Company Profile: Harland Financial Services

By Kate McPherron

Introduction

The John H. Harland Company has been in business since 1923, serving financial institutions of all types and sizes. For most of its history, Harland was most well-known as a provider of checks and other printed products. In late 2000, Harland acquired Portland-based Concentrex, Inc. – formerly known as CFI Proservices, a leading provider of software and services to financial institutions. That acquisition, combined with John H. Harland's existing software businesses, became Harland Financial Solutions, Inc. – a wholly owned subsidiary of the John H. Harland Company.

With the strong position it gained from the Concentrex acquisition, Harland Financial Solutions aggressively pursued acquisitions that enhanced its position in the financial software market, particularly in the areas of Bank Core Systems and Mortgage Lending. In 2002, Harland Financial Solutions entered the Bank Core Systems market with its acquisition of SPARAK Financial Systems and expanded its reach into the mortgage software market with (Seattle-based) INTERLINQ Software Corporation – a leading provider of mortgage loan origination and servicing platforms. Since then, Harland Financial Solutions has acquired many companies in Bank Core Systems – including Premier Systems, Mitek Systems and Fair Isaac Corporation's Core System Business Unit, anchored by the Phoenix System. The company also expanded its electronic mortgage business with the acquisition of Greatland Corporation’s mortgage document business unit. Other acquisitions include Intrieve and Financialware.

Harland Financial Solutions maintains the same Portland offices occupied by Concentrex, and many of the same people. With 231 employees, it is among the largest software companies in Oregon.

Two of Harland Financial Solutions’ executives were tapped for this profile:

J.R. Clemons
Executive Vice President, General Manager, Lending Solutions
Clemons has overall responsibility for Lending product development and operations. With experience in product development, sales, legal and intellectual property issues, as well as software operations, Clemons has worked in both the national and international arenas for publicly traded and privately held companies. He has more than 20 years of experience in working with financial institutions of all sizes. Clemons earned a Bachelor of Arts in Economics from Washington State University and his Juris Doctorate from Gonzaga University. He is a member of the American Bar Association and the Washington State Bar.

Scott Hansen
Vice President, Business Development & Strategic Marketing
Hansen’s business development and marketing responsibilities revolve around demonstrating and promoting the value of the Harland Financial Solutions family of products and services. Prior to this, Scott Hansen spent 13 years focused on Harland's Decision Support product line, which includes the Touché^® Analyzer^™ (formerly Max$ell) system. Hansen started his career in the financial industry at a $2 billion savings institution, where he was one of the earliest users of the Touché Analyzer system.

How pivotal was the acquisition of Concentrex (CFI) and how did it change Harland?

SH: The John H. Harland Company acquired Concentrex in August of 2000, forming the foundation of the Harland Financial Solutions division. Prior to then, Harland was still known primarily as a check printer, even though it had made several small acquisitions of financial technology providers in the mid 1990s. The Concentrex acquisition marked the beginning of an aggressive acquisition strategy designed to diversify Harland’s sources of revenue, and leverage its nationwide sales and distribution infrastructure serving thousands of financial institutions. In 2001, Harland Financial Solution’s revenue was $118.9 million. It grew to $256.7 million in 2005.

In the relatively conservative world of banking, Harland Financial Solutions was among the very first vendors to start growing through acquisition, and was at the forefront of the industry trend of acquisitions.

For the sake of our Oregon audience, could you give a little background on where Concentrex (CFI) came from?

JRC: CFI started by addressing the problem of managing forms that were going out of date and had version control. Banks used to have rooms full of these preprinted forms. Along came HP with the Laser Printer, and CFI understood that they could take their legal expertise and blend it with the new technology to eliminate those rooms full of forms and the obligation to check the date stamp. So, the primary motivator behind the development of CFI’s Laser Pro^® product was the evolution of laser printers, more than any banking regulation. This was a big shift.

In the early days of our sales presentations, we’d bring in a Laser Printer on a cart and the customer was probably as delighted by the printer as they were by the software. It was a symbiotic relationship: one technology opened the door for another.

The company grew, as software that started out running on stand-alone PCs and drove laser printers became networked. Then one state became 50 states. Each change enlarged the market. Smaller banks had lending systems on PCs, bigger banks wanted to use LANs and WANs to print documents. Ultimately, printing became less important than the technology that drove the software that drove the printer, and so by the time Harland Financial Solutions came around, everything was more focused on the intellectual content.

What did Harland see in Concentrex?

SH: Strategically, Concentrex was an excellent fit on several fronts. First, the target market served by Concentrex was perfectly aligned with that served by Harland – banks, savings institutions, credit unions and mortgage companies. Second, the product mix offered by Concentrex was 100% complimentary to Harland’s product line, providing excellent cross-selling opportunities to Harland’s existing clients. Third, many of the Concentrex products were the leaders in their respective categories. For example, the Laser Pro system was – and continues to be – the number-one compliant loan documentation system in the industry, used by thousands of financial institutions across the country. Fourth, Concentrex had amassed a sizable client base all across the country, allowing Harland to significantly expand its overall market presence. And finally, Concentrex had a very skilled and tenured employee base, with an extremely strong management pool. This was critical to Harland, as the company was just forming its Harland Financial Solutions technology division. In fact, many members of the original Concentrex management team now serve in senior-level positions for the company as a whole.

JRC: In exchange for the technology, Harland brought to Concentrex tremendous financial stability, plus 80 years’ history selling to banks and great respect in the market. Even though Concentrex had a strong niche in loan preparation, we benefited from that stability and credibility.

