Excel is practically synonymous with business processes worldwide.
In an article published in the Enterprise Times, it was reported that about 60 percent of businesses in the U.S. are still relying on spreadsheets. Among those that continue to rely heavily on Excel are FP&A professionals, for whom the tool is indispensable for their processes. Despite the existence of spreadsheet alternatives, FP&A professionals continue to stay in and depend on Excel, and it remains the most popular spreadsheet software to date. There are a few good reasons why the majority of the market continues to rely on spreadsheets.
Every company is unique, and each one has built financial models over the years that help them perform better. A company that has been holding its budget/forecast process on spreadsheets for years has built their financial IP (intellectual property) into their spreadsheets. On the flipside, any budgeting/forecasting software comes with a built-in model. This means that users are expected to adapt themselves to the software, not the other way around.
This issue is one of the biggest problems of CFOs in taking the decision to move away from the good old model to a new one. No one is promising that the new system will work as well as the old one, so why fix something if it ain’t broken?
Training employees to work with a new software is hard. People don’t like change, and making a budget/forecast software implementation successful requires that everyone use it. This ranges from the finance team, to the end-users who are filling in templates, to management.
In many cases, users from different departments and sites find the process of learning a new system to be a “chore.” If they don’t really want to work with a new system and don’t care to learn it, the implementation process is doomed before it even gets started.
That’s why in many cases, implementation processes fail and companies go back to working with spreadsheets.
People love Excel. They use it all the time and a company that is used to working with Excel for maintaining the budget/forecast process sometimes just wants to keep it that way.
“There are always some people who have their routines, and they just don’t want to change,” says Michael C. Mankins, a partner in Bain & Company’s San Francisco office and the leader of the firm’s organization practice in the Americas. (Harvard Business Review).
Additionally, despite the existence of dedicated systems, you’ll often find employees exporting data to Excel and working with it there. Data manipulation and examination is easy to conduct in Excel, so why not? Well, if you migrated your data to a dedicated system, working with dedicated systems+ exporting + importing back into the system often leads to mistakes, that’s why.
Budgeting/forecasting software is usually expensive and is around the $50K mark per year for a Small/Medium Enterprise.
An important aspect of the cost is implementation- implementing a budgeting/forecasting software usually costs a couple of dozens of thousands of dollars, and sometime even more than $50K.
Excel is a fantastic tool. How can we continue using it and also improve FP&A work?
Since Excel doesn’t seem to be going anywhere in the near future, there is much to be said about platforms that can allow end-users to keep using Excel and simultaneously improve processes. One such platform is DataRails.
With DataRails, finance work remains unchanged as professionals continue working with Excel as they’re used to. At the same time, organizations benefit from an enterprise-class platform that lets employees use Excel, a tool built for personal use, on an organizational scale without running the risk of inaccuracy, unnecessary errors, or data loss. With DataRails, Excel is enhanced into a database-centric organizational solution.
Their patented technology consolidates and stores all Excel-based data on a cloud-based centralized database and allows finance professionals to optimize processes with automation, all without changing the way work is done.
End-users keep using Excel while executives benefit from superior access to data and novel insights. With DataRails’ effortless, automated, and accurate solution, employees can spend less time putting the numbers together and more time thinking about what they mean, all without leaving Excel. Now that’s what I call win-win.
Make something good even better.
Excel is an excellent tool, and finance professionals will undoubtedly continue to rely on it. However, in order to truly extract the most value from financial processes, it’s best to use the tool alongside other platforms that build upon and enhance all of its capabilities. This allows finance professionals to make the most of all that the software has to offer while also overcoming where it falls short.