IBM Broadens Analytics Portfolio with Acquisition of Varicent Software

IBM today announced a definitive agreement to acquire Varicent Software, a provider of analytics software for compensation and sales performance management.  Varicent is a privately held company, with headquarters in Toronto, Canada.  Financial terms of the acquisition, which is expected to close in the second quarter of 2012, were not disclosed. "Varicent expands IBM's analytics portfolio into the sales function of organizations," Paul Hill, vice president, Performance Management, Business Analytics, IBM, tells 5 Minute Briefing. "It is a line-of-business play."

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 is intended to accelerate 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.

"At large companies the challenge around pay for performance and getting that right is a significant challenge," Hill notes. "Obviously, IBM is a leader in analytics. In our performance management area which is in business analytics we already are very experienced at working with the office of the CFO in areas such as corporate budgeting, planning, forecasting, strategy management, and it became apparent to us that the sales function was really under-serviced."

According to IBM, 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.

For additional information, please visit