Here are 6 reasons why your manager hates excel!
1. TEMPLATES GET IGNORED
The planning process usually starts out very organized. Finance will create a template for budget-holders, and distribute it to everyone who needs to complete it. But often, that’s where any semblance of control ends. Consolidating this information will give your finance manager a huge headache. What started out as a uniform set of spreadsheets turns into a 1000 different documents that all need to be reconciled back into one master budget or forecast.
2. FORMULA ERRORS
One of the most fundamental problems with free-form spreadsheets is that they rely on formulae that are all too easy to break or get wrong.
While the figures in a spreadsheet may look reliable, when you dig under the surface you can uncover all kinds of horrors - like incorrectly entered formulae, formulae not copied across the right rows and columns, and formulae that aren’t right for the desired calculation.
The inherent flexibility of Excel can also cause major analysis issues because of the lack of financial intelligence which comes standard in a planning application…for instance an increase in revenue should show a different variance result than an increase in costs. This type of issue causes unnecessary delays in the planning process
3. SPREADSHEETS THAT ONLY MAKE SENSE TO THE OWNER
Spreadsheets are very easy to customize, and that’s great - for the person doing the customizing. But when a lot of customized planning spreadsheets are submitted to Finance for entering into the main budget, it can be impossible to tell what information they are trying to convey.
People don’t just format the spreadsheets to meet their preferences, they also base calculations off their own assumptions, without listing those assumptions in the spreadsheet. It can be nearly impossible to understand what people meant. It may be necessary to physically go and sit down with every budget-holder and ask them to walk you through their assumptions, otherwise you could end up interpreting the spreadsheets completely wrong.
4. POOR DOCUMENT MANAGEMENT
Spreadsheets are very easy to edit, rename, save and delete - and those four things add up to a nightmare. When multiple people are saving their own versions of a spreadsheet, sometimes to their own local hard drives, it’s frighteningly easy to lose track of which version has the most accurate, up to date information. Unprotected files are easy to rename and delete, so vital spreadsheets can be lost - either temporarily (if they have an unassuming name) or forever (if they’re accidentally deleted). And that’s without even considering the data security aspects of having employees walking around with budget and forecast spreadsheets on laptops, phones and USB keys.
Another common document management issue is inadequate testing of the template before using in a live environment. This step is always difficult to pull off during an already busy day-to-day business setting but often one of the most crucial steps. The consequences often result in defects which are not able to be addressed in the master template but must nonetheless be fixed in the individual templates already being used by the various budget holders and also risks of consolidation issues once the individual budgets are submitted.
5. KEY PERSON DEPENDENCY
It’s quite common for there to only be one person in the finance function, department or budget group who actually understands how the budget or forecast spreadsheets work.
Sometimes, this kind of key person dependency only comes to light when urgent changes or updates need to be made, and the person is out sick or on vacation.
6. BUDGET-HOLDER RESISTANCE
Budget-holders do not usually enjoy the planning and forecasting process. And that means they’re not always motivated to submit timely, high-quality information. Unfortunately they see it as a chore rather than a key part of the finance process which allows management to adequately plan for the future and understand actual results.
When budget-holders aren’t committed to the process, that means spreadsheets are submitted late, they don’t have the right information, or they don’t have enough information to enable good decision-making.
In volatile times, waiting for (potentially inaccurate) re-forecasts to come through from every business unit means the business can’t adequately react to changing conditions - negating the whole reason for planning and forecasting in the first place.
Are you encountering these issues but also want to keep the flexibility of Excel?
Oracle released their new cloud planning platform "PBCS" and the best part is that it will perfectly serve both mid sized as large companies.
A nice example of a medium sized company is Tony Chocolonely who switched to PBCS for their sales forecasting.
Want to supercharge your spreadsheets and start planning like a pro? Then join us at one of our planning events at Oracle Headquarters Utrecht and find out how.
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