Until a few years ago, Thule Group's North American division would have been considered a "classic spreadsheet-driven" company, according to Vice President of Finance Mark Cohen.
"We had one person in accounting who kept all the data as up to date as possible, including departmental expenses that outlined the costs of running the factory. However, it wasn't unusual for it to take a week to consolidate cross-company information, and it wasn't unusual to discover that what managers were looking at wasn't the final spreadsheet," Cohen says.
Out-of-date sales and manufacturing numbers were unacceptable for Thule Vehicle Solutions North America, a 400-person operation that makes products like roof racks and bicycle racks and generates 15% of its parent company's revenue. "Budgeting and forecasting are a big deal for us. We're a seasonal company, so we have to have product ready to go or the sale will go to our competitor," Cohen says.
Frustrated, Cohen abandoned Microsoft's Excel spreadsheet application in 2008 in favor of a software-as-a-service offering from Host Analytics. The new package, Host Analytics Budget, provided the support for real time collaboration and mobile access that his team needed.
Now users can create, edit and view real time business data and generate reports through a browser, with the number of things they're able to do dependent on their level of authorisation. The Host Analytics package includes built-in version control, data is automatically fed from the division's Oracle ERP system into Budget and can be imported and exported in Excel formats, if needed, so users can share information with colleagues in other parts of the company. Pricing starts at $250 per user per month.
Getting more reliable data
Cohen says the collaborative nature of the tool has improved the timeliness, accuracy and accountability of his division's reports because each person is now responsible for inputting his or her own data. "Ninety-five percent of our spreadsheets are gone, and we've completely eliminated the delay in receiving critical reports. Our business leaders also know that the data they have in hand is accurate and dependable," he says.
Cohen's frustration with spreadsheets is not unique. As decision-making becomes more collaborative and workforces grow more distributed and global, the days of compiling a spreadsheet, mailing or emailing it to colleagues, then manually inputting updates and re-sending it seem antiquated.
Moreover, in recent years there has been concern about user error creating mistakes in spreadsheets that could cause trouble for companies, particularly those in heavily regulated industries.
Microsoft, for one, says it has new features in Excel that address some of those concerns. For example, there are ways to enable Excel to accept real time data feeds, but that solution doesn't help when there are multiple updates from individual employees who aren't necessarily adhering to a regular update schedule.
Instead, some companies are tossing aside traditional spreadsheets in favour of more targeted software and services. Or, at the very least, they are seeking out add-ons to Excel to support real time sharing, viewing and reporting among both internal and external users and a variety of devices.
Rob Kugel, an analyst at Ventana Research, says his firm's research shows that when it comes to doing analytical tasks, nine out of 10 people use spreadsheets all or most of the time. "They use other tools as well, but, especially for general business users, spreadsheets are the default tool and have been since the 1980s," he says.
He adds that Microsoft's Excel overtook Lotus as the dominant spreadsheet in the 1990s and today has an overwhelming share of the market, with 750 million enterprise and home users.
Spreadsheets 'spread too thin'
Kugel says the problem for Excel and other traditional spreadsheets lies in the fact that they have been spread too thin, they're being used for everything from analysis to reporting to data storage.
John Burke, an analyst at Nemertes Research, agrees. "Excel and other traditional spreadsheet programs are considered the Swiss Army knife of ready data analysis, but there are limits as to how far they can go," he says. "Therefore, we're seeing a lot of shaving off of what they are made to do into specialised packages such as project management suites or higher-end data analysis."
Drew Sellers, president of the Utah Flash, an NBA Development League franchise, says he had been consistently frustrated by Excel's limitations. "We had our spreadsheet of season ticket holders on one person's computer. Sometimes people would leave Post-it notes on that person's monitor with sales updates or email him updates. Regardless of how efficient the spreadsheet holder was, that system was completely inefficient," he says.
For instance, Sellers could never confidently say how many of the team's 1,000 season ticket holders had been contacted to see if they were re-upping or not, because the data was inherently out of date and subject to human error. "It's five times more expensive to get a new customer than it is to retain an old one, so we had to fix our customer database," he says.
Using CRM instead
Sellers ditched the spreadsheet and started using SugarCRM, a web-based customer relationship management tool. He has given role-based access to his executive and sales teams so they can instantly see a client's status. If an executive speaks with a season ticket holder, he or she can put notes about that conversation in the client's record and alert the salesperson to quickly close the deal.
Users can also run reports on inventory and provide incentives to current season ticket holders or actively pursue other prospects. Most important, Sellers says, since the system is web-based, the sales team can log onto the pay-per-user service from anywhere at any time to update critical information. "Now we are sure that no information has slipped through the cracks," he says. Pricing for SugarCRM's Enterprise edition starts at $600 per user per year, according to the vendor's website.
Spreadsheets were also creating headaches for users at Horizon Blue Cross Blue Shield of New Jersey. Each month, the insurance company had to make available customised reports for clients' disease management programmes. These reports detail cost savings, programme adherence, quality-of-life enhancements and other key measurements.
To do this, one employee had to manually compile custom data and copy it into a 13-page Excel template, according to Mike Occhipinti, manager of informatics. "Once the client base needing these individual reports reached 50, the tedious process would take almost the entire month and the person would only be able to work on that one task," Occhipinti says.