The Dangers of Excel-Only for FP&A and How to Avoid Them

Summary

In this edition, we will be covering the following items:

1. Why Excel-only is fine for very small organizations

2. When you need to start shifting to FP&A applications

3. How to make that transformation as seamless as possible

What Excel-Only FP&A Looks Like the Organization Evolves

As organizations grow, their systems need to grow with them. For early-stage companies, managing operations, planning, and reporting via Excel is actually quite effective. These organizations need time to mature their processes and, importantly, need to focus completely on succeeding in the marketplace – even at the cost of incurring some “technical debt”. However, at a certain stage, it becomes important to make investments in modernizing systems or they will become a bottleneck to business growth.

1. Teams Are Overwhelmed by Spreadsheets: As the complexity of the business evolves, the team has to put in ever more work to maintain the spreadsheets used to organize, plan, and perform reporting and analysis. This becomes more unmanageable over time.

2. Complexity Evolves, And So Does Key-Person Dependency: Because the team is using increasingly complex Excel models and tools to keep up with the growing demands of the business, the team naturally develops very strong dependencies on key players to hold the process together. This leaves the organization vulnerable to departures or mistakes by any key employees.

3. Ad-Hoc Solutions Outlast Their Utility: As new needs evolve, the team develops ad-hoc solutions. While each solution in isolation may not be a problem, in aggregate they create an unwieldy “web” of tools that cannot keep up with the pace of business.

4. The Deferred Costs of Transformation Compound: As the list of ad-hoc Excel-based tools grows and the complexity of operations increases, the cost of modernizing quickly follows. The longer organizations take to make the necessary systems investments, the higher the eventual costs will be.

How and When to Augment Your Excel Tooling with Power BI and Acterys

The goal is to make incremental investments in enhancing your processes wherever the highest yielding opportunities are. This will allow your team to build a track record of success and forma vision of the future based on a clear roadmap.

1. Teams Have the Tools and Skills to Succeed with Power BI and Acterys: Your team leverages Power BI and Acterys as a centralized platform for many core processes. Reporting and planning are consolidated and standardized as much as possible, while still providing enough flexibility to accommodate individual teams’ needs.

2. Reduced Key-Person Dependency and Increased Opportunity for Key Resources: Your team is cross-trained on the newly standardized tooling and processes and your star performers are now free to focus on higher leverage projects that will drive bigger results for the business.

3. Ad-Hoc Solutions are Effective, but Limited in Scope: Quick analysis and problem solving can still be done in Excel, but only at the team’s discretion– rather than being integral to the operations of the business. The team has the flexibility to choose the tool for any given job.

4. Transformation is Tackled Incrementally, Maximizing ROI: The organization prioritizes Power BI and Acterys projects based on ROI and identifies the highest impact (“lowest hanging fruit”) opportunities to develop momentum and build a track record of success.

Power BI and Acterys Can Empower Your Team to Grow with the Enterprise

Wherever there is too much complexity built into Excel-driven processes and those processes are reliant on a few key employees, the business is vulnerable, and processes will struggle to keep up. By identifying the painful and complex Excel-driven processes, reports, and planning that is holding the business together, your team can take a full audit of the opportunity to streamline and consolidate these processes. This will empower your key employees to focus on areas of higher impact within the business and unlock new capabilities for the team overall. Keep the following in mind, when starting this journey:

1. It is very common for incredibly complex processes, reporting, planning, and analysis to be “buried” in Excel spreadsheets that no one on the team quite understands.

2. Identifying and rooting out these vulnerabilities is a critical step in your organization’s maturity and growth. It will help you have a better grasp on your current processes and enable you to make business processes more robust.

3. Exploring Power BI and Acterys for your team is the logical next step for to solve all of these problems comprehensively.

In the Next Newsletter

We will learn about the challenges of “out-of-the-box” solutions and how Power BI can provide a logical alternative.