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For better or worse, Excel is still the number one tool for planning

A recent survey by BARC Research (The Planning Survey, March 2014) found that Excel remains the most widely used planning tool.  When asked “Which solutions do you use for planning and budgeting in your company?”, a whopping 86% of respondents chose Excel.

 

Excel report example

 

Now this doesn’t mean all 86% are solely using Excel but they are using it in some way in the budgeting process. This survey reinforces what we see when talking to companies about budgeting.  In broad strokes, there are 3 different uses of Excel:

1) Excel as primary tool for Budgeting and Planning. While the number of companies using it as the primary tool is decreasing, it is still (unfortunately) a very popular tool for planning.  It does not come without its problems.  Data inconsistencies, difficult to consolidate, linking data from various sheets and sources, version control and lack of audit trail to name just a few.

 

2) Excel used to integrate data between systems. Many companies are using a specialized tool for planning but it is often stand alone and needs to integrate with other systems to support the full process.  In this survey over half of the respondents said it was Important or Very Important to integrate their planning with other performance management processes, such as strategy management and financial consolidation. However when asked what processes are integrated, over 60% said they aren’t or they integrate using Excel.  While the planning process itself is streamlined, the use of Excel as a point of integration has similar issues as when it is the primary tool, with the added complexity of ensuring data is in the right format to receive and send to other systems.  Excel was certainly not designed to be an integration tool.

3) Excel is used to augment the specialized planning system. Even with a specialized, purchased system, companies often find themselves using Excel to augment the process.  Spreadsheets are created to handle the more ‘complex’ calculations, or scenario planning. They are also used by users to track the detail behind the budget they submit. Why? What did you pay for? Many of the specialized systems in the market are too rigid or lack the functionality needed to support the full planning process so the “nuts and bolts” of the budget are still done off-line in Excel.

 

Best use of Excel

It is understandable, and even desirable, to have an Excel front-end as part of your budget and planning solution. It lowers the learning curve significantly and encourages user participation. The key is that it should be just that - a front-end. The specialized solution you pick should take advantage of Excel’s strengths but not be dependant on it.  It should provide the functionality you need to do ‘complex’ planning that involves advanced allocations, scenario planning, cash-flow planning, and product profitability analysis at the database level so that you don’t have to build this into Excel. It should also give the end-user the ability to add the details they need to support the budget they submit.  All the data in one platform.

 

Integration - not for Excel

The other element clear in the survey, and honestly in the market, is the need for an integrated platform. Companies in this survey say an integrated platform is very important to accurately support the planning process. Strategic, operational, workforce, and capital plans are interconnected and should be done in one system.  It is time for companies to stop talking the talk and start walking the walk.  Use Excel but only for what it was originally intended.  And dig deep during your software selection process to be sure the product your choice meets your requirements today and where you need to be tomorrow.  

There is a difference between a solution that says it is adaptive, and one that is designed to adapt to the changing and expanding needs of the finance organization.   When it comes to planning you need to think outside the box because “the box” is constanly changing and you need a planning solution that will adapt and expand to whatever your the future holds for your planning process.

What are your thoughts?  How are you using Excel in your planning process?

 

Tagetik unified budgeting, planning and forecasting

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