BPM: How has the ability to do these allocations and simplify the planning process benefited Trustmark?

Schuster: I look at it this way: We have to couple it with how we now manage the business and do our monthly business reviews. The monthly business review process was implemented eight or nine years ago, and since that time the profitability of our company has been at all-time record highs. We are nearly 100 years old. We were formed as an insurance company for railroad employees in 1913, and through all of the 1900s we did reasonably okay, but since then we have been generating profits that have been two and three times higher than any generated prior. And this is because we are actually managing the business much more effectively.

The toolset helps you with the efficiency element, but you have to couple it with the change in how you manage your business to make it effective. You can generate all kinds of numbers, but if you don't apply them to making better decisions and managing the business better, you're not getting the effectiveness of that information. So ours wasn't solely an issue of number-gathering; the goal was to couple it with efficiency and effectiveness -- to do the right things and to do those things right.

BPM: What are some improvements in effectiveness that you've seen?

Schuster: Clearly, there's a much better understanding of what drives our business. We are able to implement levels of driver-based analysis that we couldn't have done in Excel. The allocation process is also much more understandable.

We actually added in customer profitability analysis using our Longview solution. We found wide variation in the financial performance of some of customer relationships. We were doing well with some and poorly with others. We now are definitely better able to understand what makes us profitable and what doesn't, and how to manage this. We've actually increased our profitability by shrinking, because it turned out that we were losing money on certain things we were doing, and we didn't fully understand this.

BPM: So you sort of fired some customers?

Schuster: We didn't renew them.

BPM: Do you have a process for evaluating how effective the drivers that you use in your planning process are? Do you have a way of ensuring that you have the right drivers?

Schuster: We've been doing it now long enough that we can start to say, "Well, does this driver as a predictor reasonably predict what happens?" Reality is the ultimate validator of your drivers and assumptions, so we are continuously looking at that. Even though, as I said, we don't spend a lot of time reviewing what happened, we do review the actuals for that very reason. If we assume one thing and the actuals come in radically different, then the question is: What went wrong here? Do we have the wrong drivers, or did we make bad assumptions about the drivers? We don't just pull a number out of the air; we actually go back through each element of it and say, "Okay, this is driven by this, which is driven by this, which is driven by that. If something is radically different, which one of them was the cause? Is it radically different, or is it more a case of each one being off 20 percent, and they compounded?"

And this is part of understanding how to predict. As our CEO says, "Your predictions will never be perfect -- the question is: Are your forecasts and plans reasonably able to predict future business results? And the only way you can be good at this is if you truly know how the business works at a very detailed level."

BPM: So does finance lead the charge in going back and looking at which drivers might have gone wrong?

Schuster: No, actually that's done in the business review process. The real scrutiny is done collectively.

BPM: Do you have any anecdotes of the benefits?

Schuster: When I put forth the proposal to implement this system, the argument that I made was not that it was going to save us millions of dollars in costs directly, because over the years I've learned that a lot of the time the cost-reduction justification for IT solutions just doesn't happen. So I wasn't even attempting to go down that road.

The real value here is twofold: One, to truly better understand and manage the business, and given our financial results, it's clear that we are doing that. Two, to avoid adding additional cost to do the detailed analysis and projections that we are now doing. Without the system, it would have been impossible or nearly impossible. Of course, nothing is really impossible -- it all depends on how much you want to throw at it -- but it would have been cost prohibitive. We would have had to throw dozens and dozens of bodies at the solution if we'd tried to continue to do it in the Excel world, and the corresponding results would not have been as good.

Plus, by the way, given the current environment, it wouldn't comply. We do our allocations now in Longview, consolidations in Longview, we do all of these things within this toolset, and as I said previously, it is now our official book of record. If you know Sarbanes-Oxley, you know that Excel is not considered an acceptable accounting solution.

The nice thing about the solution we have is that one of the reporting options is to use Excel with an add-in that allows us to pull the data out of the Longview database. Our monthly business review meeting reports are actually still shown in Excel; it's just that all of the data is pulled from the database directly into Excel. We have the ability to pull the data back and forth, but it's secured and controlled and balanced. It's one source of data, and you can pull it in all kinds of different ways.