CFOs: It’s Time to Say Goodbye to the Spreadsheet
While there have been significant changes in business models and financial governance requirements and the velocity and volume of data over the years, many organizations’ business systems haven’t changed. Our latest research reveals an incredible 60% of CFOs and finance directors still rely on Excel spreadsheets to gain access to data – even those in businesses with over $1 billion in annual revenues.
What’s wrong with Excel you ask? Plenty.
First off, they are ill-equipped to serve today’s “think fast” finance world where analytics use is becoming more prevalent. In a June 31 Twitter session, industry analyst Mark Smith of Ventana Research points out the ineffectiveness of spreadsheets and their analytics incompatibility, “Spreadsheets continue to complicate and cost businesses money,” he tweeted. They are “great for individual productivity but not for analytics across the business,” and offer “no governance of data.” Smith’s commentary stems from the results of another new research study where 58% of organizations admit spreadsheets are unreliable for analytics.
This doesn’t bode well for business, as use of analytics -- using data to enhance business performance by making more effective decisions and actively incorporating insights gained from data into business processes – is becoming vital for planning, budgeting and forecasting, to support better business strategy and execution.
Analytics offer organizations a way to derive insights and decision making from data – in a very compressed timeframe, and to understand the impact of change. This is key, as our survey results indicate CFOs are running ragged by the increasing pace of business due to digital disruption; 1/3 of CFOs polled admitted business planning and forecasting was major challenge for their organizations in 2015. Static tools and systems such as Excel less and less effective in helping increase financial productivity, as they do not take into account external data and future events.
The other big problem with Excel is that it was never designed to support collaboration – a big deficiency in today’s new era of collaboration in the office of finance, as 52% of CFOs report decisions are often made collectively, involving people outside the finance department.
Excel has been the finance person’s companion for many years, but much like a security blanket or pacifier, at some point we outgrow the need for these things, or rather our needs outgrow the thing. Such is the case with the Spreadsheet. To support smart financial strategies for innovation and growth, organizations must be able to access information and analyze it quickly to aid smart, agile decision making. The solution is to have a modern financial IT infrastructure in place that delivers the right data to the right people at the right time in the right way – providing a solid data decision framework.