REVIEWER: Craig Hogan, vice president of finance and controller for L-3 Power Paragon.
BACKGROUND: L-3 Communications is a leading provider of intelligence, surveillance and reconnaissance (ISR) systems, secure communications systems, aircraft modernization, training and government services. The company is a leading merchant supplier of a broad array of high-technology products, including guidance and navigation, sensors, scanners, fuses, data links, propulsion systems, simulators, avionics, electro optics, satellite communications, electrical power equipment, encryption, signal intelligence, antennas and microwave components.
PLATFORMS: L-3 Power Paragon runs KCI CONTROL on an Oracle database.
PROBLEM SOLVED: L-3 Power Paragon was using Excel spreadsheets for all of its forecasting activities. We track our forecasting starting at a per-person level for the entire year, including billable hours for each person, how many direct charges they will have and materials they will need. We then roll this up into a direct payroll forecast. Before implementing KCI's CONTROL, it was too difficult to track all the data at the individual level and see how everyone was performing. There was no way for us to easily modify forecast assumptions or to slice and dice data in such a way that we could quickly respond to changes. On the manpower side, spreadsheets were simply too labor-intensive. CONTROL makes our forecasting easier and more accurate. We can do in an afternoon what once took us several weeks.
PRODUCT FUNCTIONALITY: L-3 Power Paragon is using CONTROL in two ways in our forecasting cycle. First, we are using it to consolidate all our forecasts for the general ledger. Secondly, we are using it to forecast our expenses. In our industry, half of our costs, such as labor and materials, are tracked directly to the endeavor we are performing. The other half of our costs goes toward support functions. This means that expense forecasts are a critical component of the overall forecasting mix, and we rely heavily on CONTROL to keep track of those. Because CONTROL is built on a central repository, we finally have confidence that the data in our system is always correct and updated - and that we are generating the very best forecasts.
STRENGTHS: CONTROL eliminates confusion and uncertainty. Thanks to CONTROL, answers are immediate, so we are able to take corrective actions right away. For instance, any errors in the system about how a particular expense is booked are seen immediately. Everybody instantly knows what is happening, which means there are no secrets; we can operate more transparently and know what actions to take.
WEAKNESSES: CONTROL has a steep learning curve. You must take time to make sure your processes are set up correctly.
SELECTION CRITERIA: We chose CONTROL based on its flexibility and the ease with which it could tap into our Oracle database. We were also impressed with CONTROL's Excel-like interface, which ensured that our managers were comfortable with the product at the outset.
DELIVERABLES: CONTROL paid for itself in terms of process improvements within the first 12 months of implementation. Each month, we are able to create what used to be the equivalent of an annual operating plan because it only takes us half a day to do. We are able to quickly adjust our assumptions and move forward. We can now drill down into everything from tens of millions of dollars to a six-cent washer. We truly have the ability to see what is happening in our business and review actual results at a level of detail we never had before. The final proof is that we were able to eliminate 10 percent of our costs in our first year running CONTROL.
VENDOR SUPPORT: KCI offers a very high level of service. Originally we were fearful KCI would not have adequate expertise or sufficient depth to handle our concerns in a timely manner. We have been pleasantly surprised. Even though KCI is small, they have been able to support our company through the initial implementation and into the maintenance environment.
DOCUMENTATION: KCI provided extensive documentation to make it easy for us to navigate the product. However, CONTROL is extremely intuitive, and the documentation is rarely needed.
3625 Del Amo Boulevard
Torrance, CA 90503
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