Previously published in The Digital CFO Magazine
Excelitas is a private company operating in over 10 countries. With over 7,500 employees, Excelitas has a 90-year-old history, evolving from EG&G and founded in the 1940s in Massachusetts. We sat down with Amit Shah, CIO of Excelitas to talk about the drivers for revenue automation and the impact of Aptitude RevStream on the business.
Sarah: Thank you so much for letting us interview you today, Amit. To start can you just tell us a bit more about Excelitas?
Amit: Of course. Excelitas is a private company, operating in 10+ countries, across five different end markets. We have grown to over 7,500 employees, and we focus on what we call optoelectronics and photonics. Our products are similar to semiconductor equipment in terms of sophistication, and they range from sensors in thermostats to illumination systems, optics for UV/ IR, and more. Over the last 11 years or so we’ve experienced significant growth from the acquisition of about 10 organizations.
Sarah: That’s so interesting. With that many acquisitions in such a short time what has your approach to technology in the finance department been?
Amit: There is always this big picture view and the broader aim to enable finance transformation through the use of digital technology. I know today we’ll talk more specifically around revenue recognition, but we have a number of projects running around close management, shared services, ERP modernization and so on and so forth. Automating the revenue piece is part of a much bigger transformation program to work toward the ability to quickly scale the business. Scale is the number one thing we want to build.
Sarah: So, let’s talk about your revenue recognition automation project. What were you using prior to implementing Aptitude RevStream?
Amit: We were using Excel and a bunch of macros. It took us, on average, six to eight weeks to do revenue recognition calculations. In the past, we didn’t have to do it on a quarterly or semi-annual basis but once you cross a certain threshold or if you go public, then you have to manage revenue recognition and reporting on a more consistent basis, as you know. So that was a key driver to think about a system-based solution.
Sarah: And talk to me about how you would incorporate all those acquisitions using Excel.
Amit: That made it even more complicated. Absolutely. That’s what we used to do, and it was just unsustainable. You can throw a lot of people at it in the short term to get it done, you know, but it was unsustainable because of the error-prone nature of it and just the complexity of our business. We make a wide range of products so, sometimes, one product goes for three-quarters of a million dollars, and sometimes it’s a small sensor for a thermostat for 10 cents. We’re operating in that kind of range and you know, doing that manually in Excel was never going to be sustainable in the long run. We wanted to build for scale, build for M&A so that as we acquired a company or companies, we could plug them into our revenue recognition system and the workflow we are building.
You have a unique approach to taking care of your customers and that played a huge role. I want somebody who is willing to grow with me, especially in a niche area like this, and it’s a bidirectional partnership.
-Amit Shah, CIO, Excelitas
Sarah: Can you talk more broadly about what the business was hoping to get from automating revenue management?
Amit: Yeah, you know, there are a number of things we wanted out of the solution. Having the ability to handle cost at the line item level or at the contract level, for example. The ability to handle both incremental and cumulative adjustment to our rev rec accounting, cost acceleration, the ability to do general entry with multiple cost lines for finished goods, and so on and so forth. Having a way of writing custom reports on top of out-of-the-box reporting. RevStream is flexible enough so we can continue to evolve with your solution, to add more functionality or reduce complexity if we decide to do so. One of the things I remember during the evaluation process was this question around data quality issues – how are you going to fix upstream data quality issues? Most of the solutions we evaluated expected data going into the rev rec engine to be perfect. With RevStream there is some flexibility to fix data quality issues directly within the solution.
Sarah: That’s great. Any other key differentiators?
Amit: Yeah, I think there was a big one and it has nothing to do with the technology. It has more to do with your company. For me, partnership with key vendors is very important. So, I always look for nimble and customer-focused companies. As we started doing more investigation, we realized that the agility you guys have, the willingness to get things done is very important to us. You have a unique approach to taking care of your customers and that played a huge role. I want somebody who is willing to grow with me, especially in a niche area like this, and it’s a bidirectional partnership.
Sarah: That’s amazing to hear. Well, thinking forward three to six months, what sort of benefits are you seeing with RevStream? What can you do then that you couldn’t do six months ago?
Amit: I think we talked about productivity and scale, but I think the other benefit of using RevStream is spending less time questioning data and fixing data and more time supporting the business. In the past, if you were a business unit leader responsible for a $150M product line, you were asked to do sales forecasts, bookings forecasts, and revenue forecasts which was basically like throwing darts because you didn’t have a system to support that kind of reporting. You were forced to do data gymnastics. With RevStream, those same folks will be empowered with better analytics so they can support the business units and add business value. That level of analysis is where the value happens for the business units and for the offices of the CFO and CIO.
Sarah: Thank you so much, Amit!