CORT, a Berkshire Hathaway Company, is in the enviable position of being far and away the most dominant player in a niche market: rental relocation services. Last year, nudged by a sudden contraction in its core business during the real-estate downturn, the $370 million company decided to invest in a BPM solution to expedite its 5-month-plus budgeting process. Debbie Lansford, CFO, filled us in on the details.

BPM Magazine: How long did it take to implement your BPM system?

Debbie Lansford: We moved pretty quickly on this; we started in May of 2009 and we were pretty much done in September. We were motivated because we wanted to get it implemented in time to use it for our 2010 budget cycle.

BPM: Before you implemented it, what were some of the big challenges that you faced?

DL: We have a whole lot of participation in our budgeting process. We budget down to the operating district level, meaning that they prepare their budgets and then we roll them up to a consolidated budget. Because we were Excel-based it was very, very time-consuming. The controller would update the Excel-based schedules and send them out and hope nobody messed with them -- and people always do towards the end, in the last crush -- and it took an awful lot of time to get them in and concatenate all of those files to end up with a divisional rollup and then a corporate rollup. As a result we would have to start the budget cycle very early in the year and be finished in August to have time to do all of the cleanup and so on by October. And a lot of times -- particularly when we budgeted for 2009, because we had done that in the summer of 2008 -- the budget was way off.

BPM: Because of economic conditions?

DL: Exactly. Having to start so early, and with it being so difficult to update, by the time we got to January or February the budget was totally toast. There was no way it was going to be accurate. We’re a subsidiary of Berkshire Hathaway -- we are directly held by Wesco Financial, which is a public company in its own right and which is 80 percent owned by Berkshire and 20 percent widely held. They’re traded on an exchange, and they use our budget forecast for impairment testing for goodwill purposes. As a result of this totally off budget, we had a whole ordeal with our public accounting firm about our goodwill impairment testing at the eleventh hour. Which was not fun. So I was very motivated for us to find a way to do it quicker and faster that wouldn’t cost us a fortune and take a lot of time to implement.

BPM: So in a normal year how long would the budget process take?

DL: The district operations would spend four or five months on the budget from the time that they actually did their draft, and then we had progressive levels of management reviews up to the executive committee. It was a very long, drawn-out process, and I never really had a whole lot of faith in it after it was done.

BPM: I’m sure you wouldn’t want to have Mr. Buffett breathing down your neck!

DL: No ... well, I certainly don’t like to have issues at the eleventh hour on the audit opinion! And I certainly wasn’t going to be happy about being called on the carpet about "When did you know that this was not going to be the reality of the situation?" My response was, "Well, I knew about the same time that everybody else did!" I think that the decline of the economy took everybody by surprise. While I could, from one perspective, appreciate the impact this had on the impairment testing, I also was just a little bit dumbfounded as to why people were expecting us to know ahead of anyone else.

BPM: And your business must have been hit particularly hard, since it’s real-estate related?

DL: Last year was the worst in the history of this company, without question.