Spreadsheet Hell

CFOs are interested in the many new technologies being pitched to them, but are they really trapped in spreadsheet hell?

But the innovation gap our survey uncovered does not stem only from caution in the face of new business requirements. Broadly speaking, finance executives appear to be largely content with the technologies they have today: 72 percent say they have most or everything they need in the way of finance IT. And the much-derided spreadsheet, so often posited as the dinosaur that newer technologies will ultimately make extinct, is not heading for the tar pits anytime soon. Every single company we surveyed uses spreadsheets today, and a mere 9 percent think they will decline in importance in the coming years (see “Spreadsheet Purgatory?” at the end of this article).

Companies have also learned, after much expense and pain, that technology is only part of the solution, and sometimes not a particularly big part. Technology really works, says Fisher, when it “helps you slough off old ways of doing things, when it helps you discover and adapt better processes. That’s when you get great efficiencies. But the latest technologies, in and of themselves, don’t make you more productive.”

Change Is Coming

This lull in technology adoption won’t last forever, though. According to the survey, companies do plan to start adding new finance IT. Eighty-two percent say that within five years their finance departments will rely on a mix of current and new technologies, and 13 percent say they will rely primarily on new technologies.

One reason is that spreadsheets — useful and beloved though they are — will soon force a change for many companies. While they can satisfy many needs in small, stable organizations, they can become a major burden for larger companies. Indeed, while only 33 percent of respondents with revenue under $100 million say that “spreadsheet hell” is a fair description of what goes on in their departments, that figure jumps to 59 percent for larger companies.

“When you are an organization with less than $100 million in revenues, you can almost run your whole accounting department using spreadsheets,” says Lee Geishecker, a vice president and research area lead at Gartner. “But as soon as you run into business complexity such as industry-specific requirements, complex incentive programs on your sales side, or multinational environments, you have to move away from spreadsheets as the engine for your budgeting.” As companies start growing again, there will be pressure to fix the spreadsheet problem.

Such pressure was strong at Mentor Graphics, a $675 million provider of engineering software. A few years ago, the company’s annual planning process required rolling up data from 1,200 Excel spreadsheets — one for each cost center. “When you get that many spreadsheets, it never quite ties together,” says Jan-Willem Beldman, the company’s enterprise data architect. “On average, it was a six-to-eight-week process each year just to get that worked out.”

Today the company uses a Hyperion Essbase system with a Web-based tool that pulls all of the data into one place, automates the approval process, and allows planners to run scenarios more easily than they could in Excel. “We’re now doing the whole planning process in five months, down from what was an eight-month ordeal,” says Beldman.

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