Long Live the Spreadsheet: Leveraging Excel for CPM

Long Live the Spreadsheet:
Leveraging Microsoft Excel
for Effective BPM
Some BPM vendors claim that Excel is dead. But companiesthat believe them may be overlooking a user-friendly, easy-to-manage, and cost-effective option for implementingenterprise-scale performance management.
by Mike Morini ICROSOFT EXCELis the de factoMike Morini, president language ofof OutlookSoft Corp., business. Foris a seasoned enterprise nearly a quar-software executive. ter of a century, spreadsheets haveHe has held leadership helped businesspeople of all stripespositions with IBM, Mcommunicate their past perfor-J.D. Edwards, and mance as well as their expectationsAdvent Software. for the future. In many companies,everyone from the CEO down tothe financial analysts and the line- Šof-business managers relies on 200Excel spreadsheets to analyze num- 5 BRIAbers, manage their budgets, fore- NSTAcast financial outcomes, and model UFFERwhat-if scenarios. C/OTThe reasons for Excel's popular- HEISPity are numerous. The application OT.COis pervasive, so employees transfer- Mring between companies don't haveto learn new software. It is easy to use and intuitive to under-stand, and most corporate finance people already know it well.At the same time, Excel offers a raw analytic power that makesit many decision-makers' tool of choice as the front-end win-dow into the budget and forecast.Despite these benefits, spreadsheet software has comeunder increasing scrutiny in the past few years. Many businessperformance management (BPM) software vendors haveincorporated strong messages into their marketing efforts urg-ing finance departments to move away from Excel towarddashboards and more proprietary applications that supposedlyoffer richer analytic capabilities. Some consultants even saythat the only way to improve budgeting and planning efficien-cy is to eliminate spreadsheets altogether.Robert D. Kugel, vice president and research director,financial performance management, for Ventana Research,wrote in Business Performance Management's June 2004 issue,"Although spreadsheets are great for ad hoc analysis thatinvolves only one or a few people, they're fundamentally
24 Business Performance Management March 2005unsuited for enterprisewide collaborative efforts such as budgeting and planning at the levelof detail corporations require." Budgeting and Granted, data accuracy and workflow management are both legitimate and serious areas of planning are concern for spreadsheet users who participate in collaborative planning and reporting process-es. However, it's a mistake to assume that these concerns require companies to abandon the synonymous with familiarity and flexibility of Excel. A number of BPM software vendors are focusing on equip- the spreadsheet, ping their products with an Excel-based front end as an alternative to their product's primaryuser interface. Some are even leveraging Excel as their solution's core planning and reporting and software vendors'environment. marketing campaigns
Give the People What They Want aren't going to One powerful reason to choose a spreadsheet-based BPM system is the fact that users sim- change that.ply like Excel. Many finance professionals are so accustomed to using Excel to manage theircompany's financial and operational performance that switching to a new, proprietary interfacewould be an uncomfortable transition, at the very least. Let's face it: Budgeting and planningare synonymous with the spreadsheet, and software vendors' marketing campaigns aren'tgoing to change that.Familiarity, accessibility, and functionality are all good reasons why the spreadsheet lives on.Excel's user interface is rich. Its formatting is flexible. And it gives users many options forenhancing the look and feel of budgets, forecasts, reports, and plans. Key is the fact that every-day workers already know how to use Excel. Gaining user buy-in - a notable challenge for justabout any type of software implementation - can become much less daunting when users arealready familiar with the application's front-end environment.Of course, saving time and cutting costs are two more reasons why Excel-based solutions areattractive. Nearly every business desktop already runs Excel. This in itself can dramatically reduceclient-side rollout requirements from a time, cost, and resource perspective. In ... [download for more]