BROOKFIELD, Wis. – Fiserv traditionally takes a hands-off approach with acquired companies, but can it do that with the recently acquired EDS Credit Union Industry Group, which by its own admission has been somewhat neglected by EDS? Leaders of the EDS group (now known simply as CUIG) say that in recent years EDS slashed investment into the group and it even wondered if EDS was committed to it. They weren't. As part of a new strategy, EDS is selling off what it calls "non-strategic" businesses, a bucket the credit union group fell into. But if you're talking sheer numbers, CUIG is a force. It still boasts approximately 900 credit union core processing clients. The question now is can it keep them and even expand its base? Bill Rogers, publisher of Biometric Digest and a former Vice President of CUNADATA (which eventually became the EDS CUIG) and EDS Regional Manager, says he's followed the unit for years and believes EDS made some critical mistakes that led to its sell-off. The first was when EDS bought CUNADATA from CUNA it dropped the name in favor of EDS-Credit Union Services Division. This he believes signaled a breaking of ties with the credit union industry. That's debatable though since few major credit union third-party players today have clearly identifiable credit union names, but what's not debatable says Rogers is the system philosophy EDS stuck to. That is in the `80s as it acquired other data centers and product lines, its goal was to consolidate them all into one system. EDS believed it was too expensive to keep all these disparate systems, said Rogers. Credit unions were forced to make changes, and many went to other vendors. This acquire and assimilate strategy is the polar opposite of Fiserv's said Rogers, which touts the fact that it acquires a company and lets it run autonomous. "EDS got run out of Dodge, so did all their other banking divisions. It couldn't and didn't want to compete. It didn't help that in the credit union division, the leadership changed every two to three years. Fiserv is going to have to make some changes in that group or they're going to continue to lose business." What's There Can Work Fiserv doesn't necessarily agree. The company isn't under the disillusion that CUIG is thriving with no major changes needed. Quite the contrary, Fiserv believes changes do need to be made, said Tom Neil, president of Fiserv's Credit Union and Industry Products Group, but he believes that existing EDS staff can make them. "If you go back five to 10 years, EDS was a big player and a fairly big competitor with us. But the company's interest was just not in servicing credit unions. It moved to more multi-billion dollar deals," he said. Neil said that's no fault of the people running the credit union division. He said they've been frustrated in recent years by the lack of commitment from corporate, and now Fiserv has to "breathe new life into these people." "For whatever reason it became non-strategic to the parent company. You get a lack of product investment, and sales dry up. That's the position they've been in. If we invest the dollars in the product side we can restart the sales engine and clearly halt the attrition," said Neil. Why does Neil think the right people are in place? "You try to learn as much as you can in the due diligence process. We learned the majority of these people have 15 to 25 years of experience in the credit union space. They have great ideas. The governor has just been on for a while. They haven't been able to execute their creativity, to show customers they're special," said Neil. So yes Fiserv will maintain its autonomous approach with CUIG, yet with needed financial and leadership commitment to it, Neil believes the unit will be able to right its own ship. Some new staffers will be hired to help it operate on its own, including a CFO and some product managers. As for technology, CUIG's two core products are the in-house CUBE and online Premier and CUBICS core systems. There are no plans to discontinue any of the systems at this point, though new investment in them is sorely needed. Neil said EDS' home banking solution, Virtual Branch, is doing well with EDS clients and Fiserv can help market it outside of EDS credit unions. One product Fiserv is particularly excited about is Crossroads, a file transfer product run out of a facility in Madison, Wisconsin. "It makes the movement of data very easy and very straightforward. It turns out that it has great appeal not only in the credit union space, but in banking. It was a diamond in the ruff," said Neil. Contrary to what some think, EDS doesn't just serve small CUs. It has billion-dollar clients including the $1.2 billion Texans CU, and even the nation's largest corporate, WesCorp, runs on an in-house AS400 EDS system. Given the initial anti-trust concerns and the shape of CUIG, this Fiserv acquisition was certainly not a guaranteed success story in the making, so why do it? Neil said there were four primary reasons: * Fiserv is committed to the credit union industry; * Fiserv thinks credit unions have a bright future in the financial marketplace and the market will grow; * The ability to cross-sell value-add products to even more credit unions with the acquisition of EDS; * The opportunity was there. For now Fiserv has simply dropped EDS from the name making the unit's current name the Credit Union Industry Group. Neil said that name doesn't make sense, and the new name will be unveiled in September in Orlando at the group's annual user's conference, Visions.