2007 Dynamic Dozen Honoree: Jack Henry & Associates Inc.

Jack Henry & Associates Inc. has come a long way from “two guys tinkering on a borrowed computer” in Monett, as the company’s beginning is described on its Web site.

The banking software supplier, started by John “Jack” Henry and Jerry Hall in 1976 in a small office behind an auto repair shop, now employs more than 3,500, including more than 1,300 in its headquarters in Monett and offices in Springfield.

Ancillary offerings

The company’s products include a wide variety of banking software solutions – variety enhanced by 15 acquisitions in the last three years.

The goal, according to CEO Jack Prim, is to offer more options that don’t require a completely new core software system and to create new relationships in the steadily consolidating banking industry.

“These systems give us … a chance to get in the door with a smaller, easier-to-implement product, because we know that once we establish a relationship, they’ll come back for additional products,” Prim said.

Those products beyond Jack Henry’s core system made up about $50 million of the company’s $592 million in 2006 revenues. Prim noted that the 25 percent annual growth in sales of complementary services outpaces Jack Henry’s expected 2007 growth rate of 10 percent to 14 percent companywide.

Since 2004, Jack Henry has posted 27 percent revenue growth, with 2006 revenues of $592 million.

Acquisitions as a method of growth, however, are nothing new to Jack Henry, which has been publicly traded on the Nasdaq since 1985.

The company’s 2000 purchase of San Diego-based Symitar marked Jack Henry’s first foray into the credit union market. Community Financial Credit Union has been using Episys, a core data processing system created by Symitar, since 1998.

“(Since) Jack Henry purchased the Symitar system, we’ve seen a continuation of the same excellent service,” said CFCU President and CEO Cathy Stroud.

CEO Prim is the product of another acquisition; he joined Jack Henry in 1995 after the company purchased Liberty, where he was an executive.

The Liberty purchase added outsourcing to Jack Henry’s array of services, and officials continue to seek ways to add more.

That expansion of services, according to CFCU CEO Stroud, adds another level of value.

“What they have done,” she said, “is brought new potential business partners to enhance our current (core data processing) system.”

Technological complexity

Because of all of the new software and technology available, banking is among the industries in which technological complexity continues to increase.

It’s an issue that Prim said is a mixed blessing.

“There is affordable technology that allows the smaller banks to compete with Bank of America,” he said. “But the complexity of managing a lot of the technology out there is almost overwhelming, particularly when combined with the regulatory burden that is placed on these institutions.”

As a result, more banks and credit unions are approaching Jack Henry in search full-service software options.

“A lot of them are saying, ‘We love your software, but we want you to run it,’” Prim said.

Beyond technology, Prim said much of Jack Henry’s success can be attributed to old-fashioned good business practices.

“I think that a lot of it has been a very strong emphasis for 30 years on customer service,” he said.

“It’s about going above and beyond what customers normally see from companies providing the type of products that we provide.”

Information accurate at the time of the honor.