In terms of market niches, Concentrex had already started to expand in the areas for credit union core systems, branch automation and mortgage lending. After the acquisition, we separated those groups out and continued to expand upon them to include all the solutions we offer today within each area.

How has Harland changed since 2000?

SH: The products and businesses that originally made up Concentrex are now fully integrated into Harland Financial Solutions, forming the foundation of our overall growth strategy. All major product lines have continued to expand and grow since the acquisition. Equally important, however, is the development of new products and services taking place in the Portland office. Examples include cutting-edge, fully automated commercial lending technology called CreditQuest^™, and state-of-the-art electronic signature technology allowing remote execution of loan documents.

The depth and breadth of the Concentrex staff has clearly benefited Harland Financial Solutions, allowing us to draw from that pool as required to strengthen and build the division as a whole. One good example of that is Dan Larlee, the original Chief Technology Officer from Concentrex. Dan now serves as Harland Financial Solutions’ Chief Technology Officer, driving the whole organization’s technology strategy. Another example is Rusty Beckel, Harland Financial Solutions’ Vice President of Strategic Initiatives. Rusty has over 20 years of tenure at Concentrex and now Harland, with her contributions dating back to the earliest days of CFI.

Harland Financial Solutions today has over 1,400 employees, exclusively serving the financial institution market, in 19 locations throughout the United States. The four primary offices consist of the following groups:

• Core systems group (for banks, credit unions and thrifts) – based in Lake Mary, FL
• Lending group (consumer and commercial) – based in Portland, OR
• Mortgage group (origination and servicing) – based in Bothell, WA
• Retail group (branch automation, business intelligence, consulting) – based in Lake Mary, FL

The company is a leader in core systems, item processing, payment processing, enterprise content management, financial accounting systems, electronic documents, deposit and loan origination, customer relationship management, compliance training, branch automation, check and MICR printing, mortgage lending, and solution consulting. We serve the financial institution market with a combination of in-house software, and outsourced services bureau offerings.

How did Concentrex affect the culture at Harland and vice cersa?

SH: The culture of a prospective acquisition candidate is an important part of the due diligence exercised by Harland prior to each and every acquisition. And, while there are inevitably differences in style and culture from one company to the next, the culture of the Concentrex operation was a great fit with that of Harland’s. Both Concentrex and Harland employees shared a foundation of common beliefs and behaviors that have come to be known as the “Harland Pillars”. They include a dedication to Customer Focus, Competitive Advantage, Best People and Innovation, all founded on the core values of Respect, Leadership, Focus and Persistence.

The culture of Concentrex has clearly been a strong contributor to the success of Harland Financial Solutions in many ways, from the way we serve our clients, to the way we innovate, to our division policies. A good example of this is the Concentrex sabbatical policy. Concentrex believed in the value of offering a paid sabbatical to employees reaching a certain tenure level. This policy is now in place at Harland Financial Solutions, and applies to all employees reaching the set tenure level…not just those working in our Portland office.

What are the strengths and innovations coming from Harland Financial Solutions' Portland office?

SH: Our Portland office represents the headquarters of our Lending Group. This group is now involved in rolling out the latest in automated lending technology designed to significantly improve the efficiency of the lending process, while dramatically reducing the amount of time and effort it takes to originate a loan. This initiative has drawn on the many skills of our Portland team, including product management, development, training, marketing, as well as strategic alliance management. Our Portland team has a very distinct core competency in the area of lending and deposit account compliance. This continues to deliver a distinct competitive advantage to Harland.

Harland Financial Solutions will continue to provide an increasingly wide and deep array of products and services to our financial institution clients. We will accomplish this through disciplined internal development, acquisitions, and strategic partnerships. Our Portland group will play an important role in both defining and executing that strategy.

Why did Harland decide to keep the Harland Financial Solutions office in Portland?

SH: Harland Financial Solutions as a general rule retains the original facilities of the companies we acquire. The employees of a newly acquired business are clearly our most important asset, so we do everything we can to make sure they remain dedicated to their work and their clients. We believe that keeping an office facility intact goes a long way to helping us hit the ground running with a new acquisition. The former Concentrex facility in Portland continues to be the headquarters for our lending group, housing 231 employees, including several members of the Harland Financial Solutions division executive team.

Have Portland and Oregon served Harland Financial Solutions well?

JRC: The area has given us a good pool of highly educated workers. In fact, there’s so much demand these days that it’s really an “employee market.” Demand is so high, I understand from our HR VP, that it’s probably the first time we’ve had to struggle to find as many qualified candidates as we had in the past. Others may disagree, but I think it’s very good for our community as a whole to have people who are going to be in better-paying positions in technology. This will result in a large pool of highly skilled labor in this area.

SH: As an 83 year-old company with an extremely strong reputation and extremely strong financials, we can offer exceptionally competitive compensation and benefits; we also value diversity, and are routinely designated as “one of the best” in each of the communities we are located. When you couple all of this with the depth, breadth and availability of talent in the Portland area, we believe that we have been very successful at attracting the very best employees. We generally prefer to fill positions locally, but will recruit outside of the area when required.

Although historically recruiting has not been a problem for us, the last few years have been better than in the past. We attribute it to the increased number of technology companies that have moved to the area that makes for a more attractive job market. We have great success at recruiting locally and maximize our exposure through an internship program we’ve established with the University of Portland. We’ve had a relationship with the college, which has an exceptional computer science program, for many years. Originally, the internships were limited to technical areas within Harland, but we have since expanded the opportunities to include finance, marketing and other departments across the business.

About the author
Kate McPherron, a technology evangelist, has helped technology and industrial firms manage and market their products and services for the past 20 years. She can be reached at klm54@cornell.edu.