It was 31 years ago this September that the world was introduced to Excel. As one of the first killer apps, there’s no question the spreadsheet changed the way everybody works – not just the finance department.
Today, Excel remains ubiquitous among finance and accounting pros. In fact, 43 percent of them report that Excel still plays a significant role in their jobs, according to a recent survey conducted by Radius Global Market Research and sponsored by Host Analytics.
We can all agree that spreadsheets are far from perfect and that over the past three decades, more efficient ways to budget, plan, model, and forecast have arrived on the scene. Specifically, fast forward to the cloud era and with it, the rise of enterprise performance management (EPM) solutions. Designed to provide more control and accuracy in supporting strategic financial processes such as budgeting, planning, forecasting, financial consolidation, reporting, and analysis, cloud-based EPM solutions fill the wide gap that spreadsheets leave behind.
That’s because spreadsheets, by their very nature, were never meant to handle the complexities of corporate financial processes. Nor are they able to support the finance’s team’s need to sufficiently draw insight from non-financial big data that comes from other business functions such as sales, marketing, and the supply chain. Yet a full 57 percent of finance professionals are using spreadsheets as a standalone tool or as a front-end to other systems so they can meet EPM requirements for planning and budgeting, financial reporting and disclosure, and analytics, according to the survey. This begs the question of whether our collective reliance on spreadsheets is out of habit, necessity or fear of change.
Looking at the upside of spreadsheets, there’s the low cost, ease of use, intuitiveness, and almost no learning curve required. Now, weigh those benefits against lack of version control, audit trails, and security as well as tedious data entry, and human error inherent in spreadsheets. The scales are increasingly tipping toward the need for more control, scalability and functionality that goes beyond the traditional spreadsheet.
Considering the pros and cons of spreadsheets, the evolving finance function, and survey data showing 71 percent of businesses planning to tap into non-financial Big Data over the next one to three years to help with the planning process, expect spreadsheets to shift from center stage to a supporting role.
Read the complete version of this post as published in FEI Daily on October 11, 2016.