ARMONK, NY -- IBM today announced a definitive agreement to acquire Varicent Software Incorporated, a leading provider of analytics software for compensation and sales performance management. Varicent is a privately held company, with headquarters in Toronto, Canada. Financial terms were not disclosed.
Varicent software automates and analyzes 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," said Les Rechan, general manager, business analytics, IBM. "For the thousands of sales organizations still relying on silos of data, spreadsheets and e-mail to manage sales, there is an enormous opportunity to apply analytics to this vital area of business and uncover new, untapped growth opportunities."
“Sales Performance Management is still viewed by many in the industry as an art versus a science, but there is plenty of opportunity for this mind set to change,” said Dan Shimmerman, president and CEO, Varicent. “As part of IBM, we can now bring our technological expertise in maturing and advancing the efficiency and effectiveness of the sales function to a broader range of clients across the globe who are looking to improve their processes, and strategically align incentive compensation with profitable growth.”
With growing volumes of data, companies are increasingly looking for ways to automate and gain faster, more accurate intelligence on sales and financial management data in order to increase competitiveness. According to Gartner, organizations that adopt compensation management solutions can expect to reduce errors by more than 90 percent and reduce processing times by more than 40 percent.
Varicent's software automates and integrates all aspects of sales, client and financial performance management across the enterprise, which is traditionally a labor intensive process. Unlike traditional tools, Varicent provides a single management system that relies on a sophisticated calculation engine to model and analyze the effectiveness of incentive spend.
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 analyze 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 will combine Varicent with its R&D and prior acquisitions including Algorithmics, Clarity Systems, OpenPages, Cognos and SPSS, to expand IBM capabilities in business analytics and optimization 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 has established the world’s deepest portfolio of analytics solutions, business and industry expertise. This includes almost 9,000 dedicated business analytics and optimization consultants and 400 researchers. IBM secures hundreds of patents a year in analytics, and continues to expand its ecosystem, which consists of more than 27,000 IBM business partners. IBM has also created eight global analytics solution centers in Berlin, Beijing, Dallas, London, New York, Tokyo, Washington and Zurich.
These investments have enabled IBM to introduce Smarter Analytics Signature Solutions to address vital client issues such as fraud detection, financial operations and customer service. They have also led to breakthrough technologies like IBM Watson, a new class of industry specific analytical capability that uses deep content analysis, evidence-based reasoning and natural language processing to identify relationships buried in large volumes of data that can be used to improve decision making.
The acquisition is subject to customary closing conditions and is expected to close 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.