SRC Software: On the ButtonBy Joshua Weinberger | Posted 2003-11-01 Print
Accounting for SRC Software's impact.
SRC may be helping companies such as New Balance Athletic Shoe gaze into the future. But most of SRC's prospective customers are just trying to get a handle on the 19-year-old company's past, and how it got where it is today.
The company was founded by two former accountants who set out to provide financial-planning software to healthcare and financial-services firms. Now, the Portland, Ore., company supplies 'integrated' software that reduces errors and speeds up the budgeting process.
"We used to take five or six runs at our budget; last year [using SRC], we did it in two," says John Westwood, senior vice president and controller at Bancorp Rhode Island.
Cable programmer C-SPAN is "a pretty mature organization, and our revenues are pretty well known," says vice president of finance Jana Fay. "But SRC has helped us pull our budgeting act together."
Before deploying SRC's software, her budget process started in November and lasted officially until Marchbut she was often "still fixing things in April and into May."
"With SRC, C-SPAN's first budget was ready on time, and Fay expects "to get the bulk of this budgeting cycle done in about a month."
SRC, a privately held firm, said it recorded revenues of less than $15 million last yearbarely a speck in the "performance-management" field where Hyperion Solutions and Cognos also play. Even though it claims to have 2,000 customers and to retain 95% of them from year to year, SRC sales representatives continually struggle to convince multinational corporations to entrust their budgeting to a relatively small player.
"That's the biggest obstacle we face," says Alan Cline, SRC's vice president of marketing. "When we lose to Hyperion or Cognos, almost without exception, it's simply because they're bigger companies."
To assuage those fears, SRC executives must doggedly outline the company's financial position to prospective clients. For one thing, customers "need to know we're going to be around for a long time," Cline says. "In some ways, that's as important as showing them that our software is right for their business needs."
Still, SRC's devotion to privacy can get in its way. For instance, SRC says it's been profitable every year of its existence. But it doesn't back up the assertion with numbers. And these are accountants.
At least you're not buying hype, customers say. When C-SPAN was in its evaluation process, "Other [vendors] wanted to show glitzy reportsthe things that work great in the Fortune 100 companies," says Fay. From SRC, she got substance instead. "SRC didn't have any marketing material back thenthey sent screen shots and we talked a lot,'' she says. That made her "feel very comfortable with the people there."
Jim Kerlin, controller at industrial manufacturer New Pig, had a similar experience. Other vendors "were inclined to do their dazzling routine [of] prepackaged two-hour PowerPoint presentationsand we were trying to get an answer to a specific question," he says. "SRC's rep was willing to listen to us, and had experience in the industrial environment."
Users' affection can be traced back to the software's simplicity. "The whole idea of SRC is that it's a spreadsheet front end to a database back end," says Kerlin. Fay adds that "it takes a person who's very comfortable with Excel, [but] if you know Excel, it's easier than some of the other products out there."
At Blethen Maine Newspapers, chief financial officer Ken Kraft's old way of budgeting on Excel sheets was torturous and time-consuming. "Anytime you made a change, it was a labor-intensive process," he says. "But with SRC, you just hit a button, and it changes everything."
Finding supporting information is also fairly easy. Fay says she "can figure out what's going out from month-to-month and year-to-year. I like to drill down to the transaction level, to see what's driving costs."
Microsoft's budgeting tool isn't as flexible, says Fay. C-SPAN uses Microsoft's Great Plains accounting software, and Fay says SRC "integrates with it very nicely."
For financial types, the simplicity of SRC means self-sufficiency. "I'm an accountant, not a systems professional," says New Pig's Kerlin. "It takes very little I.T. support to install this system and keep it running. I don't need an I.T. person devoted to keeping SRC going."
"We used to burn the midnight oil in Accounting doing our budgets," Kraft says. "With SRC, that's all gone away."
That's a line item anyone can approve.
SRC aims to minimize the trauma of moving from paper or Excel spreadsheets to sophisticated financial planning that employs relevant data from across a company.
Ironically, its tool is an Excel "front end." Users enter and massage data in the familiar format of the most widely installed electronic spreadsheet.
Other vendors' software can pull data out of Excel sheets, as well. SRC's difference: Its software is built to work as part of Excel itself. When a user clicks on the SRC application icon, both Excel and the SRC software start up.
SRC then performs as if it were an add-on to Excel, providing a series of navigation buttons and popup menus on the left side of the screen. These allow managers to use particular SRC functions, such as its "Standard Budget Methodologies,'' or SBMs, while still employing Excel's own features.
Instead of forcing a user to manually enter the various line items and formulae of an SBM such as "New Product Development Costs," a single command by that name already "knows" which line items to add from the database, and which formulae to apply.
In Excel, changes often have to be repeated manually on a series of forms and templates. SRC, instead, transfers data to and from a database kept on a standard SQL server. It's the database that stores the changes, not the spreadsheet.
Headquarters: 13190 SW 68th Pkwy., Portland, OR 97223
Phone: (800) 544-3477
Ticker: Private, 70% owned by Vista Equity Partners
Business: Provides financial-planning software
Founders: Chief financial officer Philip Sandstrom; chief technology officer Stephen D. Reiffthe "S" and the "R" in the company name
Financials: Estimated revenues of $14.4M in 2002
Products: Three sets of performance-management software. Key modules include SRC Budgeting, SRC Payroll Planning, SRC Forecasting, and SRC Productivity Management
Market Share: SRC's 2002 revenue represented 1% of ARC Advisory Group's estimate for the Worldwide Enterprise Performance Management Analytics Applications Market ($1.44B)
Competitors: Business Objects, Hyperion Solutions, Cognos
Project: Cable programmer selected SRC in late 1999 for budgeting, and picked up Information Advisor soon after. Long-term forecasting is left to the parent organization.
Blethen Maine Newspapers
Project: Regional newspaper company bought SRC's budgeting and reporting modules in 2000, and set them up to handle zero-based accounting.
Project: Pennsylvania-based industrial manufacturer was won over by SRC's financial-reporting module in February 2000, and soon after took on the budgeting software as well.
Bancorp Rhode Island
(401) 456-5015 x1646
Project: The seven-year-old regional bank has installed SRC for payroll budgeting, reporting, and analytics. Individuals use Citrix terminals to access the database.
Amerisure Mutual Insurance
Corporate Budget & Planning Mgr.
Project: Insurance firm selected SRC in 2000, over three other firmsnot only was SRC's the lowest bid, but the most impressive.
Baptist Health Care Corp.
Corporate Budget Director
Project: A 13-year SRC customer, the Florida medical-facility operator was a Lotus-based shopand has just begun segueing to the latest versions.
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