In day to day work environment, you often get to hear, “I’ll just mail the spreadsheet to you”. A fairly harmless expression by itself, but if you stop for a moment to consider, it highlights a vital point, not so much a flaw but definitely a shortcoming.
Emerging technologies like Artificial Intelligence (AI), conversational bots, Digital Twins, Blockchain, Virtual Reality (VR) and Machine Learning (ML) are practically redefining the way businesses are getting more structured, accurate, definite and efficient, eliminating more scopes of uncertainty and mitigating risks of errors. Besides, the use of spreadsheet, instead of an enterprise-level resource planning software, underlines a major drawback in management as it highlights the lack of foresightedness that is required to equip the organization to battle challenges that inevitably come with gradual expansion over time.
It’s okay to love spreadsheets, a.k.a Excel…
When it comes to spreadsheets, Microsoft Excel is inarguably the most popular one. Numbers don’t lie: over 750 million people are using it worldwide to record, track and calculate. And not for no reason. It is easy to use, flexible and largely reduces dependency on the IT department, especially for storing, calculating, tracking and accessing data. Microsoft’s CEO, Satya Nadella once said, “Think about a world without Excel. That’s just impossible for me.” That’s because Excel has enabled the masses to make sense of the numbers.
But you shouldn’t love it too much…
However, while spreadsheets might be phenomenal for personal productivity tracking and arguably for small businesses, they are not designed to manage enterprises. Expanding enterprises eventually arrive at a juncture where they, albeit begrudgingly, have to admit that their dependence on Excel is not serving their business purpose adequately. There are limitations and even Bill Jelen, otherwise known as Mr. Excel, has said, “Nobody should be doing anything 100% in Excel”.
Accurate revenue recognition requires outgrowing spreadsheets:
The interview conducted by IDC Analyst Connection of Raymond Boggs, Vice President, SMB Research and Mickey North Rizza, Vice President, ERP and Digital Commerce, re-iterated that the fundamental requirements of a business changes as the company grows. It’s obvious. However, businesses don’t do it. They continue to use spreadsheets, increasing complexities of business operations which can impact tasks as vital as revenue recognition.
This is how:
- Billing process is spread across multiple sheets, dependent on manual processes which significantly increases risks of errors and frequency of delays, thereby resulting in a slow opp-to-cash cycle.
- Revenue data is scattered across multiple source spreadsheets which has to be collated manually. This magnifies compliance risk, which in turn, leads to an audit process that’s not only costly but time-consuming too.
- Maintaining expansive spreadsheets means recording customer details, project details and contracts. Over time, data integrity may get compromised in excel.
- Limitations and difficulties of reporting through spreadsheets makes it practically impossible for you to have a clear and accurate picture of revenue.
Thus, most back-office personnel managing departments like HR, Finance, Marketing and IT struggle to track the progress of each process, clear backlogs and identify opportunities leading to a mammoth bottleneck for the decision making. The challenges of errors in data entry are a grave concern as well. Additionally, in a competitive environment of today, businesses are relying on data analytics to arrive at accurate insightful decisions which is practically non-existent in spreadsheets, thereby hampering business growth.
Today’s spreadsheets can be tomorrow’s databases, with ERP:
Why spreadsheet users are so intensely attached to their files is quite understandable. After having spent weeks, maybe even months to prepare and keep them updated, it is not easy to consider not using them anymore. That’s why, the first response to a proposal to use an enterprise resource planning software or ERP, is often, “What’s wrong with spreadsheets?”
- It is important to understand that enterprise software doesn’t entirely do away with spreadsheets. Instead, it actually helps to ensure that the data that have been so carefully entered and updated in those sheets are managed well, made more secure, maintained consistently and rendered accessible across the organization. ERP ensures that the spreadsheets of yesterday can successfully be converted into databases for tomorrow.
- Executives can still export data into spreadsheets when they want to take a quick look at information or run ad-hoc analyses. Alternately, they can use the software’s built-in business analytics and reporting features to generate the same information at half the time.
- Besides reducing data entry errors, ERP also helps to eliminate repetitive data entry between users, which is a real possibility in Excel. If no one recognizes these errors, there may be a risk of the company making less than favorable decisions, based on conclusions drawn from inaccurate information.
- ERP helps to resolve collaboration challenges. Since all users draw data from a centralized source, chances of confusion are less. Moreover, computing protocols prevent the possibility for users to duplicate efforts or confuse updates to product information.
- It improves visibility and communication between departments, divisions and suppliers, which in turn, can integrate various business processes and reduce time to market, thereby improving RoI.
How can ERP serve as a critical element in getting future-ready?
ERP solutions can not only benefit those who are implementing it for the first time but also be beneficial for those organizations that are updating and adding incremental operations like HR management or CRM. In fact, some ERP softwares have built-in HR or CRM modules that can be activated or used only when a company grows and reaches a certain level and the need for enhanced coordination and collaboration becomes prominent.
Digital transformation is only effective when it is seamless and company-wide and such ERP solutions ensure that this seamlessness can be achieved by enabling capabilities to be added when the time is right. Back office has always played an instrumental role in aiding the front office achieve business goals. It’s only now that ERP is integrating the two and encouraging digitally transformed businesses to focus on the front-office and the customer experience by ensuring that back-office tasks are being conducted smoothly with enhanced efficiency and heightened accuracy.
Making the move from spreadsheets to ERP is not as much about technology as it is about strategizing for future growth. And as businesses grow they need to assess the need for newer systems. If spreadsheets are still holding your business back, now is the right time to consider implementing new age ERP software. It can be the major component of a sustainable, scalable IT strategy that evolves with your business and strengthens the foundation for future growth.