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Quantrix recently unveiled Quantrix 5, an updated version of its financial modeling software designed to fill the gap between spreadsheets and business intelligence (BI) systems. Quantrix provides users with many of the capabilities of an enterprise system and addresses shortcomings of desktop spreadsheet software without requiring extensive training.

Quantrix 5 offers numerous improvements and refinements. For example, it provides easier connectivity to and integration with enterprise databases. Licensed users have been able to share the reports they create with anyone using its Quantrix Qloud web reporting service, but new ease-of-use features such as stored contacts facilitate collaboration, and richer display options offer more useful and attractive charts and canvases. It’s now easier to create reports that present multiple graphical elements, including ones that enable casual users to make adjustments to key assumptions and instantly see the impact on a variety of key performance indicators. Help files are more robust and easier to update. There are more scripting options and significant refinements that give users better control of formatting and presentation.

Quantrix addresses a persistent gap in the software market. The electronic spreadsheet is an extraordinarily versatile tool, but our research shows spreadsheets have numerous shortcomings. People have had to cope with and adapt to spreadsheet issues because practical alternatives have been limited. Those using spreadsheets for planning, budgeting, forecasting and analysis, for instance, must deal with limitations and productivity issues whenever they are dealing with multiple participants, products, business units and scenarios (which is to say all of the time). Spreadsheets are simple enough to create, but they quickly become unwieldy as (inevitably) changes occur.

Quantrix allows business analysts to work easily in multiple dimensions. Business is inherently multidimensional since executives and managers need to look at past results or future plans from a number of different perspectives (dimensions) such as by products, organizational structure (sales regions or business units, for instance), currency or slices of time (monthly, quarterly or annually).

Being able to work with dimensions is useful in creating business models because you can change some assumption and have your change quickly, completely and accurately reflected across an entire model. For example, when month-by-month product prices or commodity costs change, it’s possible to make appropriate adjustments once and have them ripple through all aspects of models. Or, when creating multiple scenarios, it becomes possible to look at the results of a specific product in a specific region side by side with others without have to regenerate the model multiple times.

Quantrix also separates business logic from the data itself. Users write formulas outside of the cells, substantially cutting the number of formulas that need to be created, reducing errors and the amount of time needed to check and audit the model. This approach also allows modelers to make changes to the data or add new dimensions without having to laboriously modify the model. Different versions of the plan can be another dimension, allowing executives to quickly compare different plans and zero in on the major sources of those differences. When reorganizations are planned or when they occur, separating logic from data makes it relatively straightforward to see the impact of changes and be able to do apples-to-apples comparisons after the fact. To be sure, other kinds of software can address all of these issues – business intelligence tools and a wide range of applications, for example. Yet almost all require the involvement of IT departments and heavy doses of user training. Quantrix enables finance and business users with computer and spreadsheet skills to achieve significant gains in productivity, agility and insight well beyond the capabilities of the spreadsheet models they now use.

Over the past decade Ventana Research has consistently pointed to solutions that address the inherent shortcomings of electronic spreadsheets. Electronic spreadsheets were a tremendous innovation when they were first introduced in 1979. They are used worldwide by hundreds of millions of skilled users every day for almost every conceivable task. Yet it is precisely this versatility that pushes their use from their sweet spot as an ad-hoc, individual productivity tool into areas where they fall short because of inherent technological limitations.

Quantrix is a modeling and analysis software tool that I believe average businesspersons can quickly pick up and use without extensive training. (Like anything else, though, users will get back the effort they put into developing their skills at using the software.) They can use the software for forecasting, planning, budgeting and modeling in ways that can dramatically improve their productivity, agility and insight compared to performing these sorts of tasks using a spreadsheet. I recommend that anyone in a business planning or forecasting function who is currently using a spreadsheet give Quantrix a try. To make it easy, the company offers a 30-day free trial.


Robert Kugel – SVP Research

One trend in business software that’s still in its early stages but gathering momentum is the availability of modeling tools that fill the gap between desktop spreadsheets and enterprise systems. Granted this “early stage” has been under way for quite some time, but the technology has finally progressed to the point where I expect it to get increasing market traction.

