No.11, Jack Henry & Associates

Since 1976, Monett-based Jack Henry & Associates Inc. has undergone significant growth by continually changing its business strategy and allowing it to evolve.
Of late, the company has followed a bold acquisition strategy.
Jack Henry President Tony Wormington said that a bold acquisition strategy also contributes to Jack Henry’s growth.
“Since 2000, we have performed 19 acquisitions. This has expanded us into new markets and positioned us extremely well for future growth,” he said.
Of the company’s 19 latest acquisitions, 11 have taken place since February 2004.
The approximate value of those 11 acquisitions is $150 million, Wormington said.
The company announced yet another acquisition. Jack Henry is acquiring Winston-Salem, N.C.-based Tangent Analytics LLC, in a transaction for which terms were not disclosed. Tangent provides a fully-integrated Web-based business intelligence framework called BI Navigator.
“What our strategy over the last year and a half has been is a disciplinary diversification strategy. That will bring us additional complimentary or niche solutions that are selling either in financial institutions or in new markets like health care,” Wormington said. “We know technology and software solutions and that’s something we believe makes sense for us to expand on. We will continue in the near future to look at opportunities just as we have in the past.”
That strategy seems to be paying off for Jack Henry. The company’s revenues for fiscal year 2004 were $467 million, up 16 percent compared to fiscal year 2003 revenues of $404.6 million. The company reported 2,500 employees as of March 8.
Initially, Jack Henry’s strategy was to supply in-house core processing software for community banks.
“In the early 90s, we began to build, buy or partner for complementary products that would surround that core solution,” said Wormington.
The software that built the company was geared toward the basic functions of community banks – back-room software able to manage checking and savings accounts and handle customer transactions.
Complementary products go beyond those services and provide software for tellers or for Internet banking, for example.
“They are niche- or role-oriented products,” Wormington said.
Another important move for Jack Henry & Associates was venturing into
outsourcing. In 1995, an acquisition enabled Jack Henry’s move into outsourcing operations.
“Today we have six data centers located throughout the U.S.,” he said. “We run the same software we would sell to an in-house financial institution, but we process and run that software ourselves and provide it as a service to financial institutions.”
Jack Henry also has 20 item-imaging centers that capture transactions and transmit them to the data centers. Those centers have opened a new avenue of business for the company.
“If you look at the mix of financial institutions, there is a certain type of institution that wants to have their own system and their own in-house software, but there are others who want to be serviced. They don’t want to bring all of that technology in house; they don’t want to have all of that expertise. They want somebody to take care of it for them,” Wormington said.
In 2000 Jack Henry & Associates looked to credit unions as its next pursuit, with the addition of a product tailored specifically for those institutions.
As the company grows its customer base, it will likely grow its headquarters as well. Wormington said Jack Henry officials are in the discovery process for building a ninth building on the company’s Monett campus. In addition to its headquarters, Jack Henry has 43 offices coast-to-coast.
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