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The spreadsheet is one of the five most important advances in business management over the last 50 years. It has changed all aspects of running an organization. It was the original “killer app” that made people go out and buy personal computers. So you see I’m enthusiastic about spreadsheets, but I realize they have limits that must be respected to vr_ss21_spreadsheet_maintenance_is_a_burdenwork efficiently. One of the more important findings from our benchmark research Spreadsheets for Today’s Enterprise was about the time spent in maintaining spreadsheets. We asked participants how much time they spend per month in updating, revising, consolidating, modifying and correcting the spreadsheet used in the most important process associated with their job. The answers varied depending on the intensity with which people work with spreadsheets. On average, the heaviest users – those whose work requires them to spend all or almost all of their time using them – spend 18.1 hours per month on maintenance – the equivalent of more than two days per month! Even those who spend more than half their time in this fashion use up nearly two days (15.7 hours). For a tool designed to enhance personal productivity, these results should be sobering to executives and managers.

The heart of the problem is the comfort factor. People are so familiar with and in many cases so adept at using spreadsheets that they overlook or minimize their inherent problems. Spreadsheets make it easy for individuals with no IT skills to translate their ideas into analytic business models, capture data and create reports with that information. For experienced users, they are easy to design and set up. Many find them preferable to more formal methods used by the IT department or another third party. Spreadsheets give users autonomy. Indeed, a majority (56%) of our research participants said it takes too long or far too long for their IT department to create or modify a report.

That’s the upside. Problems arise when spreadsheets are used in collaborative, repetitive processes. Desktop spreadsheets are error-prone and have cost companies billions of dollars. One problem is that they bog down quickly. Our finding about time spent in maintaining spreadsheets illustrates another major defect with spreadsheets: The time saved in setting them up is more than offset by the time spent using and taking care of them.

Our research and experience have identified several factors that cause people to underestimate the negative impacts of spreadsheets on productivity. Generally, while the consequences of problems with spreadsheets can be various and persistent, they are rarely catastrophic and infrequently serious. Thus, while people may be aware that they are losing time, each loss is a small one and may be forgotten soon. Moreover, people (especially heavy and/or long-experienced users of spreadsheets) who have adapted their work styles to deal with these issues may not view this chore as interrupting productive work. People used to dealing with spreadsheet hassles also may think that their job includes fixing such problems. As well, senior executives and decision-makers are not likely to be concerned by the increments of time in which spreadsheets occupy people, especially since those whose careers go back to the beginning of spreadsheets still perceive them as productivity enhancers relative to paper-based systems. In other words, people are in denial about the issues they face daily when they misuse desktop spreadsheets.

Today, companies have more options than ever before to embrace and extend spreadsheets – to have the best of both worlds. There is a variety of new, affordable software to complement spreadsheets and address their shortcomings. Many applications use Excel as their interface – giving users the same familiar look and feel – while addressing key technological shortcomings of desktop spreadsheets that make them error-prone and difficult to consolidate or roll up. In short, there are many ways to make a core business process function better by replacing desktop spreadsheets with tools better suited to the task. Not all of these products are provided by large vendors, so you may have to find them yourself.

The next time you find yourself debugging a spreadsheet, dealing with maintenance issues or trying to find the source of some error in one, consider that there is a better way that doesn’t necessarily mean migrating to software that requires ongoing IT involvement. Take a look at the large assortment of spreadsheet replacements on the market; you should be able to find one that solves your problem.

Regards,

Robert Kugel – SVP Research

I’ve been using spreadsheets for more than 30 years. I consider this technology tool among the five most important advances in business management of the 20th century. Spreadsheets have revolutionized many aspects of running an organization. Yet as enthusiastic as I am about them, I know the limits of desktop spreadsheets and the price we pay if we fail to respect those limits. The essential problem arises when people use desktop spreadsheets for purposes beyond what they were originally designed to do. Desktop spreadsheets were designed to be a personal productivity tool, and they are good for prototyping models and creating analytics used in processes, performing one-off analyses using simple models and storing small amounts of data. They were not designed built to be used to manage or support repetitive, collaborative enterprise-wide processes. As a rule of thumb, when a spreadsheet is used by more than six people six or more times, it’s time to look for an alternative. Otherwise, errors and inconsistencies easily creep in and undermine the accuracy and value of important data.

But long-time business users, especially the most skilled ones, keep on using spreadsheets inappropriately. They often rationalize continued use by insisting that the ease with which they can create spreadsheets is a reasonable trade-off for the problems they routinely encounter (especially errors and excessive time spent maintaining shared spreadsheets). As well, these persistent users typically believe that alternatives to desktop spreadsheets are too expensive and require substantial training. But this view is out of date. Today, there are relatively inexpensive spreadsheet alternatives that address their common shortcomings and are designed for business users, not IT professionals.

One area where spreadsheets are commonly misused is as a “data off-ramp” vr_ss21_business_intelligence_and_spreadsheetsfor business intelligence and other systems, leaving the highway of reliability for a back road that is hard for others to follow. Our recent benchmark research Spreadsheet Use in Today’s Enterprise found that three-fourths (74%) of companies use spreadsheets and BI systems frequently or all the time. This also applies to other enterprise data sources such as ERP or CRM systems. Ad-hoc analyses or reports, prototypes and exploratory models are examples of work that’s probably best done in a desktop spreadsheet. And many of those who use a spreadsheet as a data off-ramp are not abusing the technology. However, when people use desktop spreadsheets to repetitively create analyses and reports that they share with others, they are creating a problem. Downloading data from an enterprise system into a spreadsheet severs the connection between the source system and the report. This is a root cause behind inefficient processes that ultimately blunt the effectiveness of company executives and managers. It also can present governance and compliance issues since these spreadsheets may not be controlled and therefore may not represent the source information properly and may contain material errors.

What people usually find missing when they employ desktop spreadsheets as an enterprise system off-ramp is revealed in the top three vr_ss21_most_wanted_spreadsheet_capabilitiescapabilities that research participants find absent in their spreadsheets. Heading the list was the ability to make real-time connections to company data from within the spreadsheet, cited by three-fourths. Dumping BI system data into a spreadsheet model and/or a report is handy and expedient, but doing so severs the link to the source systems, rendering the data static. Maintaining the link to data ensures that those viewing the numbers are seeing the most up-to-date version. It cuts down or even eliminates the time spent recreating the analyses and reports to produce an updated version and reduces the probability that people will be looking at different versions of the report. Nearly as many participants said they’d like to be able to drill down into the underlying data when using spreadsheets. Again, by severing the link to the source data and lacking multidimensional links to that data, users are unable to uncover the numbers that are behind the numbers in their static spreadsheet. This same root cause is behind the desire by almost as many (72%) who want decision-makers to be able to refresh and filter the reports that they receive.

The most interesting fact about these research findings of what users would like to have in spreadsheets is that these capabilities are already available in software that is easy to use and, for many companies, affordable. For many years desktop spreadsheets were the only solution, but today inertia is the main reason why more organizations aren’t using spreadsheet alternatives. Few people are aware that affordable and easy-to-use alternatives to desktop spreadsheets exist, and fewer still are looking for them. Companies – especially their finance departments – need to find ways to automate mechanical repetitive tasks to free up resources for more useful and productive activities. Desktop spreadsheets are an indispensible tool, but they are not capable of doing everything well. There are a wide array of applications that can help – you just have to look for them. We recommend making that effort now.

Regards,

Robert Kugel – SVP Research

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