by John Henry
Posted 1/29/2003 12:17 pm
Updated 2 years ago
In 1995, Alltel changed the name to Alltel Information Services to more closely identify it with the growing Alltel name. At that time, AIS accounted for nearly 30 percent of Alltel's annual revenue.
Systematics was founded in 1968 by Jack Stephens and Walter Smiley. Stephens put up the initial $400,000, and Smiley provided the technical expertise to start the company.
Stephens Group Inc. owned 48 percent of the stock in Systematics when Alltel bought the company.
The acquisition of Systematics helped more than double Alltel's stock price at the time, but growth at AIS has undergone some ups and more downs in the '90s as it was faced with a shrinking market because of the large number of bank mergers.
John Steuri, a former top-level IBM executive, served as chairman and chief executive officer of Systematics/AIS from 1988 until he retired in 1996. In a 1996 article in Arkansas Business, one telecommunications analyst credited Steuri with taking Systematics "from a company in the mid-tier to the top."
Several stock analysts believed at the time that the division wasn't responding quickly enough to a shrinking market caused by bank mergers. Systematics' roots were in outsourcing contracts with the banking industry, and about half of AIS's contracts are with financial institutions.
Since about 2000, the most popular question regarding AIS has been when Alltel would sell it. Alltel Corp.'s telecommunication business has grown exponentially since the mid-1990s, leading investors and analysts to wonder when the company would sell the subsidiary to focus exclusively on telecommunications.
In July, just as he took over as CEO, Scott Ford said ownership of the division, which he said helped the company through billions of dollars of acquisitions in the late 1990s, could change as the market for that division evolves.
Ford said the financial services business is going through consolidation similar to what the telecommunications industry is experiencing. He added that although the division had the best return on capital in the company, it had experienced flat growth in a competitive field.
Last week, AIS laid off 100 employees, including 25 in Little Rock. AIS spokesman Steve Eddington attributed the layoffs to efforts to streamline operations.
Few realize the depth of Alltel Information Services' products and services. Here are a few facts listed on the company's Web site:
• 47 of the top 50 U.S. and 28 of the top 50 global financial services organizations rely on Alltel products and services.
• Alltel processes 28 percent of total U.S. consumer and mortgage loan accounts.
• Alltel services eight of the top 10 consumer lending organizations and nine of the top 10 mortgage lending organizations in the United States.
• Alltel processes more than 12 million bills each month for wireless and wireline communications companies.
• Alltel provides loan servicing automation for more than 22 million mortgage loans, with balances exceeding $2.4 trillion.
• Alltel's Advanced Commercial Banking System clients arrange nearly half of the world's syndicated loans.
• More than 114 million deposit accounts are processed on Alltel's deposit systems.
• About 50 percent of total U.S. mortgage debt runs on Alltel systems.
The company has spent about $650 million in research and development investment over the past five years.