According to a global survey we carried out with our customers last year, a full 70 percent of corporate finance teams still rely heavily on spreadsheets. This figure is not surprising, as most clients we work with in corporate performance management (CPM) are replacing spreadsheets or legacy systems. On the other hand, it’s impossible to get a holistic view of a business using spreadsheets, and poor visibility creates business risk.
If spreadsheets have such a bad reputation, why do companies cling on to them when there are so many alternatives out there? I considered what it is that people seem to value about spreadsheets:
- Total transparency – even though spreadsheets are a terrible way to present data, and are often based on bad data, at least it’s easy to see the data and exactly how figures are calculated.
- Easy access – practically every corporate user gets a copy of Excel or Google Docs to be able to develop a spreadsheet.
- Easy to use – most people can do spreadsheet basics (though few people use spreadsheets to their full potential).
Given all the known cons of spreadsheets, these pros obviously carry considerable weight. We have learned through experience that the only way to wean finance teams off spreadsheets is to accept the need to offer similar pros while eliminating the long list of cons. These cons include high maintenance overhead, significant time spent by expensive finance resources performing manual input rather than real value add, poor data management, no data integration or ‘big data’ support and sub-par system performance and deployment options.
We’ve also learned that if you really want to relegate spreadsheets to the dustbin of history, you need to introduce more pros. Capabilities that support finance’s digital transformation goals - resilience, agility and automation - also really matter. For example, automating management reporting, analytics, and disclosure reporting and in a single system makes it easy for finance to adapt and keep pace with ongoing change in the business. At Swarovski and the Vaillant Group, we integrated our software with SAP HANA to help them achieve these goals.
Speed is also very important, especially when it comes to reporting. When finance teams cut time spent on planning cycles and the close process, they are freed up to do more analysis and strategic tasks, and also gain more flexibility. For example, being able to do faster consolidation gives teams time to handle multiple re-consolidations before publishing final results. Equally, faster allocation processing makes it possible to run sophisticated ‘what-if’ simulations during budgeting and forecasting cycles.
Don’t get me wrong. The need for fast, easy, ad hoc number crunching means spreadsheets will always play a role in corporate finance departments. However, today’s systems make it possible to wean your people off them for strategic activities like consolidation and close, compliance and management reporting to significantly improve outcomes and reduce business risk.
Nick combines 18 years of experience in software, accounting and consulting to help finance leaders drive transformational change across the Office of Finance. Nick heads the UK and Ireland operations of CCH Tagetik, a global provider of modern corporate performance management solutions that helps improve financial oversight and de-risk critical business processes. As part of Wolters Kluwer Tax & Accounting, Nick is leading the business through a period of sustained period and customer acquisition.