IBM (NYSE: 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 organizations still rely on silos of data and antiquated spreadsheets to manage this key area of their business. Varicent software automates and analyzes sales data across finance, sales, human resources and IT departments to uncover trends and drive improved sales performance.
The software is used by nearly 200 of the worlds 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 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," Les Rechan, general manager for business analytics at IBM, said in a statement. "For the thousands of sales organizations 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."
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 mindset to change, said Dan Shimmerman, president and CEO of Varicent, also in a statement. 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 continuously 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.