Discontented with upper management and the products they sell, many executives at SS&C Technologies have resigned or are leaving within the next month. Beginning with a second quarter earnings debacle, rumors surfaced about installationpratfalls and have since turned into truths that SS&C can no longer ignore.
The damn broke this summer when SS&C, a portfolio management systems provider, did not meet second quarter earnings expectations, posting a decline of 13% comparedwith a year earlier. After the announcement, both John Kiley, head of U.S. sales,and Ian Mullane, head of European sales, were forced to resign, and a number oftheir former colleagues are following in their stead.
In the U.S., Mark Zimmerman has left, and three more sales executives are expectedto resign by the end of the month, says an industry insider. And, the London office has been poached by Financial Models Corporation (FMC). According to PhilBanas, director of sales and marketing for FMC in London, Robert Styles and OliverMills are joining FMC as senior sales executives, and Frank Glock will be comingon board as a sales executive.
Questions as to why these people are leaving point both to Kiley's and Mullane'sdepartures, as well as to dissatisfaction with the way SS&C is run and theproducts it sells. Kiley declines to comment on SS&C, only saying that he was nowheading up sales for the financial services business unit of Scient, an E-businessconsulting firm. Mullane could not be reached for comment.
An industry executive familiar with the shake-up at SS&C points out that many ofthe people that are leaving were close associates of Kiley and Mullane, two menwith strong sales backgrounds who shielded their staff from chairman and CEO BillStone.
"Bill is a tough guy to work for," the industry insider says. "He doesn't have alot of respect for his salespeople. He thinks of them as a necessary evil, but inthe other breath, he has mandated that he wants 30 salespeople by the end of theyear."
John Bardong, who joined SS&C last February as VP of enterprise sales and hassince subsumed the responsibilities once held by Kiley, defends the company bypointing to the many salespeople who have been hired in the past couple of months.
"I brought in some seasoned senior sales representatives from the industry: onefrom PeopleSoft, one from Oracle, pretty heavyhitters," Bardong explains. "The senior guys I brought in, I've made them managers. We have gone to a geographicstructure, with two managers in the East, a manager in the Mid-West, and we openedup operations in San Francisco which we did not have. We have one representativeon board there, and will hire another shortly. I have brought in six other peoplein the East to augment the staff."
All told, the SS&C sales organization is up to 20 bodies, with an expected numberof 25 by years end, Bardong adds. "There are six guys we've brought on board andanother guy, I'm preparing a letter for him today," he says. 'Three of the sevenwill be from Bloomberg, so, if anything, there is a mass exodus away from Bloomberg."
CAMRA, SS&C's portfolio management and accounting system, has proven to be a sorepoint for the company. Like its competitor Princeton Financial Systems, SS&C hasspent the past couple of years porting its accounting system, first developed forthe insurance industry, over to the asset management arena. CAMRA has had a strongpresence in the insurance industry, but it has had trouble turning what is aholdings-based system into a transaction-based one, a set-up that portfoliomanagers are more accustomed to.
Stone argues that this reporting architecture has not been a problem. "We believemore asset managers are interested in what they own today, and what they ownedyesterday isn't nearly as important," he says. "We can talk about the winners andlosers over a cup of coffee, but we need to manage what we own today."
Taking a slightly different approach, Bardong contends, "our R&D department hassome things coming out that would address those concerns. I was just in a managersmeeting, and they should be able to release these modifications shortly that willmake us a major player."
Bardong also admits that the firm has had trouble with system implementations atsuch firms as M.D. Sass, a firm that first signed for CAMRA back in 1997. "Theyhave not dropped the product, but they did have problems" Bardong says. "We'veapplied a lot of resources to make them happy. A key employee who knew how to usethe system has left, so they had to get someone else trained. It wasn't solely thesoftware itself."
The industry insider cites Sykes Asset Management as another buy-side firm thatwas ready to sign with SS&C but pulled out at the last minute because of newscirculating around the Street about failed implementations at similar firms.Speaking about Sykes, SS&C's CEO Bill Stone admits that "it was an opportunitythat we didn't close in the second quarter," but adds, "We are still pursuing it.We are still talking to them. We haven't lost it, but we haven't won it either."
Neither Sykes nor M.D. Sass could be reached by press time.
Stone couldn't say whether the third quarter will represent an up-turn for SS&C'searning, as the firm is now in the mandatory two-week quiet period before earningsare announced. Bardong points to GMAC, an account its signed last quarter for$750,000, as a sign that SS&C is, in fact, doing alright.
Bardong is not surprised at the impending departures, saying he expects somepeople who worked with Kiley to follow him.