Hi there!

Despite the consolidation in the number of suppliers of practice management systems there are still numerous suppliers out there with a wide variety of systems. They each have a different focus on functionality, they each have different backgrounds and different pricing propositions. How can distributors choose between them?

The vendors do break down to a number of categories to ease choice though. There are a few mortgage specialists for example – lead by TrigoldCrystal and Mortgage Brain. Choosing a mortgage system isn’t however a two horse race as IntelliFlo, 1st -The Exchange and Plum all have revitalised mortgage propositions.

There are also those with clear focus on financial planning end of the market with specialist planning tools linked directly to backoffice systems. Prestwood and JCS would fit into this category. The mainstream providers 1st – The Exchange and IntelliFlo have increasingly strong offerings in this space as well though.

The tools are also divided into those that have come from a back-office background and those from a front office/POS background. 1st – The Exchange, Plum and IntelliFlo all have a very strong pedigree in the back-office and lead the functionality charts in this area along with True Potential. Focus and TrigoldCrystal have strong POS backgrounds, while Distribution Technology, JCS, CCL and Prestwood have built upon their original strengths of supplying sophisticated financial planning tools. 1st – The Exchange’s recent acquisition of N4 improves their front office capability, especially in the mortgage area. While most of the vendors have now extended out from their initial position to support both front and back-office, True Potential has always supported the breadth of front and back-office functionality and has added depth to the functionality over the last few years, making them overall winners in the functional review.

Few of the vendors have shown that they can scale to support large corporate projects but Focus, Distribution Technology, Crystal and N4 have established capability here. IntelliFlo has made some inroads to the Corporate space with projects at AXA and AEGON (Scottish Equitable). The acquisition of N4 by 1st – The Exchange could be a springboard for them to extend into this space.
For the smaller organisations, there are a number of aggressively priced systems available including Durell, CCL and Plum.

To help navigate this maze of supplier decisions AT8 have produced our Practice Management Upd8. Our report takes a comprehensive look at the suppliers, tracks their functionality, their integrations and their price points. It makes direct comparisons of their functionality at point of sale, the middle office and back office. We also look at the industry standing of each supplier and their key differentiators. The report is available at £2,500 plus VAT. Anyone interested in receiving a copy of the survey should contact us at marketing@at8-group.com or phone +44 (0)121 314 2504

Living in a tech-savvy house as I do, with apologies to my long suffering wife, I spent last Thursday with my eldest offspring queuing outside Brighton’s Apple Store for 4 hours.

What fun, that was! I was glad he’d pre-ordered it, as he would have been very disappointed, as they ran out after about 2 hours for those people just chancing to purchase one. But we were successful and walked away very happy!

I, on the other hand, had to wait for my service provider to get themselves into gear to send me mine by DHL – far more civilised, yet considerably slower.

So over last weekend, I’ve had a chance to crawl over the new device and thought I’d share my first impressions of Apple’s new baby. I’ll also try not to delve into areas that other far more qualified people have commented on.

So in a nutshell, here are my observations:

• Heavier – it’s larger and heavier than the iPhone 3GS – it has glass on both sides which gives the device a substantial feel
• Display – the new high resolution display is gorgeous – crisp and clear, with text looking like a printed page
• Video Calling – FaceTime is the new video conferencing system that Apple has developed for the iPhone 4 – it’s good and works like the Mac’s iChat – only WiFi at present, but still very good
• Cameras – the new higher resolution camera is excellent and combined with iMovie, can produce HD video footage and edit the results in real time – stunning. There’s a front facing camera too for FaceTime
• Speed – it’s significantly quicker than the old iPhones – in fact, it has as much grunt as the recently launched iPad – I can’t help thinking, a new version of the iPad will be out soon.
• iOS4 – the new name for the iPhone Operating System – this is available for earlier versions, too, and adds some good extra functions

There have been some press comments about signal attenuation when holding the device, but this is something I’ve not experienced – in fact, the performance of the radio is a lot better than the 3GS, with usable signal in my office, where previously I struggled on the O₂ network. Also, once the unit is fitted with one of the new ‘bumpers’, a case manufactured for the first time by Apple, then all the exposed aluminium antennae are covered and so the ‘problem’ disappears – if you don’t have a bumper, then maybe taking Steve Jobs advice might help – “just don’t hold it that way”!

So is it a game changer? Well, Apple has responded well to its competitors – as we’ve mentioned before, it still is going to be interesting to see whether its controlling ethos will prevail or the more open ‘morals’ of Android will become more ubiquitous, but Apple do keep on changing the shape of the football pitch.

With innovations like iAds, the ability to monetise software developments more easily adds to Apple’s armoury and will no doubt change the way in which apps are funded which might encourage more to join the development game.

