Globally, we are facing increasing uncertainty, which challenges businesses to be faster, more creative and more strategic. However, despite this – Excel and other spreadsheet technology is still the most commonly used tool by FP&A teams worldwide instead of more specialised and efficient tools. Spreadsheets were a product of an age of linearity and slower business processes and more predictable economies - but in this fast-moving era of commerce, the development of plans and processes needs to be done as quickly as possible. The window for business opportunity has become ever narrower - businesses can no longer afford to rely on outdated tools.
Fortunately, in response to this need, new efficient and streamlined business planning, analysis and modelling tools have been developed. Robert Half1, a management consultancy company, has reported diminishing usage of Excel in their 2018 Benchmarking the Accounting & Finance Function report from 69% usage by U.S executives in 2017 to 63% in 2018. While they are expecting Microsoft to try and keep Excel relevant, they highlighted several key limitations in scalability, data capacity, graphics and team collaboration. These sentiments are also reinforced by both Meta S Brown2, an analytics expert, and Bernard Marr3, an enterprise technology expert, who have contributed articles to Forbes on the outdated nature of spreadsheet technology.
Drawbacks, such as limitations of large-scale manual data entry and poor collaboration capabilities that often lead to version control errors, are noted by both - and are common frustrations that MODLR clients have expressed (you can read more about the limitations of Excel in previous MODLR articles here, here and here). While spreadsheets may still perform some business tasks, both Brown and Marr have found the analytical and planning capabilities of spreadsheets do not match with the requirements and pace of the modern market.
So what does match the requirements necessary for the modern market, then? Consider - Cloud-based planning.
Cloud-based planning
Cloud-based planning software is the new rising star in the financial planning industry. Cloud-technology provides all the features of the spreadsheet, and more - such as automation, real-time updates, dynamic graphics, intuitive design, easy collaboration, multi-dimensionality and an integrated platform for a single source of truth. Kevin Fitzgerald, the Managing Director of Xero in Asia highlights in an article of how cloud technology and these capabilities can bring benefits such as increased productivity, decreased costs, better cash-flow management and improved data security for companies4.
With these new capabilities, cloud-based planning solutions are superseding legacy technology and providing the necessary speed and efficiency that businesses need in today’s marketplace. While spreadsheets may still have their uses in finance, workforce planning, reporting, sales and analysis - far superior cloud-based planning tools are now available.
Planning for the future
Patrick Forth, a senior partner of leading management consultancy company BCG, talks5 about the idea of competitive advantage being anchored in a company’s speed and effectiveness to change. He emphasises the importance of software, data, analytics and change management in the modern era and that cloud technology plays a big role in imparting these factors.
Newer cloud-based software gives businesses greater room for high-value decision making and strategic planning. Through automation features, robotic tasks such as data entry and consolidation are accomplished quickly without manual input, FP&A teams are able to model and analyse scenarios in a fraction of the time.
While spreadsheets may still have a role as a single-user application, when multiple planners become involved, they quickly become clunky, especially with multi-user lockout dynamics. In comparison, the intuitive and easy-to-access nature of cloud technology enables ready collaboration between all branches of an organisation, with all collaborators being able to work, plan and collaborate on a single document at the same time - and without being locked out. Changes between all users under a cloud are updated immediately in real-time for all users. Furthermore, intuitive planning interfaces have been introduced in leading cloud-technologies that allow for a seamless user-experience for even non-finance personnel to collaborate, conduct what-if scenarios, plan and create reports.
Businesses that make the move to cloud-based planning will greatly increase their scalability and speed. The capabilities of spreadsheets are a product of an earlier era, without the complexities and scale of the modern age. Cloud-technology is designed to reflect modern business demands and needs, meaning cloud-based planning solutions can support highly complex multi-dimensional models and an unlimited number of users. Additionally the performance demands of modern enterprise are catered for by the engines of advanced cloud-based planning software. These are capable of adding memory and computing the necessary resources needed for projects, all without any of the data-handling limits of spreadsheets.
Using the cloud, data can be accessed, shared and traced from all parts of an enterprise. The cloud also enables automatic data integration from your business’s transactional data sources such as CRM, ERP and HCM, all in real time. Businesses will never have to worry about working with outdated information or manual importing ever again.
Bridging the gap
There is a widening performance gap between companies utilising outdated processes and technologies and companies that adapt the more modern and agile methodologies and technology. Innovative and market leading results are created by the teams that can best adapt quickly, and efficiently. Companies which lag behind in their technology, will find their opportunities and business performance increasingly diminished.
What was once unimaginable, namely organisation-wide planning and collaboration, is now growing as a market necessity for not just competitive agility, but for business survival.
Start your future thinking now, with MODLR.
[1]www.roberthalf.com/blog/salaries-and-skills/excel-for-finance-professionals-still-king-of-the-spreadsheets
[2]www.forbes.com/sites/metabrown/2017/10/30/you-can-reduce-business-risk-by-phasing-out-spreadsheets-for-business
[3]www.forbes.com/sites/bernardmarr/2016/06/16/spreadsheet-reporting-5-reasons-why-it-is-bad-for-business
[4] www.linkedin.com/pulse/journey-cloud-how-can-your-business-overcome-from-fitzgerald-fcca
[5]https://www.ted.com/talks/patrickforthhowcancompaniescontinuetothriveintimesof_change
