IBM announced it has acquired Clarity Systems, a Toronto-based vendor of performance management software and consulting. Terms of the deal were not disclosed. (My most recent blog and analysis about Clarity Systems can be found here. The acquisition fills an important hole in the IBM Cognos applications portfolio, as Clarity FSR is a leading application for automating and managing the close-to-report cycle. This capability has become essential for companies that are required to file financial statements with the U.S. Securities and Exchange Commission (SEC) under its “interactive data” mandate. That mandate, which is being phased in now, requires these corporations to tag their financial statements (and most of the footnotes attached to the statements) as well as their 8-K forms (which are essentially press releases, but especially earnings announcements). I estimate that for a large majority of Fortune 1,000-size public companies, automating the close-to-report cycle alone will have a positive ROI and a short payback period. This is why earlier this year I listed automating the close-to-report cycle as a 2010 priority for finance departments. Many finance departments use up a great deal of time of highly paid employees in this process, cobbling together tables with data from multiple sources; writing, editing and reviewing scattered snippets of text and triple-checking the resulting documents for errors. Many of them, too, will have to automate the process of tagging data to reliably meet filing deadlines. I also expect that most corporations ultimately will prefer to prepare their own filing documents internally and use the financial publishers (Bowne, Donnelley and Merrill are the leaders) as conduits rather than outsourcing this work to them.