BPM: Once the forecast becomes reality, how do you report on the actual results?

Hogan: We have commitments for charging patterns, again by person, for how much they're going to charge. We track that all year long. For the individuals, there's a commitment for how their charging pattern will go over the course of the year. And then we review that on a monthly basis. The closest equivalent that you would see out in industry is billable hours by, say, an accounting firm. An accounting firm has an expectation that they're going to have 1,800 billable hours for a person. Well, we have an expectation that our employees will have direct chargeable hours of, say, 1,800 in a year. They have to hit that onto a given project. That ensures that our company is charging correctly in terms of government accounting requirements and also that it's operating in a healthy fashion.

Previously we tried to do this at a departmental level. But it was too difficult for us to track performance information using spreadsheets at the individual level, roll it up, and go back down into projects. With CONTROL, it's much quicker.

BPM: So do you monitor performance of actuals against forecast throughout the organization?

Hogan: Very much so. We took the information that we developed in our forecast, and we taught our Make-To-Order system to produce a similar report on our actuals. And so every week we publish efficiency factors for our organization.

BPM: Are there efficiency factors other than the allocation of people's time?

Hogan: Sure. The reports include other expenses and other metrics.

BPM: Are there any tangible benefits of your ability to track resource consumption this closely on a regular basis?

Hogan: Absolutely. Each month, we are now able to do what used to be an annual operating plan because now the operating plan only takes us half a day to do. Using our forecasting tool, we can drill from tens of millions of dollars into a six-cent washer if we have to. We truly have the ability to see at an instant what's happening in our business. Previously, it would take us two weeks to develop that data. Now we review our actual results at that level of detail on the third day of the month, diagnose the root cause, and gain insight into the options. We can iteratively model alternatives, put a new forecast in place, and continuously adapt.

BPM: When you reforecast on a monthly basis, does that process also include negotiations from the top down and bottom up?

Hogan: Very much so. When we go through our process of reviewing how our expenses are rolling out, if somebody has exceeded their expense forecast, they know on the third day of the month that they're "busted." They're out of money, and they have to take something out of another portion of their forecast to cover the short. Having that immediate knowledge that you've missed is very important because that's how you start the recovery.

BPM: What has the reaction been from the managers who are being monitored?

Hogan: People don't like confusion. Before, they had to wait two weeks for an answer. Now the answer is right there, and they can make a corrective course right away. They know what they're dealing with. Once you know what you're dealing with, you can come up with a solution. So it's comforting to them to be able to see where they're going and what's happening.

And it cuts both ways. I'm in finance. Any errors that are in the financial system for how something is booked are also seen immediately. Operations managers will say, "Hey, you booked that against my department. That doesn't belong to me!" Things of that nature show up. It's an environment where there are no more secrets. Everyone sees instantly what's happened.

BPM: What have you learned that might help other companies implement BPM software most effectively?

Hogan: If you implement bad methodologies in a forecasting tool, it'll just run faster. It'll still be a bad methodology. That's something I'm sure that your readers know. They should spend time making sure that their processes are set up correctly.

If you have a bad process, software won't help you. But if you have good budgeting and forecasting processes, BPM software can make them much more efficient.