The acquisition means Cognos could focus on what it characterises as corporate performance management, which includes software for managing, analysing and reporting on a large corporation's vast collection of data.
Cognos has agreed to pay $160m (£100m) in cash and stock for Adaytum, a company of 300 employees, and expected the deal to be complete in January. The purchase has already been approved by the boards of both companies but is subject to regulatory approval.
The acquisition should add roughly 1,500 customers to Cognos' portfolio, bringing its total tally to more than 22,000 customers worldwide. Some companies on Adaytum's list include Toyota, Lockheed Martin, Pfizer, 3M and American Express.
"Adaytum is a breakthrough acquisition for us," said Cognos chief executive officer Ron Zambonini. "We believe the addition of Adaytum will help us secure the undisputed number one position [in the business intelligence market]."
Although the purchase could affect its fourth-quarter earnings, Cognos is buoying the deal with $338m in cash and cash equivalents on its books at the close of its third financial quarter, which ended 30 November. The acquisition of Adaytum was not expected to drag down Cognos' finances.
"They've done a good job managing their business," said Tom Manley, chief financial officer at Cognos. Adaytum was near break-even in the last quarter, he added.
Cognos reported a profit of nearly $20m for its third quarter, and revenue of $138.1m, an 11% increase compared with the $124.2m collected in the same period last year.
Net income for the fourth quarter was $19.9m, compared with $13.3m for the same period last year.
Not accounting for the impact of its planned acquisition of Adaytum, Cognos said revenue would increase this quarter to between $155m and $157m.