The temptation for business modelers and analysts is that it is very easy to create models using spreadsheets like Microsoft Excel. Tens of millions of people worldwide are trained in using spreadsheets, so it’s often a default choice. Desktop spreadsheets are handy because they make it simple for anyone to translate their concepts into a computer model. As someone who has done this for more than 30 years, I can attest that analysts skilled in using spreadsheets mentally frame business issues and relationships in a grid structure. It’s relatively easy, for instance, to create a dynamic integrated income statement, balance sheet and cash-flow model in a spreadsheet; it’s a laborious process to construct one using a relational or multidimensional database. Yet especially where complex calculations are used or where the models involve more than a few dimensions (more on this below), models created this way are error-prone and “brittle,” which means that they break quickly when someone tries to make a change to the original construction.

In contrast, more sophisticated business intelligence tools or dedicated enterprise planning applications, which can produce more powerful and flexible models, have required formal training. Although some individuals and/or companies have been willing to make the investment in such training, the majority have not, opting to keep using spreadsheets. I suspect the main reason is that the amount of training required and the frustration that most spreadsheet jockeys encounter when changing to a new tool have been too great. As well, there is a network effect in reverse: In any organization where many or even just several people share a model, all must be trained in using a tool or its usefulness is substantially diminished.

To be sure, the problem – and solutions to address it – is not new. For example, Essbase was developed in the 1980s partly to address the above issues. However, Essbase has been lightly adopted by purely business or financial analysts because of the training it requires. More recently, Microsoft has offered an Excel Server that can address some – but not all – of the shortcomings of shared desktop spreadsheets. (Note that for many companies this will require purchasing new versions of Microsoft Office and Microsoft SQL Server.) And the rise of model-building alternatives is part of a broader adoption of more powerful but easier-to-use alternatives that fit between Excel and enterprise systems. For example, BizNet Software offers what I would call an enterprise spreadsheet for more sophisticated reporting on other business applications using its in-memory computing technology.

So what is it that makes me see the barriers to going beyond spreadsheets for modeling beginning to fall?

One reason is that organizations increasingly want more value from modeling and analyses. Spreadsheets are easy to set up, but as well as being error-prone and producing brittle models, they have other inherent flaws that limit their overall effectiveness when they are used to support repetitive and collaborative business functions. For example, they lack referential integrity, which means that adding rows and columns creates issues when multiple spreadsheets must be collated. Another is that they can readily handle two or three “dimensions” but grow exponentially harder to work with as modelers try to add more. Dimensions include time, corporate structure (divisions and business units), organizational structure (functions and roles), product lines, customers and currency, to name some of the more common ones, which obviously can overlap. Businesses are inherently multidimensional, so to be truly useful for assessing outcomes, choosing between options and making plans, models and analyses must be structured to reflect the various dimensions. Nor do spreadsheets compare well to in-memory computing, an increasingly popular technology that allows for more interactive interplay with models. This means, for example, being able to do detailed what-if analyses rapidly while in a business review meeting in order to determine what to do next about some opportunity or issue. Desktop spreadsheets seldom can do this interactively at a detailed level.

To get more value from modeling and analyses requires changing the balance of the work that business analysts do. Today, analysts spend too much time on the mechanics of analytics and modeling and not enough on analyses and their implications for the business, as our analytics research shows. A main reason for this waste of time is the limitations of spreadsheets.

The other reason I expect the barriers to change to fall is that the alternatives to spreadsheets are increasingly easier to learn and use. One example is Quantrix, which has been around for a decade and therefore was early to a market that has been slow to develop. It is one in the latest round of new tools that attempts to fill the gap between spreadsheets and enterprise BI and analytic applications. Quantrix requires training, but in my judgment, it’s not hard to pick up and not difficult for business analysts to adapt their spreadsheet skills to building models in this tool. Another example is Anaplan, which my colleague Mark Smith commented on. It is designed to replace spreadsheets in operational planning functions (such as sales operations or demand planning, to name just two) as well as in financial planning and budgeting. It, too, offers modeling capabilities that are more powerful and more flexible than spreadsheets yet not difficult for business analysts to learn.

I believe a lack of awareness of what’s possible is a major barrier to analysts adopting more capable tools for modeling, forecasting and reviewing. As the number of products that address the inherent limitations of desktop spreadsheets increases, marketing efforts in this area are going to gain attention. Companies are going to realize that they can achieve greater awareness and better decision-making if they have a more effective approach to modeling and analysis. There will always be a need for desktop spreadsheets, which serve the needs of tens of millions of users daily. But these tools no longer need be a barrier to modelers and analysts being able to do a better job of doing what they are hired to do: model and analyze.


Robert Kugel CFA – SVP of Research

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