The thirst for business information and data analytics continues to increase at a staggering pace. The way we interact with and access business information is quickly transforming job responsibilities for finance, operations, and technology executives worldwide.
"It’s time to stop ignoring the ‘elephant in the room,’ and focus on integrated solutions that enable one version of the truth"
Today, enterprises require actionable intelligence extending beyond traditional general ledger and financial statement reporting to remain competitive in the global marketplace. Executives must leverage information that aligns customary financial data with up-to-the-minute operational metrics for more informed, strategic decision-making.
While many companies have invested in sophisticated financial management solutions for more informed, strategic decision-making, a large portion of finance offices still heavily rely on Microsoft Excel. The software has long been a powerful line item capture tool used for calculations, graphs, and statistical analysis.
However, in reality Excel is limited in its ability to support informed analysis and drive organizational efficiencies. Unfortunately, Excel does not work as a tool for providing uniform reporting and insight into the relationship of key business drivers. Yet, many accounting and financial executives continue to heavily rely on Excel for budgeting, planning, and business performance management.
Therefore, Excel has become the “elephant in the room” – meaning that while everyone still uses it, nobody can ignore its pitfalls.
As data grows – and globalization, regulation, and reporting requirements add more complexity to organizations – CFOs and CAOs can no longer focus solely on financial reporting and transaction processing.
Finance executives will be forced to address “the elephant in the room” and migrate to more a robust, sophisticated enterprise solution that helps drive growth, efficiency, compliance, productivity, and business insight.
The following highlights three core realities of using Excel, which reinforces the need to use the right technology for today’s environment.
The reality is that Excel serves more as a line item capture mechanism than a sophisticated modeling solution, or interlinking of those components.
For example, if you have one centralized model that’s both globally accessible and offers transparency into the drivers of business results, then you should be able to model these scenarios over the next five years. Excel is not the ideal tool for modeling out these scenarios and variables – and the impact they will have on your business.
Effective financial reporting requires many more resources. Since Excel is essentially spreadsheet software, it does not serve as a complete reporting solution.
Whether you are reporting to investors, analysts, banking institutions or other key stakeholders, it’s all about setting the right expectations. Any deviation as a result of human error in using Excel can critically impact everything in the business, from compliance with bank covenants, to the share price and even the overall valuation of a company. Although the software is nearly ubiquitous in most finance departments, most organizations have unstructured and inefficient processes that involve Excel.
This is an accountability challenge that no financial executive wants – or should have to – face in this day-and-age.
Many financial executives have logged countless hours working on an Excel spreadsheet to only find they were using bad data, or experienced a formulation error. On top of the frustration and embarrassment that occurs when this happens, there are also the monetary costs of the time lost.
In addition, virtually every aspect of using Excel requires manual effort. This includes gathering and verifying data to constructing formulas, charts, and graphs to the time required distributing the spreadsheet to stakeholders. As a result, a tremendous amount of valuable time is spent focusing on tactical utilization rather than strategic imperatives.
The Big Picture: One Version of the Truth
Excel is the “elephant in the room” since it serves as a barrier to monitoring and enhancing business performance. The software makes it difficult for companies to operate across a shared vision based on the same set of information – making it a challenge to operate based on one version of the truth.
Operating on one version of the truth requires a completely uniform approach to modeling, reporting and developing analytics – grounded in consistent data. Fortunately, there are new technologies and innovations that have bypassed Excel that can ultimately transform businesses via effective management, analysis and insight.
Today’s finance executives are faced with formidable challenges every day as they address evolving global reporting requirements and challenging regulations. In order to effectively meet these challenges, finance executives need to provide the insights and solutions that positively impact overall revenue growth.
Clearly, it’s time to stop ignoring the “elephant in the room,” and focus on integrated solutions that enable one version of the truth.