IBM has agreed to acquire privately held Varicent Software under undisclosed financial terms. The Toronto-based company, which provides analytics software for compensation and sales performance management, has 180 clients in the banking, insurance, retailing, IT and telecommunications sectors.
IBM recently announced the introduction of new Smarter Analytics offerings for addressing the emerging Big Data opportunities with respect to managing financial operations as well as decreasing fraud and nurturing next-generation customer relationships. Once IBM's Varicent deal closes, Big Blue expects to further advance its business analytics market leadership through the introduction of even more capabilities.
"The goal and aim of the addition of Varicent's sales performance management software will be to integrate it into our BA portfolio and existing offerings," an IBM spokesperson said Friday. "It is a nice complement to our existing performance management portfolio."
The Varicent acquisition -- combined with IBM's prior acquisitions in business analytics including Algorithmics, Clarity Systems, OpenPages and Cognos, and recent investments in predictive analytics such as SPSS -- is expected to provide IBM's clients with an even broader range of business analytics offerings.
However, it remains unclear exactly how IBM will be integrating the mix of technologies it has already acquired with Varicent's single management system, which is driven by a sophisticated calculation engine that models and analyzes the effectiveness of incentive spending.
"Since we just announced the definitive agreement to acquire Varicent, full details of the integration will not be disclosed at this time as they are still being worked out," IBM's spokesperson said.
Driving Enterprise Interest
Earlier this year, Gartner noted that the need for more advanced incentive compensation management functionality has been driving enterprise interest in packaged ICM solutions. In a report released last month, the research firm awarded Varicent's ICM platform a positive rating.
"Through 2012, enterprises will miss the equivalent of 5 percent to 10 percent of annual sales as lost opportunities," said Gartner analyst Michael Dunne. This could have been captured through improved management of sales territories, quotas and compensation plans, Dunne said.
For example, the increasing complexity of the commission, bonus and other payment schemes for insurance agents has rendered the basic ICM functionality in policy administration systems and even spreadsheets inadequate for insurers, driving interest in packaged ICM solutions, said Gartner analyst Steven Leigh. (continued...)
Posted: 2012-04-17 @ 12:51am PT
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