The Liberty Lake-based banking software division of Dutch computer-services giant Getronics has shrunk its work force here by more than half over the last four years, to about 80 employees, but is optimistic that its fortunes will improve soon.


Art Smalley, the companys top executive here, says that the division has remained profitable over that period and is well-positioned to begin growing its work force again if needed as it acquires new business, which he considers a good possibility this year.


I think the outlook is very promising, asserts Smalley, vice president of Getronics Financial Business Solutions unit, which provides customized banking software to mostly large financial institutions around the world.


Listing off several sizable contracts the division has under way or is competing for, he adds, I would say the amount of activity were seeing is very high. One of the contracts it currently is working on for a big U.S. bank, and for which it will begin installing software next year, is the largest such project in the 20 years Ive been with the company, Smalley says.


He adds that the division is competing for another contract that has the potential to be even larger.


As more of that happens, I see us ramping up, Smalley says.


The division derives its revenue by licensing, installing, and maintaining banking software it has developed. Its current flagship product is software called Globalfs that offers centralized-server operating capability and security and training enhancements over the product it succeeds, called Mosaic OA. Mosaic still is used widely in the banking industry, but Getronics no longer is marketing it.


The software developed here is sold by Getronics subsidiaries worldwide as well as through a network of distributors, and is designed to be adapted to a variety of languages, currencies, and regulations.


One of the most-touted attributes of the Globalfs software is that it can work on a clustered server, linked to multiple locations, which can eliminate huge costs associated with installing separate servers in potentially hundreds of branches, Smalley says. Another major selling point, he says, is its off-network processing capability, which enables bank tellers to complete transactions at their workstations even when the networks to which the workstations are connected are down.


The divisions clients currently include 11 U.S. banks and about 50 institutions elsewhere around the world. Domestic work accounts for about 80 percent of its total revenue, Smalley says, but he adds, The international business continues to be important to us, and has huge growth potential.


Some of the divisions current international clients, he says, are located in Argentina, Venezuela, Australia, the Middle East, and the Asia-Pacific region.


Getronics introduced its Globalfs software eight years ago, but the company has only begun to infiltrate all of the marketsdomestically and internationallywhere it believes the product still has strong potential, Smalley says. He says it got a big boost in marketability about two and a half years ago when the software was upgraded to take advantage of Microsofts .net technology.


He says that dealing with ongoing consolidation and a high rate of employee turnover in the banking industry, including among top executives, is one of the challenges the division here faces in trying to grow its client base and revenues. Executive turnover often can delay big software-installation projects or can cause them to be revamped in midstream, which disrupts Getronics work flow and its personnel management, he says.


Although the banking industry generally is stronger now than it was some years ago, Smalley says top bank executives tend not to make decisions as quickly as they did in the past, such as on information-technology changes. European banks, for example, tend to want proof of concept demonstrations that can be both lengthy and costly, with no guarantee of gaining their business, he says.


Those factors plus some corporate restructuring and the international outsourcing of some work have contributed to Getronics work-force reductions here, Smalley says.


The companys Financial Business Solutions division occupies about 60,000 square feet of space on the second floor of a 305,000-square-foot, two-story building at 22425 E. Appleway. It employs about 130 people altogether, counting workers it also oversees in Atlanta, Chicago, Denver, and Milford, Conn.


The unit here is a small part of Getronics operations. Overall, the company employs about 4,000 people in the U.S. and 26,000 worldwide. Smalley says he believes, though, that the division plays a significant role in the companys North American growth aspirations and that the company will be investing more money in that segment of its business, given tightening margins in some of its other segments.


The operation here dates back 30 years, but has undergone huge change over that period.


It was founded in 1977 as International Systems Corp., later shortened to ISC Systems Corp., and initially made computer hardware as well as software for the banking industry. In 1984, ISC developed the sprawling structure where Getronics now is a tenant, and later in that decade it employed as many as 700 people on its 46-acre campus there.


The first big change came in 1989, when it merged with Bunker Ramo, a U.S. subsidiary of Italy-based Olivetti S.P.A to form ISC/Bunker Ramo. The company changed its name to Olivetti North America Inc. about two years later, then to Olsy North American Inc. in 1997. Olsy merged with Wang Laboratories Inc. in 1998 to create Wang Global, and Getronics bought U.S. rival Wang Global the following year.


Through that transformation, the markets that the business served also changed as it ceased all on-site manufacturing and some functions were moved to the eastern U.S., where most of the nations biggest banks are located. Getronics still had about 350 full-time equivalent employees here in late 1999, but closed a call center at the Liberty Lake facility the following year, and since then its Spokane-area work force has continued to shrink.


Smalley, a Connecticut native, joined the company in 1989 as vice president of finance and controller. He was promoted to chief financial officer in 1995, and was named to the companys top administrative position here in 2002, succeeding Michael Kerr.


The Liberty Lake divisions Amsterdam-based parent, Getronics NV, is a roughly $3.5 billion-a-year conglomerate and one of Europes largest providers of information-technology services, but has been experiencing a downturn of its own recently.


In an unscheduled annual report pre-release in February, it reported a 2006 net loss of 145 million euros, or roughly $195 millionfar worse than analysts expectations. It attributed the loss to write-offs in the U.S., United Kingdom, and Belgium, and to losses on the sale of some units. It also announced that it wont pay a dividend this year and withdrew its revenue target for 2008, saying it intends to focus instead on margin improvement and cash generation. Additionally, it recently named a new chief financial officer after its former CFO left in November in what it called a mutual agreement.


A Dutch newspaper reported last month that Getronics is preparing itself for a sale, and that the companys banks had instructed its new CFO to take the necessary steps to position it to be acquired. The article said that KPN, a big Netherlands-based telecommunications company, is interested in acquiring Getronics, but only in a slimmed-down form that wouldnt include its businesses in the U.S., Britain, or Spain.


Contact Kim Crompton at (509) 344-1263 or via e-mail at kimc@spokanejournal.com.