Posted by Formulate - A Kainos company on 30/06/20 12:40

Spreadsheets are a bit like a bad relationship. At first everything is great, but the romance soon fades as they become problematic. We look at five signs to see if you have outgrown your spreadsheets and whether it's time to find a new partner.

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Do your spreadsheets know their place?

If you ask someone why they still carry a flip phone, push a lawnmower, or use a computer from 1997, they might say upgrading is too much of a hassle. After all, if it ain’t broke, don’t fix it.

Take spreadsheets. You might spend time every month fixing broken links, reconciling data from multiple sources, or creating complex, custom sheets. Like many tried-and-true but outdated tools, spreadsheets may function effectively for these tasks—but efficiently and quickly? Not so much.

Data spreadsheet and pen

Manual spreadsheets simply aren’t powerful or fast enough to enable comprehensive, continuous planning. And without that, you can’t keep up with the pace of modern business. This is why some FP&A specialists use the phrase “spreadsheet-itis.” It’s not only that spreadsheets involve cumbersome and untimely reporting, but they also can deny managers and employees a single, unified view of vital data—one version of the truth.

Problems with maintaining undocumented or documented spreadsheets also occur when the employee who developed the spreadsheet transfers elsewhere in the organisation or departs it altogether.

 

five signs you have outgrown spreadsheets.

 

Sign #1: Manual processes that hamper company-wide planning

Depending solely on spreadsheets keeps finance teams mired in manual processes, overburdened with approaching deadlines, and stuck investigating broken links and errors.

There may be good spreadsheet reports within a given department, but generally the rest of the organisation is not aware of them. Additional pain results when other departments re-create their own version of the same report—a wasteful duplication of effort. With multiple spreadsheets, when data differs, which are the right numbers?

 

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Sign #2: Long budget cycles and out-of-date numbers

The time it takes to generate, share, and maintain reports every month is one of the biggest burdens of manual spreadsheet reporting. By the time you’ve gathered all the numbers, fixed formulas, and created an annual plan, your numbers are likely out-of-date.

 

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Sign #3: Infrequent forecasts and budgets

Annual budgets and disjointed processes can’t keep up with today’s fast-paced business environment. Budgets are out-of-date soon after they are published. And quarterly forecasts are routinely obsolete by the time they’re finalised.

 

Data Integration. Information Concept.  Blue Arrow with Data Integration slogan on a grey background. 3D Render.

Sign #4: Too many systems, not enough integration

Budgeting would be hard enough if keeping numbers current were the only challenge. For the determinants and source variables used in the budget process, finance teams also have to collect data from many different systems (e.g., HR, ERP, CRM, etc.). Spreadsheets alone might have worked five years ago. Not anymore.

When data is stored on employees’ computers (e.g., a laptop or personal computer) rather than on a server or a web-accessible source, dissemination and analysis becomes more difficult. Nonintegrated data means that assumptions in one person’s plans will likely not include the most recent version from someone else’s assumptions and plans. Most spreadsheet users have a widely held misconception that their spreadsheet application is some sort of database. It is not. It is a calculator effective at manipulating and viewing data, but it is not particularly good at storing and managing it in a reliable, secure, scalable way.

 

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Sign #5: Only finance and IT can run reports

When IT and finance are the only ones who can run what-if scenarios and complex queries, they become a bottleneck, which makes it difficult to create timely ad hoc reports. Even the most detail-oriented manager might get caught flat-footed if an executive asks a question about a specific line-item overrun or a revenue variance due to fee increases.

 

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Company-wide plans

In today’s world, managing business performance requires executives, managers, and employees to have access to accurate, reliable, and timely information and to see the numbers behind the numbers. Why? Because then everyone is on board with company-wide plans. It enhances buy-in.

FP&A specialists recognise that spreadsheets are too restrictive with their racked-and-stacked columns-to-rows calculations. They need modelling capabilities using flexible software.

Organisations cannot continue to spend 80% of their time collecting, copying, pasting, and reformatting data, 10% weeding out errors, and then realise in the remaining 10% that the resulting data is not structured in a way that allows it to be analysed. They cannot rely on undocumented macros and formulas when no one remembers how to maintain them—or the business policy they were invented to support.

The more that spreadsheets clog the front end, the more the back end, where the payoff is, becomes obstructed.

Go ahead and keep that flip phone and older computer. And keep using spreadsheets to manage your business—just use them in combination with cloud-based planning tools that help your company plan for what’s next.

 

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About Formulate

Formulate - A Kainos company are one of the leading UK and European partners for Workday Adaptive Planning (Adaptive Insights). We build and improve forecasting solutions for existing and new users of Workday Adaptive Plannings. Our unique set of business pack solutions, alongside our extensive skills in finance, business and software deliver leading forecasting solutions.

 


Tags: forecasting, cfo