Pilatos: We utilize a shared-services structure. These shared-services departments will deliver service to any P&L business unit which has sold services to a client that requires that shared service's specific expertise. When a solution is being delivered to a client, our P&L units can quickly buy services, as required, from the shared-service centers. For example, we have software implementation services; systems integration shared services; and infrastructure shared services, which comprises data center, help desk, etc. These departments sell their services at cost to our various P&Ls, which deliver the work to the client. The P&Ls determine the billing rate for those acquired services based on market demand, blended-shore delivery mix, and other relevant points.

BPM: How does budgeting and planning work in this environment?

Pilatos: It's not a zero-based budget; we typically go off our prior-period trends, our backlog, and our visible pipeline opportunities. Each business unit can plan the way they need to, so there's a great deal of flexibility within the process. Each business tends to do things a little bit differently. But in general, we will set our revenue targets as the out-of-the-gate exercise. From there, we will determine what resources we require, how much staffing we will need, etc. From there, we'll plan our selling, general, and administrative expenses.

BPM: Does the information about the revenue targets and staffing come from the business unit managers?

Pilatos: There is a lot of collaboration in our process. It's not five people that are doing this, but rather dozens of different people involved in this process, particularly setting the revenue targets. The business units have a lot of say in how much revenue they're going to target. As the director of planning, I become the devil's advocate, either pushing more aggressively or pulling things back as initial budgets come in from the field.

In a project business, you only have a couple of metrics that you want to follow: You've got your head count; you've got your utilization of your resources, and then how much you can bill those resources for. Those are the keys. Once you come up with a revenue number, you know based on those other metrics how many people you're going to need. In the outsourcing business, we look at our pipeline of opportunities, we look closely at the cost structures of our current accounts and continue pushing hard at improving profitability with the combination of our on-site, off-site, and offshore delivery model.

BPM: What software do you use to support the budgeting process?

Pilatos: We have a planning system now that is a simple, Excel-based tool produced by a small firm in the Pacific Northwest. It has met our needs for a couple years, but as our business grew in size and complexity, we needed a more robust tool. Because we require a lot of interdependency between departments, we needed new software that would allow those departments to communicate with each other during the planning process. That was the single largest driver for the Cartesis purchase.

BPM: Can you give me an example of a way in which your BPM software needs to support collaboration?

Pilatos: There are several ways, actually, but I'll offer an example: We use a number of allocations in our business to ensure each business unit P&L includes all operating costs. For example, we perform allocations of overhead, infrastructure, and administration. These are corporate services that the P&Ls are buying, so we want that cost charged back based on usage. During the planning process, we have to understand how much service they intend on buying.

So, how do we get those departments to communicate? Right now, we're using a lot of spreadsheets that get e-mailed around. Let's say, for example, our recruiting organization sends out a spreadsheet and says, "Here is the expected cost to be budgeted, by department, based on what we think we're going to have to recruit." What happens if, during the process, things change? They have to update that spreadsheet, they have to e-mail it back out, and then we have to go in and touch all the affected departments. That's quite a bit of change, and without a doubt there's a lot of room for error. What happens if somebody forgets to update a couple of those departments -- or, worse, the entire updated allocation just gets missed? When processes are manual, there's too much room for error, and the administrative cost becomes prohibitive.

Once we've rolled out Cartesis Magnitude, our departments will have the ability to automatically communicate with each other. Using the previous example, the recruiting allocation is going to be what we would consider a department, or a "package." We will enter the allocation data in that package and push the information out to all those departments buying the service. When department owners open their package, the allocation is present for their review. Further, anytime a change is made, it's going to be pushed back to those departments so nothing gets lost in the shuffle. We'll also have dramatically reduced the reconciliation process between those departments because we'll always know it's getting allocated in the right spot. Having a more robust BPM software system will help us facilitate this entire process.

BPM: How do results get reported in your current BPM process?

Pilatos: We have a set of management reports that we distribute regularly -- usually weekly or monthly. Those are typically at the corporate level, and then beneath that, we'll have a little bit more flexibility, depending on the business line. Maybe one business unit wants something a little bit different than the other to support their particular business model. For example, key performance metrics for outsourcing can be different than those for project services or software sales.

BPM: Do you go further than that to analyze the data?

Pilatos: We heavily rely on Empire TIME. That is our major database. That's where project information is captured, and it's where all of our associates charge time against projects. Each project has a set of attributes, and we can slice and dice revenue or cost based on those attributes. Since ET acts as a subledger, some of this data eventually gets interfaced into the general ledger. We then combine information from ET and the general ledger in Siebel for analytical purposes. Then we can slice, dice, cut, paste, and view the information any way we want.

BPM: Have you had any problems with using so many different software systems for your BPM processes?

Pilatos: No. Of course, there is the added complexity of integrating different systems, but we have strong controls, procedures, and processes to ensure our systems are tightly linked.

BPM: Do you have any advice for another company that's still operating with a whole bunch of spreadsheets?

Pilatos: I would say get out there and look at some of the new systems that exist. A lot of them allow you to continue doing some of the modeling that you've been doing in spreadsheets, but in a Web environment, and they're not as cost-prohibitive as they used to be. Your overall process can be simplified with more control, improved accuracy, and less cost.