The Daily Grind With Traditional Software: Part One
Part One: The burden of spreadsheets on your decision-making process
At the core of nearly every finance and accounting team remains the common spreadsheet—capturing millions of data points each day. Spreadsheets are useful for housing data and incorporating formulas, working out equations, and storing basic business activity. A repository for business reporting, the traditional spreadsheet is used to collect and store data to make crucial management decisions.
However, the same process has been used for years among accounting and finance teams, who are trying to keep up in a fast-paced business environment. As file sizes grow larger, become more complex, and are shared across business units and locations, it’s critical to stop and ask two questions:
- How efficient is the spreadsheet today?
- What does the data mean?
In a 2013 study investigating the spreadsheet usage practices of business professionals, Ventana Research found that on average, survey participants spend approximately 1.5 work days per month—18 days every year—updating, revising, consolidating, modifying, and correcting the spreadsheets that they collaborate on with others. Manual efforts to manage shared spreadsheets can be frustrating for accountants and financial professionals, especially when trying to meet strict deadlines.
The same study also found that 72 percent of participants said their most important spreadsheets are the ones they share with others. 56 percent said that combining spreadsheets is a time-consuming chore. Traditional spreadsheets are not built to handle mass collaboration among users or across geographic regions. This critical information is needed to build reports, consolidate values, and create operational awareness.
Sharing spreadsheets across business units is risky. And spreadsheet management is difficult, with common pitfalls of:
- Multiple manual entries
- Repeating copy and paste
- Restricting structure and formula changes
- Circulating numerous versions
- Outdated numbers
- No audit trail
- Poor security of confidential files
Aside from the process risks associated with a system embedded in nearly every corporation, accessibility of data also arises as a concern for management and stakeholders.
According to a recent Global Banking & Finance Review article by Mike Saliter at QlikTech, spreadsheets are problematic because "information is contained in silos—making it hard to analyze information across the business, or even across different projects.”
A continuous stream of rows and columns provides little value to management when deriving meaningful analysis of periodic data. Integrating numbers from multiple, large spreadsheets to slideshow format containing graphs and charts in reports is a manual, time-consuming task with a lot of room for error. The hours spent collecting, presenting, and manipulating data cuts into valuable time the finance and accounting teams need to develop business insights.
Data drives business decisions, operations, and strategy. It’s imperative that accounting and finance teams take a step back from their clerical spreadsheet and reporting processes to identify the risks and the inefficiency of the routine entanglement of data. Business professionals must be forward-thinking. By integrating data processes and technology advances to improve core systems and drive analysis, they are providing long-term value.
This is part one of a four part series analyzing the difficulties associated with common data processing programs. To read the next three posts in the blog series, follow the links below.