Tuesday, 3 November 2009

Capita divests IBS R&B unit to Civica

Over the summer, Civica acquired IBS's revenues & benefits unit from Capita - following the Competition Commission's decision to force Capita through a divestment – see Capita to divest IBS Revenues & Benefits unit.

I was quite surprised that Capita divested the unit to Civica as, with Civica's existing base of R&B back office and Comino workflow/DIP customers, it makes a serious competitor to Capita's own R&B business. But as I understand it, Civica were the only credible bidder with the cash to complete the deal.

In practice, I believe that Civica has done well and bought the unit at an apparently bargain price. I'm sure that the indecision brought about by the CC investigation has harmed both the IBS business and staff, but now Civica has a complete, competitive R&B offering – and a good upgrade offering to its existing R&B back office customers running Civica's very old, Pick-based, back office software.

However, I still believe that Civica will have an uphill struggle to sell its now Progress-based solution to new customers – particularly the larger users such as the new unitaries. But perhaps they will win a sympathy vote from those customers unhappy with Northgate's decision to switch off support for the old Anite Pericles product (and unwilling to move into Capita's extensive grasp).

Over the past year I've spent some time with external companies looking at the UK local authority market and considering trying to enter the R&B market by developing new back office products from scratch, but all seem put off not just by the development cost, but also by LA prospects' desire to see three live reference sites, the resulting lengthy time to market, and the possibilities of future central government changes in the way revenues are collected and benefits handed out.

Seeing no potential new entrants, we now must live with the three R&B suppliers, each of them with competent solutions, but neither of them with clearly the best solution, and each of them with at least one major drawback.......

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