Case in Point: The Data Is the Data
Casella Waste Systems, which employs 2,500 people in 90 facilities across the eastern United States, implemented business performance management (BPM) software four years ago to make budgeting more manageable. Now, says Chris Scherer, director of forecasting, budgeting, and operations support, budget data is current and reliable companywide.
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BPM Magazine: Please describe your budgeting and forecasting processes.
Chris Scherer: We have approximately 80 profit and cost centers that have their own budgets. The budgets are developed by both business managers and accountants. Some are very granular. For example, we do a lot of recycling processing. Inbound materials on one truck might become anywhere from five to 10 different outbound commodities, so we try to determine what the mix of the inbound materials is going to be so we can determine what the yield is going to be. That gets fairly detailed.
BPM: And you implemented a BPM system to streamline the process?
Scherer: Yes. When we used spreadsheets for budgeting, our process was similar to what we're doing now. The difference was that at the end of the process, we always had to get the budgets out of the Excel spreadsheets and into JD Edwards, which we used to do most of our reporting. Even after moving the data, we might get changes in insurance rates, or senior management might want to go back and revisit the numbers one more time. Our users would get delinked from the budget process because we wouldn't let them reload information out of their spreadsheets.
Before, if we wanted to make a change, we had to literally send all budget users a new file or Visual Basic macro fixes to update the Excel program. Now we can press a button and users get a message saying, "You need to go back and log into the system because we've made changes." We're self-insured, so actuaries are looking at our insurance claims rates up till the very last second. The BPM system makes it easy for us to make quick changes. If we're doing an increase to add 5 percent to insurance costs across the board, I can go in and hit everybody's insurance accounts within five or 10 minutes and update the entire company. Which is pretty powerful. And then right after it's done, I can roll it up again.
BPM: Do you do much in the way of what-if analytics over the course of the year?
Scherer: We don't do a lot of that in Khalix yet, but we do a lot of what-ifs outside of it. Our landfill businesses typically have permit limits -- daily, quarterly, or annual -- so that they're allowed to bring in a limited number of tons. We're always trying to figure out how to get the optimal revenue over the tons we have left when permits are about to expire. We might ask, "If we bring materials from here, as opposed to there, can we make more money?"
BPM: How can a company determine whether BPM software is worth the investment?
Scherer: The answer lies in how much time you want to spend doing things and how quickly you want to be able to rely on the information. When you do things in Excel and there are changes, you have to go back and chase through 50 sets of changes to add things up. Every time we made a change in the past, it could take us three to four hours to go through and tie the numbers out. Now we're very comfortable that when the changes are made, the values represented are correct. And everyone's always looking at the same thing; there's no question that the data is the data. There's one source. That's the most important thing to us.
