BPM: What data would cost-center managers enter in a template? Could you give an example?

Anderson: One of the easier examples would be consulting because that's a case where there are potentially different methodologies behind how you construct the drivers, based on the type of engagement. When they click on the hyperlink that takes them to the consulting driver-based schedules, they see a few tabs across the bottom, just like worksheet tabs in Excel, that can take them to different methodologies. For example, the first tab might be time and materials and the second tab might be fixed bid, and the third tab might just be a generic list of items.

What we're trying to do is really encourage people to think about the cost drivers behind these engagements. So if they go to the time-and-materials tab, instead of entering straight dollars, they'll be asked to enter in the consultant's hourly rate and the number of hours in each month that they forecast using this particular consultant. For each line item they can also enter in all their comments, assumptions, and annotations. Then, say they have another contractor who gets paid based on a fixed-bid type contract. They could click on the next tab and enter in a $50,000 engagement that starts in June and ends in December. The tool will just spread those dollars among those months. When they then click to go back to the master budget schedule, it's going to sum each of the engagements, using all of those different methodologies, and bring them back to a total cost number for consulting.

BPM: Would a cost-center manager be able to go in and enter multiple time-and-materials consulting engagements? How customizable is it for the budget managers?

Anderson: Yes. Currently they can enter up to 50 line items on each template, so they could have 15 time-and-materials-based engagements and 11 fixed bids. It's all compiled and stored in Applix. We have not made the templates customizable to the end user. We tried to build some structure around the calculations to keep consistent calculations across the company.

BPM: What kind of feedback have you gotten from your cost-center managers on this process?

Anderson: As you can imagine, it was a little bit mixed. One of the reasons we went to this system is that we in finance really wanted to enforce driver-based planning methodologies across the company. So for the 80-plus percent of the departments who were already creating their plans using these types of methodologies in Excel, they were generally very pleased with the new tool. They didn't have to worry about building their own models and templates.

The pockets of the company that weren't using driver-based planning, and instead were used to just taking their prior year number and adding 2 or 3 percent, well, they weren't too pleased with it initially. But even some of those people have since come back and said, "It was a pain to go through the process, to make us think about all these expenses, but now that we have it, it's very beneficial. We can go back through our projections and understand what we were assuming and why, and we can now be more agile in terms of moving dollars around, repurposing surpluses, and so forth."

BPM: Could you give an example of a situation where it has made a division more agile?

Anderson: Our programming area benefits from it a lot. We're in such an increasingly competitive environment that our strategies are modified year to year, and things come up each year that might not have been as prominent on our radar the previous year. This year is a tremendous example because we have some enormous initiatives that were just forming on our radar before, such as being able to broadcast in high definition. And so this year, we're building a new studio and overhauling our broadcast infrastructure in order to support HD programming. Because of that, we're having to shift our spending priorities, so as not to significantly compromise our profitability in a single year.

It's critical for us to be able to easily isolate areas of opportunity in expense. In the case of our programming group, a significant amount of expense, such as travel, is tied to severe weather activity. With the driver-based plan, we can gauge what level of storm coverage we had initially funded. If we expect actual circumstances to differ, or if we think we can cover the weather in a more efficient manner, the system allows us to easily adjust drivers such as the number of trips or the number of field crews covering storms. It also lets us better communicate our assumptions to senior management so that everyone shares the vision of how often, and how extensively, we'll deploy our resources.

BPM: How did you deal with the cultural issues of implementing this system? How did you overcome resistance to driver-based planning?

Anderson: I think the biggest thing we did was to really try to make the tool as simple and as familiar as possible to use, which we did in a couple of ways. One was by using the Web as our end-user interface. We also did it by severely restricting some of the ways they could navigate through the program. The initial master template is just their accounts and the months, and that is very familiar to people. So then they just click on the account, go to a detailed schedule and fill it out, and go back to the main schedule. We felt that was a workflow that was easy for them to pick up. No one gets lost navigating through layers of complicated schedules.

BPM: Were there any people who just wanted to enter costs in an itemized list, rather than using the drivers? Has that been a challenge?

Anderson: It definitely has, and we knew that was a battle we weren't going to win 100 percent of overnight. It's going to be an iterative process for a couple of pockets of the company, but at least they know where we're headed in terms of requirements. What we're finding is that even if they complete 25 percent of their plans as an itemized list, they might still be keeping other supporting detailed schedules elsewhere. Some of them are now realizing that it makes more sense to just keep all of their data in Applix, instead of the detail in a separate place.

BPM: What are some of the benefits that finance and the company overall have seen from having so much detail on the final budget?

Anderson: The biggest one is the overarching idea of developing a lot of cause-and-effect relationships that allow us to understand what the cost drivers are in the company. Before, even if people were building driver-based plans, they had all their assumptions hidden in their own Excel models that no one ever saw. It didn't allow the company overall to be nearly as agile when, say, we were looking for cost savings opportunities to fund emerging initiatives. It was much harder to even know where to start. You had to go talk to a lot of different people, who would have to check their budget models and get back to you. It was a case where having such a decentralized planning process and a lack of an efficient tool exacerbated problems with visibility into the drivers of our company.

BPM: Would you say that line managers are now doing more analysis of their costs and revenues? Or are they more able to focus on business in general?

Anderson: I think both. Not having to do some of the mundane financial activities, like building Excel models -- which they might not have been very skilled at to begin with -- obviously helps them focus more on their day-to-day jobs. We're just starting to roll out the other end of the continuum, which is the reporting side of Applix. We're also starting to give the line managers a lot of tools, such as interactive Web reports that they can drill down into and see their actual and budget drivers. In the end we hope to empower our line managers by giving them relevant and on-demand information that allows them to be efficient and to make the most informed business decisions.

I think many people would be surprised how significantly you can transform your financial planning and reporting activities with the right tool. We've done a tremendous amount with Applix and OLAPObjects in a short time frame, and with very little assistance from outside consultants or even from our own IT department. This is a system that we own in finance.