The number of suppliers of technology solutions to the UK market has grown steadily over recent years. We have new and relatively new start-ups such as 2020 Adviser and True Potential, we have overseas companies entering such as Profida and Broker CRM. Alongside these, the established players such as 1st – The Exchange, Focus and IntelliFlo have been extending their reach, while systems like SSP, JCS and Plum have also been revamping their solutions. It could be argued that the market has become overcrowded and we have been predicting consolidation amongst the existing players for some time, (AT8 has just produced a report analysing the various vendor’s solutions).

The process of consolidation began last year with the merger of two of the biggest players in the Mortgage market – Trigold and Crystal and this week accelerated with the acquisition of N4 Solutions (N4) by 1st – The Exchange.

There have been a number of weaknesses in the offerings from 1st – The Exchange including:

• Lack of an online solution for the adviser market
• A weaker point of sale offering for Corporate clients (Adviser Evolution failed to gain traction in this space)
• Lack of experience in delivering to large Corporate/Enterprise clients.
• The lack of a clear joined-up sales message across the various disparate product offerings – which often overlapped/competed with each other

The acquisition of N4 Solutions should help to address the top three issues but depending on how well it integrates N4, the fourth issue may be either resolved or exacerbated. There is a major rebrand that has been in the pipeline for the last few months to bring these brands together and it is our understanding that this has been delayed to ensure the N4 products are included. This may help resolve the issue four. N4 was founded in 1999 by a management group with a successful track record and knowledge of the financial services industry. Rapid initial growth led to the company having 100 staff based in their ‘rural’ offices near Cirencester. The vast majority of staff has expertise in mortgages and financial services, as well as business consultancy and technology. The company considers itself to be stable, secure and successful. Based on the financial performance of the company, this view does not seem unreasonable. In July 2007 N4 was acquired by Experian for ‘an undisclosed sum’ (believed to be between £20 and £30 m)! There does not appear to be any specific figure available and even the Experian accounts that refer to acquisition expenditure of $1.7bn only highlights two specific figures and groups N4 under ‘other’. N4 produces and submits full audited accounts to Companies House (auditors are Baker Tilly). The company’s financial results for the year to March 2009 are a turnover of £13.8m up from £9.5m (a 45% increase) and a profit after tax of £3.5m from £1.2m (a rise of 178%). Its Net Assets were £10m and employee numbers were up from 66 to the 84 referred to above.

The justification for the acquisition appeared to be the bringing together of N4’s vertical market expertise with Experian’s market-leading ability in application processing and decision analytics, along with lead generation and property valuation models. N4 had a number of successes under the Experian umbrella including projects at Nationwide and Aviva but didn’t achieve (and arguably didn’t strive for) wider market positioning. N4 continued with an entrepreneurial drive which was beginning to look uncomfortable in the very corporate Experian family and a Management buyout of N4 was done in April 2010. Less than two months later, the management team sold the company to 1st – The Exchange.

When LDC took over 1st – The Exchange it was clear that they were positioning themselves to invest further in creating a substantial technology player in the financial services market. The N4 acquisition is the first step of what may or may not be others in order for them to achieve their vision. N4 brings with it substantial Enterprise experience of success which 1st – The Exchange has lacked. N4 has delivered some large projects including a substantial project at Nationwide. However, they – like others – have had difficulties and ‘expectation gaps’ to manage with big implementations.
N4 and 1st – The Exchange have worked together on several large projects in the past including Intrinsic and Norwich and Peterborough where N4’s POS system was integrated to Officeweb. These projects appear to have gone well and should bode well for the integration.

At Nationwide N4 delivered a mortgage origination system and this mortgage capability will have been of real interest to the 1st – The Exchange management. 1st – The Exchange has been promoting consumer facing solutions to the lenders and the ability to include the origination piece will greatly enhance their offering in this space. Adviser Evolution – the POS system – from 1st – The Exchange has struggled to gain traction in the market and N4 has a strong POS offering, supporting mortgages as well as life products, (although it appears less productised than most). The N4 solution gives an online alternative to Evolution that is badly needed although 1st – The Exchange a keen to point out that they remain committed to Adviser Evolution despite the acquisition.

For several years 1st – The Exchange has had too many products, gained through acquisition that have not been rationalised into a single branded, joined up solution. It should be possible to merge the solutions into a single family as the solutions already link up at client sites and largely complement rather than overlap. However, given the track record of addressing this issue it remains a concern that this will not be done in a timely manner. If properly adopted, the N4 acquisition has the potential to be the strategic solution and justification to ‘retire’ the other product entities gracefully, but it could also further exasperate the confusion of product strategy and choice – time will tell.

Taken as a whole the acquisition makes a lot of sense. It gives 1st – The Exchange parts of the application stack of a distributor that it didn’t address well. If the right focus is given to making the integration work it should enhance both parties position in the market. We await further signs of progress with great interest.