Citizens Banking Corp. is a holding company of banks in Michigan, Wisconsin, and Iowa. The organization, with total assets of $7.8 billion and 183 bank branches, uses a single suite of integrated products for its general ledger, fixed assets, and accounts payable. Three years ago, the company did not conduct reforecasts because its process was cumbersome. Its financial management needs were too complex for its outdated budgeting, forecasting, and reporting processes, so the bank implemented a business performance management (BPM) system and dedicated several finance staff members to serve as liaisons with line-of-business managers. In doing so, it improved both efficiency and response time and gained a competitive advantage.

BPM Magazine: How does the finance department stay on top of forecasting and budgeting processes in an organization with as many geographically dispersed branches as Citizens Bank has?

Sandy King: We have dedicated line-of-business liaisons within the financial management team. These finance people work with their line-of-business partner to develop our balance sheet projections, with the associated interest income and interest expense, as well as the noninterest income, noninterest expense, and staffing projections.

BPM: So these finance people provide insight from the financial perspective when working with the line-of-business managers to develop budgets and forecasts?

King: Correct. They're dedicated financial liaisons, so they're not only providing financial support in terms of that line of business, but also coordinating that division's goals with our corporate objectives. They see both. They know the down-and-dirty details of their specific line of business, but then they also see all of the lines of business from a high-level -- call it 5,000 foot -- perspective. It helps us ensure that we've got a coordinated game plan.

BPM: How many line-of-business liaisons do you have in the finance department?

King: Nine.

BPM: What is the dynamic in the forecasting process between the line-of-business managers and their finance liaisons?

King: We ask our financial liaisons to walk the razor's edge and not only provide their line-of-business partner the financial guidance, but also challenge them to improve their profitability. So there is some amount of negotiation, if you will, on the key assumptions between the dedicated finance partner and the line-of-business manager.

BPM:

What is the budgeting process like once the line-of-business manager and his or her finance liaison have agreed on the numbers?

Linda Lorenz: The financial liaison enters the budget and forecast data into the Cartesis solution, which has the ability to consolidate all the budgets and forecasts from across the company.

King: Then, once the finance team sees everyone's plans and how they consolidate up at a corporate level, we may make additional decisions that could change the line-of-business budget to align with our corporate goal.

BPM: How often do you go through this process?

King: We do a very high-level forecast on a monthly basis, and then we do more of a moderate-level to detailed-level forecast on a quarterly basis. And we have annual budgets, as well.

BPM: How have the line-of-business managers reacted to having dedicated finance liaisons?

King: The response from our line-of-business managers has been very positive. Now they have a single point of contact for their financial questions. And they have a financial partner who really understands the key drivers of their line of business. So they don't have to re-explain their assumptions or their base volumes each time we do a forecast.