Spreadsheet Heaven.docx

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Spreadsheet Heaven

There’s a certain irony to one of the trends sweeping across the market for business performance management (BPM) tools. The humble spreadsheet — heavily criticized by makers of specialist BPM software — is making a comeback. And intriguingly, it is the BPM vendors themselves who are pushingspreadsheets back up to the coalface of finance.

For the past 25 years, finance departments the world over have relied onelectronic spreadsheets — especially Microsoft Excel — to handle tasks such as budgeting, planning, reporting, and forecasting. Accountants and analysts havegrown to love the simple, intuitive workings of spreadsheet programs, and toprize the ease they bring to business modeling. Indeed, many observers reckonthat electroni c spreadsheets were the “killer application” that drove thephenomenal spread of the desktop PC.

But as companies grew in size and complexity over the past two decades, and asthe need for better and faster information increased, the shortcomings of Excelas a BPM tool started to outweigh the benefits. For a start, spreadsheet

programs don’t scale well — they are poor at accommodating lots of differentusers, and struggle to consolidate data files from many different sources. Issuessuch as data security and workflow management are equally troublesome.

It is for this reason that a new breed of dedicated BPM software has sprung upin recent years. Playing on a theme of “Excel hell,” companies such as Hyperion,SAS Institute, Business Objects, and Cognos have all released software aimed atproviding the perfect BPM solution for finance teams. Effortlessly pulling indata from across the company, such products promised powerful analysis and

reporting capabilities with none of the challenges inherent to merespreadsheets.

But after years of bashing electronic spreadsheets, vendors of BPM softwarehave undergone something of an about-face in recent months. Rather thandistancing themselves from Excel, suppliers of BPM tools have started toembrace the arch-enemy as their new best friend.



and reporting in its budgeting software. “The system still sits on our SASarchitecture, but now the front-end has all the look and f eel of Excel,” explainsBill Lee, managing director of SAS Institute in Singapore.

Users are able to manage their budgeting and reporting in a spreadsheetenvironment, but without any of the traditional Excel headaches. For example,says Lee: “Our solution provides a full audit trail. You can see exactly whochanged a formula and when.” And rather than having lots of different staff working on many different budget spreadsheets, the union of SAS and Excelmeans that finance teams only ever have “one version of the truth”, all managedand controlled by the SAS software that sits behind the Excel interface.

Cognos took a similar step in June last year by upgrading its Excel “add -in.”Now, users of Cognos’s planning software can not only import and exportspreadsheet files, they can also run the whole planning function in an Excelenvironment. Once again, Cognos software sits behind the Excel user interface,providing the rules that govern the process, adding functionality, and managingthe consolidation and storage of planning data.

Forest Palmer, managing director of Cognos in Asia, says that using Excel letscustomers address the inevitable diversity that exists within a large firm. “By

introducing the Excel add-in, staff in different business units can take ourcentralized planning model and customize it to a much greater degree to fit theirown particular operating environment,” he says.

Russell Pennington, vice president of planning and budgeting at Trinsic, aUS$251 million-a-year telco in the United States, is a fan of the Excel/Cognoslink- up. “When your employees — including the CEO — can easily performsophisticated analysis, modeling, and planning without having to knowanything other than Excel, that completely changes the game of true, enterprise-

wide planning,” he enthuses.

Giving Excel Wings

Zarina Peperdi, vice-president of finance and human resources for SIA Cargo, aS$2.5 billion-a-year (US$1.5 billion) subsidiary of Singapore Airlines, is anotherconvert. For years, she and her team used Excel to carry out profitabilityanalysis on her company’s 80 international cargo routes. It was a gargantuantask. Every cost item, from fuel burned, to landing and parking fees at different



airports, to the cost of depreciation and operating licenses for aircraft had to be broken down for each route and matched against revenues.

But just as many other companies have found, Peperdi grew increasingly

frustrated with the shortfalls of Excel. “We were having difficulty keeping trackof who was making changes, when, and to what,” she recalls, not to mentionquestions of data security, and issues of users over-personalizing theirspreadsheets.

To help improve the process, Peperdi installed a BPM solution from SRCSoftware and went live with it in early 2004. One of her chief criteria inchoosing a BPM solution was Excel compatibility, and in SRC, Peperdi found what she needed.

Indeed, ever since being launched in the United States 20 years ago, SRCSoftware products have always used Excel as their user interface, with thesoftware primarily acting as the rules and logic that connect the spreadsheetfront-end to a back-end database, usually from Oracle or Microsoft’s SQLServer.

Tom Malone, CEO of SRC Software, says his company was often derided in thepast as being merely “Excel on steroids.” But now, with BPM vendors trippingover themselves to boost their Excel credentials, he feels it’s h e who is havingthe last laugh. “Within five years, all performance management software willhave Excel as its primary user interface,” he predicts.

For Peperdi, having a BPM package based around Excel has brought numerous benefits. There is the high level of flexibility, for one. “We need a lot of scope torun what-if scenarios, to compare different time periods, and to slice and diceour data,” she says.

Peperdi also values the ease of installing and using the new system. “People are very familiar with Excel. It took almost no training to install the software because everybody knew it already,” she notes.

As one commentator puts it: “In the past, the CFO of a company was often alsothe CEO — the Chief Excel Officer. Now it looks set to stay that way.”

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