A recent FEI study shows finance departments feel confident about their use of Excel. There’s no point in trying to pretend otherwise.
If numbers don’t lie, why can’t some recognize the truth — at least about the connection between finance departments and spreadsheets?
Data Analytics In Canada, a report recently issued by FEI Canada, is a perfect example of the difficulty some experts have in coming to terms with the way they think finance professionals should work and the way they actually do work. The statistic that jumps out right away — and raises alarm bells for some — is that 92% of those surveyed say they use spreadsheets as their primary analytics tool.
The study was covered by The Globe & Mail newspaper, which interviewed the CFO of SAP Canada, Arthur Gitajn, who immediately suggested (as you might expect from a maker of high-end enterprise software) that his peers need to evolve their thinking.
“There’s something inherently wrong with [relying on] the spreadsheet,” he said in the article. “It limits a CFO’s, and a company’s ability to know where data has come from and what to do with the information in all those columns.”
Here’s what gets buried, though: only one in 10 of those in the FEI Canada study said they have ditched spreadsheets completely, and only one from that sub-group said they were satisfied with the analytics they are currently able to do. Contrast that with the spreadsheet aficianados, the majority of whom described their analytics and reporting capabilities as very good or at least average.
The Best of Both Worlds
Even though Excel’s power and omnipresence in the finance department is undeniable, it’s not without its shortcomings. If there was one criticism of spreadsheets that’s worth taking into consideration, it was in this paragraph:
At some organizations, the use of spreadsheets remains pervasive, even among very large enterprises. Gerard McInnis, Partner, Valuations, at EY, observed that one client has one million active spreadsheets tracking different sources of information within the organization. “We’re seeing this is an issue with all of our clients, where they have to backstop their accounting and formal ERP systems with spreadsheets,” he said. “There’s a disproportionate amount of manual effort.”
No arguments here. Manual work is the biggest barrier to innovative thinking and strategy. That’s why it makes all kinds of sense to enhance analytics and reporting capabilities with the right corporate performance management tools. If most finance departments are already confident in how they work with that data on the front-end, though, why shake it?
If spreadsheets are everywhere already and they already offer a certain degree of analytics, better to build on that instead. That’s the truth many adhere to and that more people may need to hear.