There is no question about the popularity of Microsoft Excel. Even the guys who design and develop FP&A software for enhanced business analytics (BA) and business intelligence (BI) (functions traditionally done using Excel) praise the merits of Excel - and why shouldn’t they? After all, research carried out back in 2011 identified that almost 87% of CFOs in multimillion and billion-dollar multinationals depend on Excel spreadsheets when the time for a financial closing arrives.
CFOs rely on Excel for accounting, reporting and budgeting functionalities as well. Greg Schneider who is the VP of marketing budgeting for Adaptive Planning states he too uses Excel for everything. According to him, analyzing and evaluating different lease options is something that can be conveniently done using Excel spreadsheets. The CEO of SaaS (Software-as-a-Service) also states Excel is an fantasic tool for performing complex functions, including forecasting and inventory management. It is flexible, controllable, cheap, and on top of everything else, everybody uses it.
It goes without saying that while this is all true, eventually there’s always a ‘but’ with Excel. According to Rob Hull, the CEO and founder of Adaptive Planning, Excel is indeed useful, ‘but’ the time it took for him to input all the data, email it to others and ensure each person he sent the email to gets the correct versions of the Excel sheet without any errors, is frustrating.
He puts it quite simply in that if you need to merge data and information from various sources and need to add analytics into the mix as well, Excel has indeed become redundant.
The Rise of Other Analytics Software
There is no doubt that other BI, BA and financial software is being designed to gradually replace the use of Excel spreadsheets and that the new software is gaining considerable popularity and a decent market share. This is especially true because the volume of data has been significantly increasing, as are businesses.
More businesses now store massive loads of data to evaluate what should be used to further the integrity of the business organization and what not to use. Although there has been research that suggests Excel sheets will not be disappearing anytime soon, a number of companies have reported using 500,000 spreadsheets as part of their quarterly closings.
That being said, it is a globally accepted reality that financial institutions and multinationals with revenues over $1 billion are at constant risk of error and false inputs using Excel sheets, something which can lead to loses worth millions. These days, most multinationals and large businesses typically use FP&A tools from providers like Oracle that serves Hyperion, SAP that provides Business Object, and IBM’s own Cognos.
Although Excel spreadsheets aren’t going to go away anytime soon, it is still a smart idea to upgrade your FP&A tools to faster, more efficient and reliable tools.