Replace Excel with a Dedicated Planning, Budgeting and Analysis Solution

But make sure that moving away from spreadsheets doesn’t land you back in the same spot.

I read a recent article on TechTarget.com titled “How to know when it’s time to dump Excel for BP&F software”, authored by Linda Rosencrance. It lists and explains seven distinct signs showing that it is a good idea to move away from spreadsheets to a more robust and dedicated planning, budgeting and analysis solution.

The seven compelling points mentioned in this article should be enough to convince any person who is responsible for developing and maintaining a corporate budget that other, much better tools exist for use in this important process. Finance management should also recognize the drawbacks inherent in a spreadsheet-based process and push for an immediate change.

In recent years I’ve seen many organizations of various sizes make the transition. I’m also seeing an interesting phenomenon developing:  While the change away from spreadsheets is fundamentally good and meant to result in positive benefits to many individuals and several finance functions in the company, there are solutions on the market today that, in my opinion, entirely missed the point of developing a non-spreadsheet, dedicated planning, budgeting and BI software application.

On the surface it seems that moving the application into a database environment is the right thing to do; however, beneath the surface there seems to be something very obvious:  Users are still required to design and place formulas, functions and links in various places in the application in order to build a model and get meaningful results. In a sense, this is quite similar to working in a spreadsheet-based environment with its many pitfalls and shortcomings, some of which are:

  1. Substantial programming of formulas and links, with or without the help of outside consulting. Inevitable introduction of programming and formula errors into the model.
  2. Complex and cumbersome maintenance of the model, especially if there are changes to the business (e.g., new product lines, locations, mergers and acquisitions).
  3. Systemic and comprehensive internal control environment (change management) must be maintained in order to mitigate risks inherent in use of formulas, functions and links in spreadsheets used for financial applications. This is unlikely to exist even in larger organizations.
  4. Costly implementation, considering substantial outside consulting and company employees’ time.

For the reasons mentioned above I always encourage users to fully evaluate the different options they have once the decision to move away from a spreadsheet method has been made. Just moving away from spreadsheets may be very compelling for the seven reasons given in the referenced article, but unless the alternative is carefully researched, companies may find themselves in the same situation they were trying to get away from in the first place.

Readers of this blog know that I’ve been writing about a specific solution I like: Budget Maestro from Centage Corporation (www.centage.com), and for a good reason (actually many good reasons).  One of the main reasons I like this application is that it is a true departure from use of spreadsheets.

It is evident to me that the designers of Budget Maestro made a conscious decision to not only rid this process from use of traditional spreadsheets (for the obvious benefits listed in the above TechTarget.com article), but also to never force users to apply a single formula, function or link in the entire product. To me this is a very significant departure from the traditional process, including many of the database-based solutions. The four solution shortcomings listed above simply do not exist with the use of Budget Maestro.

Knowing that Budget Maestro is a comprehensive product with several pre-programmed dedicated business modules, and not having to input a single formula, it makes it so much more appealing to anyone thinking of moving away from spreadsheets.

And this makes it very hard to come up with a reason why this product, and perhaps other solutions (I personally have not seen any yet) that are a true departure from spreadsheets should not be selected.

Leave a Reply

Your email address will not be published. Required fields are marked *