Volatile currency markets and a blindness to some exposures were taking some nasty swipes at the income of $1.3 billion ADC, a Minneapolis telecommunications equipment company, in late 2008.

"We believed that we were doing the best that we could with our existing tools and resources," reports Jason Cohen, vice president and treasurer, "but as the market became more volatile we knew there were exposures on our books that we weren't finding or hedging. We have 3,000 [general ledger] accounts, and the only way we could have found those exposures with our old system would have been to go through all those accounts one by one. We didn't know exactly what we were missing as the environment turned more uncertain, but we knew we were not satisfied with the results." About 40% of ADC's business is international and it has exposure to approximately 60 different currency pairs.

So ADC turned to technology and last April started using FiREapps software to find all the accounts buried in the company's SAP accounting system subject to revaluation with currency changes and report them frequently. Once FiREapps reported the full exposure, Cohen discovered that "we had been missing about 30% of our exposures each month. And with a total exposure of $50 million to $60 million, that meant we were missing about $17 million of exposures when we did our hedging." That explained why ADC's net income had sometimes taken a revaluation hit. With greatly improved visibility into exposures, "we were able to improve the effectiveness of our hedging substantially, and we couldn't have done it without the new system," he says.

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