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Varicent Deal To Expand IBM
Varicent Deal To Expand IBM's Business Analytics Mix

By Mark Long
April 13, 2012 11:47AM

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Varicent's software, acquired by IBM, is focused on the automation of sales activities in the areas of compensation, incentives, quota development, territory optimization and more, said Ventana Research CEO Mark Smith. With the acquisition of Varicent by IBM, Varicent's analytics can be rented in the cloud or hosted for easier management.
 



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.

"These legacy platforms are inefficient, inflexible and expensive and can pose liabilities to ensuring good governance over variable-pay expenses," Leigh said.

Reducing Errors and Processing Times

Varicent's software is focused on the automation of sales activities in the areas of compensation, incentives, quota development, territory optimization, channel management, analytics and planning, said Ventana Research CEO Mark Smith. And they can be rented in the cloud, hosted for easier management or purchased for use inside the organization.

More than 180 customers are already using Varicent's software, including Farmers, Hertz, Manpower and Office Depot. "Sales management is looking for intuitive metrics that can be centrally managed and work interactively," Smith wrote in a blog.

Gartner estimates that organizations adopting compensation management solutions can expect to reduce errors by more than 90 percent. Moreover, the research firm believes that these solutions can reduce processing times by over 40 percent.

"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," said Les Rechan, IBM's general manager of business analytics.
 

Tell Us What You Think
Comment:

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Maria Elena:

Posted: 2012-04-17 @ 12:51am PT
IBM has long been trusted in the computer software industry but they were able to manage to survive in the business despite the surge in small and cheaper business software solutions.

On the other hand, please allow me to share about KarmaCRM.com. With Karma, it's easy to stay on top of all your sales contacts, tasks and proposals. It's so easy to use and offers a free 30-day trial for all users.



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