IBM Acquires Varicent For Analytics Expertise

IBM continued on its shopping spree for analytics expertise with its acquisition of Varicent Software, a provider of analytics software for compensation and sales performance management solutions.

The acquisition advances IBM’s efforts to drive analytics capabilities into the hands of front-line employees, particularly in the area of sales, where many organisations still rely on silos of data and antiquated spreadsheets to manage this key area of their business. Varicent software automates and analyses sales data across finance, sales, human resources and IT departments to uncover trends and drive improved sales performance.

Privately held

The software is used by nearly 200 of the world’s largest banks, insurance companies, retailers, IT and telecommunications providers to enable better quota planning, as well as territory and channel management.

Varicent is a privately held company, with headquarters in Toronto. Financial terms of the deal were not disclosed. Varicent software automates and analyses the collection and reporting of sales data across finance, sales, human resources and IT departments to gain efficiencies, uncover trends and improve sales performance.

The acquisition accelerates IBM’s Smarter Analytics capabilities across line-of-business operations in all industries, and will be combined with IBM’s existing software offerings that are delivered to clients through on-premise or cloud computing models.

“The acquisition of Varicent advances IBM’s efforts to drive analytics capabilities into the hands of front-line employees to transform business operations and ultimately improve the bottom line,” Les Rechan, general manager for business analytics at IBM, said in a statement. “For the thousands of sales organisations still relying on silos of data, spreadsheets and email to manage sales, there is an enormous opportunity to apply analytics to this vital area of business and uncover new, untapped growth opportunities.”

Varicent’s software automates and integrates all aspects of sales, client and financial performance management across the enterprise, which is traditionally a labour-intensive process. Unlike traditional tools, Varicent provides a single management system that relies on a sophisticated calculation engine to model and analyse the effectiveness of incentive spend.

Determining compensation

The software allows clients, such as banks, insurance companies, retailers, information technology and telecommunications providers, to more accurately determine compensation, streamline territory assignments, manage quotas, and report and analyse sales activities. The software also strengthens audit and compliance readiness and provides transparency for all aspects of incentive compensation.

Founded in 2003, Varicent has more than 180 customers using its software, including Starwood Hotels, Covidien, Dex One, Manpower, Hertz, Office Depot and Farmers.

IBM said it will combine Varicent with its R&D and prior analytics-related acquisitions, including Algorithmics, Clarity Systems, OpenPages, Cognos and SPSS, to expand IBM capabilities in business analytics and optimisation across finance, sales and customer service operations. These acquisitions are part of IBM’s larger focus on analytics, which spans hardware, software, services and research.

IBM anticipates business-analytics revenue for the company will reach $16 billion (£10bn) by 2015. IBM has been building its R&D and acquisition assets to define this new business opportunity.

IBM’s acquisition of Varicent is subject to customary closing conditions and is expected to be completed in the second quarter of 2012. With the closing of this acquisition, it is expected that all of Varicent’s employees will join IBM’s Software Group.

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