Misys chief executive, Mike Lawrie on his interim results

This is your first set of results as CEO. Before we get into the
detail, what is your overriding impression of Misys to date? What have you found
since you arrived?

Well, I’ve found out lots since I’ve arrived. One, there’s tremendous
opportunity. Misys is very well positioned in a couple of really important
growth markets: the banking industry and the healthcare industry. And there is
no question that not only is the opportunity there, but that Misys has many of
the assets, many of the products and the people, and the desire to win and grow
with those markets.

You have announced significant changes to the senior management. Can
you talk me through what’s happening there?

I think it’s very important, as we begin the turnaround programme in Misys –
and admittedly it’s still early days yet – but as we begin to frame the
challenges and we begin to put the game-plan together, that we have a leadership
team that has the passion, has the energy, and is comfortable being held
accountable for the results. And, to that effect, we are beginning to make some
management changes.

Cost discipline was a highlight in Healthcare. How can you keep a
tight grip on costs and turn around that division?

Well, I do applaud the management team and the people in Raleigh for making
sure that, as they saw some of their order intake begin to decline, they took
the necessary costs and expense actions to try to preserve as much profitability
as possible. So the name of the game, going forward, will be to prioritise: to
make sure that the investments that we are making, whether those investments be
in development or in our go-to-market capability, are tied very closely to key
value adding activities for our customers, so that we can continue to drive
value and add value to their businesses, which would then help Misys Healthcare
get back on track from a revenue performance standpoint.

The focus on Banking is weighted towards Treasury and Capital
Markets. How are you performing here? What are the opportunities?

In terms of installed base, our installed base in core banking is bigger than
treasury and capital markets, but treasury and capital markets is benefiting
from a couple of things. One, there’s been a shift in the spending priority; so
there is more shift in the capital markets side of the financial services
sector. Two, there’s been a pretty strong shift to the buy side from the supply
side. So our products fit well to those trends in the marketplace.

In addition to that, we’ve got a very energetic management team in treasury
and capital markets that’s really modernised and rebuilt their product line. And
that product line, along with the services that we’re offering, is right in the
sweet spot of the value chain that our customers are expecting from us. As a
result, we are gaining new customers and we’re enjoying a very nice growth rate.

I know it’s early daysyet, but what are the priorities for
Misys?

The priorities have been really the same from day one. We have to completely
align ourselves around the markets and the customers we serve. Everything we do
every day has to be geared to how we add value to our customers. Underneath that
we’re looking at how we go to market, the effectiveness of our sales force, the
effectiveness of our professional services organisation, the effectiveness of
our developmental organisation.

So, for the money we are spending developing new products and offerings, are
we getting those to market quickly enough? Are they at the sufficient quality
level that we need to satisfy our customers? And are we developing the financial
metrics which the management team will be held accountable for going forward.
Those are the key priorities as we think about our business going forward.

Can you give any guidance on the sort of timescales or milestones
people should have in mind when they think about this turnaround?

Yes, I have said this before. I think there is a lot of opportunity in the
market and, clearly, Misys has a lot of the assets necessary to capitalise on
that market opportunity. There are also a lot of challenges. Misys has not
performed particularly well over the last several years. That’s been well noted
and it’s accurate.

So I think this will be at least a three to five year turnaround, very
consistent with what I have said before, but we’re certainly going to make
progress long before that.

The presentation of these numbers is quite complicated, but there are
clearly areas of weakness in there. What is your take on these results?

My take is that these results are mixed, but I think you have to look closely
at the breakdowns. For example, in our treasury and capital markets business,
these are really good results.

New customers are being attracted to Misys’ platforms, like Opics and Summit,
and we’re beginning to penetrate important emerging markets, like China and
India.

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