It would not be the first time that a friendly banter with my pal Dennis Howlett leads me to post a blog. This time it is about spreadsheets . I have a (not so) slightly difference of opinion with Den on the topic of use of spreadsheets in enterprises . The short version is Den thinks spreadsheets are evil, and I don’t :) OK that is dramatizing it a bit…but here is my (strictly personal) defense of spreadsheets for whatever little it is worth
1. If past performance is indicative, spreadsheets will thrive
Spreadsheets provided continuity for business users from early 80s till now. In this time frame, a lot of BI and EPM tools came and went away. Lotus 123 faded out, but its users just moved on to MS Excel . I don’t see this changing in near future either. Today there are more BI and EPM tools than ever before – and all the more reason for FP&A types to hold excel near to their chest to resist change.
2. BI and EPM companies use excel internally – a lot !
I know – I have worked in some of those companies, and partnered closely with others. They all use excel for BI and EPM alongside their own tools. They all market their wares as “excel killers” when it suits them – but can’t seem to convince their own planners and analysts to let go of excel.
The smart vendors all integrate excel into their products. Despite marketing hype they create, they all know that the product management rationale is solid that excel won’t go away, and recreating excel functionality elsewhere is not a good use of resources.
3. Analysts and Executives use Excel all the time too !
Not naming names – but every analyst I know who cover BI and EPM have excel on their laptops, and have an assortment of files with complex versioning schemes via naming conventions. The more modern ones use google docs instead of excel – but that is not exactly too different.
Similarly I have often seen data loaded in spreadsheets used by vendor executives in their demos . They just don’t say the backend is excel ! I am not saying this is what everyone does – just that I have seen it multiple times. I don’t blame the execs either – rarely do they know what happens behind the scenes of the demos they have on their iPads :)
What is the most common data source used by the new generation BI tools ? Excel ! People dump data from other systems to excel , add formulas etc, and put a nice visualization on top via the slick BI tool. Just that they don’t talk about excel in the scenario explicitly.
4. Convenience trumps functionality almost always – except for legal reasons.
World changes faster than BI and EPM tools can keep up with. The ability to change formulas on the fly and and rows and columns means that analysts can keep up with the changing world without waiting for the tool vendors to catchup. The only time they stick with tools 100% is if there are legal reasons to do so – like final copies of financial documents that need to be kept in a proper system of record.
I know top reference customers of pretty much every EPM vendor I know of that do plenty of work offline in excel and just upload the final copy to the tool for safe keeping. Or, they will do high level planning in the tool and then do finer details in excel. For example – they might allocate expenses to the head of a department and then let her manage it offline as long as she does not shoot over budget. How does she do it ? she uses excel !.
Den asked me if enterprises will use manual invoice processing if they have ERP. I have implemented SAP in a lot of Fortune 500 customers – and every single one of them have had a mass upload of invoices from excel !
5. Licenses, maintenance and training favors excel
Even if someone creates a magic tool that does everything – it is still hard to beat excel . Why ? because excel is a general purpose tool needs very little additional training , and it does not need constant network uptime for usage across the company. The incremental cost of keeping it running over time may not “appear” to be that high. True cost might be high – but as with everything else in enterprise land – perception is reality.
6. Does that mean all is good with excel and you should not use EPM and BI tools ?
No – Excel can, and does, cause grief in a lot of companies every year. A cursory internet search will provide you several horror stories. What the internet won’t tell you is that vast majority of the time, spreadsheets are a life saver in enterprises. But then, good news has no value in press . If my house gets water damage just once in 30 years , would anyone write an article called “House has not had single issue with water damage in 29 years and 11 months” ?
The goodness of spreadsheet is only apparent by first hand observation of its users. This is the same kind of shit that happens with ERP too . How many “ERP is dead” articles have we read ? And how many companies actually took out their ERP ?
When you see customers who say “we have displaced excel” , at best it means one department for one use case has been using a new tool instead of excel . What would be great to know is if there are entire companies who have completely gotten rid of spreadsheets as a BI, EPM and ETL tool. I have not seen any in the nearly twenty years I have spent in this field.
The smart thing in my opinion is to find the best co-existence strategy for excel and all the other tools. Spreadsheets are invaluable when used reasonably – please just don’t paint it evil with broad strokes.
That is it . Defense rests, your honor !