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SaaS-Based Budgeting Helps Manufacturer Fight Downturn

With revenue and cash flow in flux, power equipment maker Vicor speeds and improves financial reporting and analysis.

Cash is King in this economy, but nearly two-thirds of financial professionals say they are uncertain about just how much cash will be flowing into corporate coffers in the months ahead. What's more, 71 percent of North American financial executives recently interviewed by the Business Performance Management Forum say they'll have to repeatedly replan and reforecast over the coming months.

Reworking budgets and sharing and approving new plans is a painful process when you're using conventional spreadsheet-based approaches. Indeed, Aberdeen Group recently reported that financial planning agility will be the number-one pressure facing companies trying to cope with the current economy.

Could solutions based on a software as a service (SaaS) model be an answer to the agile budgeting and planning imperative? Electronics manufacturer Vicor is using a SaaS-based tool from Adaptive Planning to come to grips with fast-changing demand.

"It not only enables us to do better comparisons of budget versus actual performance, business unit by business unit, but the reporting flexibility lets us slice and dice and look at the business in many different ways," says Doug Brunton, Vicor's director of financial systems.

Until late 2007, Vicor relied on a conventional spreadsheet-based budgeting approach. But the $250 million manufacturer of power conversion equipment knew it needed to do a better job of collecting budget information and reporting results across its separate power-brick, chip and integrated-circuit businesses. Complicating matters were the company's far-flung operations, with its headquarters in Andover, Mass., manufacturing in Sunnyvale, Calif., and Japan, and various regional sales offices.

Vicor was already using BI-related technologies, including Cognos Powercubes and PeopleSoft ERP reporting, but the company chose Adaptive Planning's SaaS-based performance management application as the backbone of a new budgeting process.

"Of all of the options we considered, Adaptive Planning was the most seamless to our users," Brunton says. "It functions just like an Excel spreadsheet. Users can familiarize themselves with the model in less than an hour, and when they enter information, the application consolidates all of the values."

Even more important, the SaaS-based option offered the best hope of meeting Vicor's aggressive eight-week deployment schedule, Brunton says. Indeed, the deployment was completed on time, and 65 users across the company were able to enter, review and approve the 2008 budget within six weeks, cutting months off Vicor's old budget cycle.

"We used to be lucky if we finished budgeting within five months," Brunton says. Vicor credits "the uniformity of the model, the elimination of individual spreadsheets and recalculations, and the ease of the workflow and approval" with streamlining the process.

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