For accurate and agile budgeting, forecasting, modeling, and reporting, enterprises need to think outside of Excel’s limited dimensional framework and move toward cloud technology that can truly handle multi-dimensional views.
Within any enterprise, financial and operational data includes a host of variables and is required to be analyzed in a variety of ways. These variables are what we call dimensions and are items such as products, departments, legal entities, accounts, scenarios, regions, time…and the list goes on and on. In order to perform this complex analysis of the data, technology that is multi-dimensional in nature is required.
Multi-dimensional analysis technology (a.k.a. On-Line Analytical Processing or OLAP) allows you to gain a richer view of your business results by visualizing the unique combination of data points. Here are some of the main ways multi-dimensional technology will enhance your enterprise performance management (EPM) processes.
1. It offers unlimited possible dimensions. Excel offers limited dimensionality and there comes a point in time when deeper analysis is not possible. For complex business requirements, using this limited dimensional framework will prove to be incredibly tedious and exhausting, and the more unique data points there are, the more difficult it will be to envision multiple slices of your data in Excel. Multi-dimensional technology allows users to view and analyze their business from unlimited perspectives, so they can gain a deeper understanding of the data and obtain new insights.
2. It significantly reduces error. Since Excel has limited dimensionality, complex businesses typically need to manually link separate spreadsheets together to achieve multidimensional analysis. As variables increase, the manual work becomes even more exhausting, and consequently, even more prone to error. By leveraging a software package with multidimensional capabilities, you can eliminate a lot of the manual work and reduce human error. It also allows for greater visibility and control over your data.
3. It reduces the workload. Using Excel for EPM processes such as budgeting, forecasting, or reporting is incredibly labor-intensive. Not only is Excel error prone but what about the manual process of sending out and collecting spreadsheets? The data quickly loses the single source of truth as version control issues become widespread. For smaller companies, it may be a little more practical, but as an enterprise grows, there will be more variables that need to be factored into the business. With EPM software that supports true multi-dimensionality, you can conquer more work in much less time.
4. It improves accuracy. Even assuming you were to never make a single manual error in Excel, it remains unlikely Excel could ever provide the same level of precision and accuracy as true multi-dimensional applications. With multi-dimensional technology, every dimension of your business can be stored independently in the database, and the software allows you to utilize any combination of those dimensions to generate your reporting and analysis. This not only gives you more control over your data, but it also provides a much greater depth to the analysis of data.
For large enterprises, performing EPM processes such as budgeting, forecasting, modeling, and reporting in Excel simply isn't practical. Being limited by dimensionality requires you to link countless spreadsheets together in attempts to manually create your unique data perspectives. Not only is this incredibly time-consuming, but it's also prone to error. With multi-dimensional EPM software, you can easily generate your reports and views with all necessary dimensions, while drastically reducing labor and eliminating human error.
Read more about the benefits of multi-dimensional technology in this whitepaper, Demystifying OLAP with Enterprise Performance Management.