International Business Machines Corp. is transferring the ownership and operation of its check image software development unit to its business partner Check Solutions Co. of Memphis.
Check Solutions was formed in 1990 with First Tennessee Bank to install and customize IBM software.
Since then, however, Check Solutions has created its own applications, said Geoff Emerson, director of IBM Payment Solutions. This meant that customers would turn to IBM for some questions and support and to Check Solutions for other matters.
The realignment "minimizes confusion and simplifies the process," said Joe Rowell, Check Solutions president. All but three or four of Check Solutions' customers are also on IBM's client list.
"We concluded that our customers would be better served by a single channel," said Mr. Emerson.
Consultant Terence Roche, managing director of M One Inc. in Phoenix, said the move might persuade more banks to migrate to image-based check operations, which can be costly to implement but offer new products that can generate revenue. A single point of accountability makes imaging more attractive, he said.
"Banks get tired of running interference with a bunch of companies," Mr. Roche said.
The consolidation probably will not strengthen either company in the imaging market, he said. There are no dominant players in the check-imaging industry, Mr. Roche said.
IBM's image division is based in Charlotte, N.C. Its software development operations-which include its new check image archive-and its servicing and marketing divisions will be transferred to Check Solutions. The 110 image employees are being offered positions in Check Solutions, which will expand its Charlotte office.
The check operations employees-there are also 110 of them-will stay with IBM. The image division accounts for about one-quarter of IBM's check business, Mr. Emerson said.
IBM will still operate its check hardware business, including manufacturing, engineering, and maintenance; and its Check Processing Control System software. IBM Global Services will also remain responsible for check systems integration contracts.