Finance Business Partner MHR Analytics
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Is it time to move away from spreadsheets?

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Rory Brown discusses the importance of valuable data analysis and how CFOs can persuade their teams to move away from their reliance on spreadsheets.

1st Sep 2021
Finance Business Partner MHR Analytics
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Accountants and spreadsheets have a longstanding history together. Yet many fintech providers are urging the profession to move away from trusty spreadsheets and the many flaws associated with manual data entry processing. But what can compete with the almighty spreadsheet, and is it feasible to leave them behind?

It’s doubtful we’ll ever see finance ditch spreadsheets completely – and for good reason. They still have an important role to play in analysis, calculations and delivering presentable data in a short time frame. 

But with manual processes comes the propensity for human error. Data can easily be distorted by accidental formula changes, and unintentional data entry errors and version control issues can result in misleading figures. Accountants can spend countless hours searching for and amending mistakes, correcting formulas or keeping their data fresh when their time could be better spent on valuable data analysis and translating what it means to the business.

So, how can CFOs persuade their teams, many of whom are extremely proud of their proficient Excel skills, built up over many years, to move away from their reliance on spreadsheets? And how can they convince them that there are better ways to manage their data which come with less risk and the ability to provide more in-depth business insights?

Where to start: Spreadsheet security

A good place to start is to encourage finance to identify those spreadsheets which hold large quantities of data that could easily be transitioned to a more controlled and secure environment. 

Spreadsheets are not the best tool for holding and maintaining large quantities of data, especially sensitive, easily accessible data. Standardising individual processes and moving them to a database designed to manage large quantities of data, such as an ERP system, will also mean that it is better protected.

Data security isn’t the only reason to move away from spreadsheets. Certain forecasting processes require incredibly complex formulas and analysis of a large amount of historical data. While most finance professionals consider themselves to be advanced Excel users, their skills often fall short of what’s required to build such a robust process within a spreadsheet. 

The larger the data set, the more complex the formula; and with tight deadlines for reporting these figures, the chance of an error occurring is real and could potentially influence a decision maker to take the wrong course of action. 

Planning and forecasting

Although finance professionals are confident in using the financial models for planning and forecasting they can be extremely complex. If an adjustment or revamp needs to occur, a rebuild could be massively disruptive and impact business decision making. 

Finance teams should instead be looking to adopt more agile software to perform this role that can integrate with ERP data from across the wider business to produce analysis that can offer real business intelligence as well as various financial scenarios based on live data. Finance is unique in that it knows more about the business than most other departments and all key decisions and strategies will have an impact on the numbers they look after. 

Moving to an agile planning, forecasting and reporting tool will enable the team to add value to its analysis and share these vital insights with the management team and other key decision makers. 

Slow and steady 

Despite the benefits of moving some processes away from spreadsheets, it’s important to tread carefully when considering new technologies or ways of doing things. It should be treated as a massive change management process. 

Most financial professionals will have developed their IT literacy predominantly on spreadsheets. Introducing new software to manage a process they’ve done for years with Excel may be met with some resistance. To overcome this, it’s important to involve all key stakeholders and get their buy-in to the change from the outset. 

Demonstrating how some of the more laborious and repetitive spreadsheet tasks can be improved by the software, will help encourage the team to consider moving other processes across. It’s important to support the team every step of the way with technical coaching and skills development, alongside giving them additional responsibilities for maintaining the new tools on a regular basis.

There are still many uses for spreadsheets in business and finance doesn’t need to worry about relinquishing them completely. But with the promise of greater insights and analysis based on accurate real-time data enabled by planning software, the time has come for finance to look beyond traditional ways of managing data.

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