NCR needs to stay on the cutting edge of the business-customer relationship.For most successful companies, the ability to adapt to the ever-changing economic and technological landscape, while still remaining relevant to its user base, presents a major challenge. One classic example is NCR, which began its history more than 130 years ago as the National Cash Register Company, making the first mechanical cash registers and thus revolutionising the way clerks accepted payments. NCR never saw itself as solely a cash register manufacturer and has now evolved into a global leader in consumer transaction technology, seeking to offer not only hardware but also software and integrated solutions to make the billions of daily interactions between consumers and businesses run more smoothly and efficiently.
In 1952 the company acquired Computer Research Corporation, a producer of a line of digital computers and applications in aviation; and the company began to pursue electronic applications for business machines as well as creating the first fully transistorised business computer. Later, advances in liquid crystal displays began the evolution away from fully mechanical hardware toward digital cash registers and other equipment.
In 1974 it adopted its current name, recognising that it needed an identity beyond its cash register roots. Innovations such as barcode scanners and data warehousing products helped to expand its reach. By 1985 it had become the sixth largest IT company worldwide but subsequently its growth rate slowed and in 1991 was acquired by AT&T for $7.4 billion. At this stage NCR’s annual revenues were more than $6 billion and it was still profitable.
NCR’s life as a subsidiary of AT&T was somewhat chequered. In 1992 it bought Teradata Corporation, thus acquiring the latter’s advanced and unique parallel processing technology and in 1994 changed its name to AT&T GIS. It suffered major annual losses in 1983/4/5 despite revenues being in excess of $7 billion. In 1996 its name reverted to NCR, before it was spun-off into an independent company the following year.
Cloud, analytics
Subsequently it has acquired several entities including 4Front Technologies, Ceres Integrated Solutions, Compris Technologies, Dataworks, Digital Insight, Radiant Systems and Retailix; whilst disposing of its computer hardware manufacturing assets to Solectron. These strategic moves increased its software and services expertise, thus differentiating itself from pure hardware providers, and allowed it to take advantage of the demand for cloud computing and data analytics applications. It has also aimed at every aspect of business-customer financial transactions; from self-service checkout and point-of-sale transaction technology to more advanced ATMs. With the rise in mobile-based payment systems, it has seen how mobile devices can play an instrumental role not just in payment systems but in all aspects of how businesses and customers interact.
Most recently, NCR seems to have adapted to the changing tides of the industries it serves, and its performances reflects this with, for instance, a rise in the share of its sales coming from the services it provides. Coupled with a reduction in the cost of providing those services, its overall gross margin has improved from just over 23% in 2015 to more than 27% last year. In 2016 its revenues were slightly up and there was a return to profit from the loss of 2015. Over the past 20 years or so, revenues have generally been in the range of $5.5 million to $6.5 million with the majority of years being profitable. Most importantly, it has taken advantage of industry trends thus allowing it to capture more of its revenue on a recurring basis.
Bill Nuti, the current CEO, seems to be mindful of the transformation the company has already seen and is likely to experience in the years ahead. He needs to ensure that NCR stays on the cutting edge of business-customer relationship technology, both in the rapidly evolving payments space and in applications such as self-checkout and e-commerce, as all the indications suggest that it can build on its legacy of innovation.