To Excel or not To Excel?

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Millennials are growing up in an age where technology and social networking have set the bar on accessibility to information anytime, anywhere.

This coupled with the commoditization and availability of simple, elegant and intuitive consumer applications has given enterprise users a fresh perspective on user experience. Gone are the days of clunky old systems running thick clients on desktops. The plethora of apps driven by the smartphone revolution built on iOS, Android etc. and some of the advances in HTML5 have resulted in an enterprise user persona that expects a joyful experience.

In spite of these trends in the enterprise planning and analytics space, there seems to be one app that is hard to pry from enterprise users – “the ubiquitous spreadsheet”. The industry de-facto standard seems to be Excel. For 21st century enterprises looking to get a leg up on the competition, usage of disconnected spreadsheets might just turn out to be the weakest link that constrains an organization’s true potential.

Enterprises have to start paying attention to this Excel bottleneck if they intend to be the last man standing in today’s fiercely competitive battleground. Charles Darwin’s quote on survival of the fittest resonates well in this context:

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.

With this in mind let us try to connect the dots on some of the characteristics of Enterprise 2.0 and where disconnected Excel based processes might pose a bigger stumbling block than anticipated. Some of the traits expected of the 2.0 Enterprise include the following.

An Integrated Enterprise:

A connected Enterprise where all the plans are linked to provide a truly integrated view of your planning processes in one system. This process breaks down when Excel is used for the following reasons:

  1. Inability to link plans due to the disconnected nature of spreadsheets. This result in the inability to propagate changes in one plan to all linked plans and associated stakeholders
  2. Inability to plan and model the enterprise at the varying levels of detail such as aggregate vs. detail modeling. This results in planning processes that are broken or setup at inappropriate levels due to limitation of the tools being used

A hypothetical sub-optimal enterprise with 2 brands, 10 accounts with monthly planning cycles could potentially have for the full year:

  • Brand Plans: 24 spreadsheets (assuming 2 brand planners)
  • Account Plans: 120 spreadsheets (assuming 5 account planners)

Translate these to real enterprises and you can quickly see how these numbers would become unmanageable. Eventually constraining enterprises that are looking to move towards continuous real-time planning processes with rolling horizons.

A Productive & Compliant Enterprise:

Regulations and compliance standards such as SOX, BASEL II, HIPAA etc. have resulted in organizations spending upwards of $1M – $2M to ensure they are compliant with these government regulations. Few areas where this becomes hard with disconnected Excel would be:

  1. Audibility and traceability of plans being managed due to the locally distributed nature and lack of control in managing spreadsheets.
  2. Plan versioning and consistent process adherence across the enterprise due to the customizability of spreadsheets that can result in potentially different ways of planning the business.

Lack of quality assurance and testing of these spreadsheets, which are complex documents with millions of intersections of data and formulas. Some of these formulas can be extremely complicated for an average user to interpret especially when they include macros and multi-dimensional models. Given the churn within the planner community where 90% of the entry-level planners change every 12 months, there is little to no room for error. There are no centralized QA processes to validate and test the formulas used in each worksheet. It is a safe bet to assume that every spreadsheet has errors but the bigger question is what is the impact on the enterprise. If we assume an error rate of 1-2% attributable to spreadsheets then it adds up very quickly for an enterprise. An enterprise with $1,000 M in revenue could be looking at value leakage of anywhere between $10M – $20M.

A Collaborative Enterprise:

The proliferation of real-time content and updates via social media channels such as Twitter, Facebook etc. have made it easier to adopt collaborative tools for communication and collaboration within an enterprise. Some of the key enablers of collaboration within an enterprise that would be impacted by Excel include:

  1. Performance management through the use of agility metrics around user engagement, forecast quality, collaboration etc. since these are not tied to locally used spreadsheets.
  2. Capturing of assumptions associated with forecast based on structured and unstructured market intelligence information since spreadsheets contain ad-hoc information and notes that are not summarizable to management.
  3. Task management and real-time visibility into my tasks or my teams tasks and their status and being able to create these as part of my business workflow since Excel is disconnected from the other applications in my enterprise.

Imagine trying to incorporate performance management and real-time collaboration / task management into a disconnected spreadsheet. The resulting benefit of a collaborative planning process far outweighs the gains from using tools that may be familiar to the user but limits the potential of the enterprise.

An Agile & People Centric Enterprise:

Connected users also bring about the need to support multiple devices with multiple technologies and form factors. Some of the key impact areas with Excel include:

  1. The increased usage of tablets and mobile has resulted in enterprise applications being able to cater to information being pervasive and always ready for consumption. These only add to the limitations of desktop based applications like Excel where the cost of support goes up due to the need to maintain versions for Windows, Mac, alternate solutions for tablet, mobile, cloud etc.
  2. The other factor that impacts an organization’s ability to adapt is their flexibility to adopt better processes and tools. Cloud based enterprise SaaS solutions provide a great platform to experiment and pick the best solutions tailored to their needs. This also reduces the risk of huge investments on unusable systems that you are stuck with for the foreseeable future while your business needs are rapidly changing.

So is there a solution to this conundrum? It maybe one of compromise where Excel is another presentation layer that is always connected to an in-memory data store with high performance engines capable of complex real time calculations. This makes it possible to enable centralized and consistent planning processes that are visualized using a variety of presentation layers – web, excel, mobile, tablet etc. New age enterprise SaaS providers are leading the way with the use of latest technologies while keeping the business goals and business users in mind that can empower enterprises in their journey to Enterprise 2.0.

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