Spreadsheets and EPM solutions: Have your cake and eat it too

Spreadsheets and EPM solutions: Have your cake and eat it too

It seems there is no escaping the ubiquitous spreadsheet when it comes to planning and budgeting, with 90% of organizations using them somewhere in their FP&A process. For many, typically the 40-50% of respondents in most recent surveys, standalone spreadsheets remain the primary tool. This results in myriad problems and risks such as those detailed in the Anaplan whitepaper 7 reasons to choose Anaplan to replace your planning spreadsheets.” The proportion of companies that are totally reliant on spreadsheets is gradually declining, although I guess it will always be the preferred planning tool for small businesses.

That still leaves another 40-50% of companies are using spreadsheets alongside a dedicated budgeting application that they have either built themselves in-house or licensed from a software vendor. In fact, the majority of enterprise performance management (EPM) vendors provide a plug-in for Microsoft® Excel® (like Anaplan for Office Add-in). Some even utilize it directly as their user interface. We all know Excel will never go away, nor do we want it to. But, should we rely on it quite as much as we do for such a vital part of our business process?

Myth 1: All business users are familiar with spreadsheets

You do not have to look too far to find vendors suggesting that spreadsheets are the preferred interface for FP&A solutions because people already use them in both their professional and personal lives. There is no disputing that. However, I would suggest that while most of us can add up a column and insert a new row, few people possess the in-depth knowledge needed to write a formula to spread cell values based on a trailing six-month average, yet alone build a nested function. As a result, only those with advanced spreadsheet skills, such as finance folk, are likely to be able to build the more complex business rules encountered in ad-hoc scenario planning.

Myth 2: Spreadsheets are ideal for self-service reporting

While spreadsheets allow users to control the look and feel of reports and graphs, standalone spreadsheets are not always the most accurate tool for such tasks. That is why the many vendors offer such a vast array of specialized reporting and dashboard products that are both quicker to work with and provide the accuracy of a dynamic connection for more accurate reporting.

Myth 3: Spreadsheets are the absolute best tool for the job

This year marks the 30th anniversary of the launch of Microsoft® Excel®. While the size of each worksheet has increased by a factor of 4,096 and there is a 64-bit version to cope with larger models, there are still size limitations. That coupled with the relative flatness of spreadsheets mean they are increasingly out of step with the huge data volumes and complex dimensionality encountered in modern business life.

Don’t get me wrong; I am not suggesting there is no requirement for planning and budgeting solutions to integrate with spreadsheets. There are plenty of situations where you want your solution to ‘play nice’ with Excel; right? At some point, every planner will want to move data back and forth to and from spreadsheets, especially for producing management reports and board packs. Even Anaplan, a company that is frequently referred to as an “Excel-basher” in the press enhanced its spreadsheet integration in its most recent release with the addition of Anaplan for Office® Excel for reporting and input. It’s a smart move as it gives users more choices in how they interact with the core Anaplan platform.

Problems only arise when spreadsheets are the sole tool for FP&A or when they are used as a modeling add-on to an overly complex or inflexible enterprise planning solution. Both situations are far from ideal and I would urge those commissioned with looking for a new enterprise planning solution to minimize it happening by only short-listing products that business users can manage and model in themselves without having to rely on specialist support. Newer EPM solutions that have been launched in recent years have majored on self management, developed their own intuitive interfaces, and made use of simplified scripting for writing business rules. These features should encourage business to work within the tool wherever possible so that spreadsheets assume a complementary role in enterprise planning. Allowing those of you not ready to let go, to have your cake with a step forward into the new age of planning and eat it too, keeping Excel close by and handy.

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