancTec remains strong. “There are obviously some challenges with our traditional business around check clearing,” he said. “That revenue stream is in decline, but that problem was well anticipated, and we have planned for it.

“Our opportunities, especially with the addition of customer interaction capabilities, are very large, and our market is growing. We think we have a great package of offerings, a great way to take them to market and a variety of ways to deliver them. These are exciting times for us.”

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