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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: lebo who wrote (3476)	11/5/1998 6:49:00 PM
From: John Carragher	Respond to of 4509

Lifted from a column in fools on tlab note reference to delay in collection due to SAP Okay, back to the issue at hand. I learned that there were three primary reasons for the slowdown in the collection of accounts receivable. The first relates to the significant problems Tellabs has had since it converted its accounting systems to SAP AG's (NYSE: SAP) software in October 1997. It seems as if SAP can't issue bills that Tellabs clients can understand. The problem with the bills is a result of the complexity of the work that Tellabs does for its customers as products manufactured by Tellabs generally account for only about 8% of Tellabs' revenues. The rest relates to configurable software and other special work done during the installation process. Needless to say the company is quite disappointed with SAP -- Mr. Johnson's actual comment was a bit stronger than that, but he asked that it not be quoted. The problems with the bills generated by SAP's software is that they result in a delay in payment to Tellabs. The company has tried to fix the problem, but the number of consultants in the U.S. that can reconfigure SAP the way that Tellabs needs it done is extremely limited. It is hoped that this problem will be alleviated when SAP comes out with its next software upgrade -- it's due in another three to six months. In the meantime the company is continuing its efforts to improve in this area. Its goal is to bring unpaid accounts receivable down by half by year-end. That sounds like an admirable goal. This Fool certainly hopes that it is met. The second reason given for the slowdown in collection is that Tellabs is making more sales in regions like Africa and the Middle East. Since it takes longer to deliver products to these regions, Tellabs often grants longer