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Netwex successfully implements Revenue Recognition Solution for Calix
Category: Case Studies, Events, News | Wednesday, October 6th, 2010
January 18, 2010
Netwex successfully implements Revenue Recognition Solution for Calix
The Largest Communications Equipment Supplier Focused Solely on Access.
Several hundred-service providers operating tens of millions of access lines depend on Calix to power their access networks. Industry-leading solutions deployable throughout the access network enable a rich set of information, communication, and entertainment services over any combination of fiber and coppers, thus helping Calix customers gain a competitive edge.
Business Challenge:
Calix offers a wide variety of membership products to its customers, each with its own terms and duration. This presented a unique revenue recognition challenge. Calix Finance Group found itself in the position of having to manually calculate revenue recognition each month for each product they sell. Given the manual nature of the process, the Finance group had to restrict the number of products that could be offered, significantly limiting the potential of the company to grow new revenue streams. To resolve this issue, the Finance group wanted an automated revenue recognition system, which would meet increasingly stringent financial system auditing requirements while not limiting Calix’s flexibility to provide their customer base with a variety of membership products.
“Working with Netwex Systems was a positive experience. They were professional, committed, disciplined, and able to keep their eye on the big picture while enmeshed in the details. They delivered real business value to our organization on-time and on-budget. I’d be pleased to engage them again.” Phuc Tran Finance Controller, Calix, Inc.
Requirements:
- Implement FAS 97-2 Accounting requirement
- A report that reflects the value of deferred revenue and deferred COGS.
- Process to defer all service revenue and recognize revenue on the usage based.
Solution:
After reviewing and rejecting a variety of packaged software solutions, Calix determined that a custom-built system was the most cost-effective and efficient approach to meet their needs. With limited resources available in-house, Calix was interested in working with an outside vendor to deliver this system. However, negative experiences with other consulting companies left IT leadership cautious of open-ended relationships. They wanted a true development partner who would shoulder some of the risk and commit to a set cost and timeframe. In addition, Calix did not want to outsource all the system knowledge and become dependent on an outside firm for maintenance and upgrades to the system. Our end result was to give Calix a single source of “clean” revenue data while implementin business intelligence solutions for analyzing revenue.
Netwex Systems responded with a fixed price proposal to develop Calix’s revenue recognition system with an integrated team of Netwex and Calix team members. Using Netwex’s project delivery approach, the team worked closely with the Finance group and with internal IT personnel to define, iteratively develop, and deploy a system to manage complex cash and revenue transactions.
Result:
Working together, Netwex and Calix developed a flexible but rigorous solution to Calix’s revenue recognition challenge. The system was designed and delivered in four months, meeting both cost and schedule targets. The Calix Finance group now has an automated way to view, drill-down on, and summarize cost and revenue transactions, saving hours of manual labor and significantly increasing the accuracy of their data. Having this system on the back-end now enables the Calix Sales team to develop, test, and implement a virtually unlimited number of price points, terms, and feature subscription bundles.
