BPM: How does your management reporting process work; how do you compare actuals to your budgets?

Wegener: From the time we signed with Host until we had our own people start to input budget numbers was just a little over two months. It was a huge stretch. Because we did that, we didn’t take the normal implementation path. So except for sales and some of our departmental expenses, we are still doing most of the comparisons of actuals to budget at a high level in Excel. At a lower level, within the sales module and within the expense module, we have loaded the current year actuals with some prior-year information. Managing those comparisons in Excel is a real challenge, but at a high level we didn’t have enough time to get all the pieces in and get everything set up.

Feldman: We prioritized which pieces of our budgeting process we wanted to be in Host and which ones we could deal with, for this budgeting cycle, still being outside. So we did the ones that we thought were the most critical for right now — for our current budget — and now we’re finishing the implementation for some of the pieces that we left out previously.

BPM: Do you feel you’ve benefited by running a BPM suite through a hosted service, rather than on premises?

Wegener: Yes. One of our criteria in selecting budgeting software was to choose a SaaS [software-as-a-service] solution. If we had not chosen a SaaS solution, we wouldn’t have gotten up and running in anywhere near enough time to get this year’s budget cycle in the system. So the time to getting major returns was shortcutted big time. A second reason we went with a SaaS provider is that our internal IT organization is preparing for a transition to a new ERP package. Our CIO had a major concern about diversion of resources and time and attention to assist with implementation if we chose a non-SaaS performance management solution. It seemed to make perfect sense to us — since the ERP project is going to be consuming resources for two, three, four years — that we should go with a SaaS solution.

BPM: Have you seen any other benefits to the SaaS model?

Feldman: We were able to get deeper participation in the budgeting process, not only because of how we designed the budgeting tool, but also because of the fact that it’s a Web-based tool. We’ve got salespeople traveling all the time all over the country. The fact that they can just go on the Web and don’t even need to connect through our internal system, that’s an advantage.

Wegener: One other advantage is that instead of the traditional software implementation, where you’ve got a consultant that is in and out of the project based on schedules and time, Host’s people have been available to us whenever we’ve needed them. They’re there to service us on the phone. Joel, in particular, had many nights and early mornings where he was on the phone with the guys back in India. There was availability in the Indian office to work with us on our schedule, as opposed to the typical software implementation where the client has to work on the consultant’s schedule.

BPM: What would you say you’ve learned through the process of buying and then getting up to speed on performance management software?

Wegener: I probably will get into some preconceived notions and biases here, but it seems to me that the bells and the whistles of a lot of the more established budgeting packages add complexity in terms of time to implement and in terms of users being able to pick them up and go. Host is still new enough that it is less complex, but it is more flexible than I would have imagined going into it.

BPM: And you don’t feel that you missed much by forgoing the bells and whistles that some of the other software has?

Wegener: We are so far away from being able to pull a bell or a whistle right now; I think it’ll be another three years before we’ll start wishing we had more bells and whistles.

Feldman: There are plenty of things at Host that we’re not utilizing as fully as we could, so there’s plenty for us to continue to work on. I think a lot of times people bite off more than they can chew. So we tried to stay very prioritized about which parts of the application we want to use for now, and we’ll continue to expand that.

BPM: What would you say to a finance person whose company is still using only Excel for budgeting and planning?

Wegener: If they’re not having a major problem with their budgeting process, they ought to stay where they are. But if they’re having major challenges, like we were, they need to move right away. We delayed. I’ve been with Otis for four years, and I wish I had done it the first year I got here. I have too many gray hairs from those three years. We had too many problems, and we have too much business complexity, to be able to budget properly using Excel.

Feldman: If you think about the way we manage our business, we want to be able to slice and dice our information by product, by customer, by channel, by delivery method. Excel can’t do that, certainly not easily. It sounds really simple, but just having a reliable data repository is a big deal.

Wegener: I can’t stress enough that we were having major challenges doing budgeting in Excel. If we’d implemented a performance management solution three years ago, it would have saved the company a lot of money, and it would have improved our business results over those years.

BPM: How, exactly, would an improved process have improved business results?

Wegener: We were guessing at what the manufacturing requirement was. Sometimes we would add shifts when we didn’t need to add shifts. Other times, we would be too late adding shifts. We incurred a lot of overtime and extra transportation for expedited delivery because the manufacturing division didn’t have a connection to what the sales organization was thinking in terms of what needed to be available for customers. The lack of a connection between the forecasting process and the manufacturing, staffing, planning, and capacity processes cost us quite a bit of money over the last few years.