The Growing Fear of Excel and Finding An Excel Replacement

For the past 30 years, Excel has been integral to businesses everywhere.

It’s become the foundation of countless business processes, aiding in computing, financial tasks, IT projects, marketing, and much more. It’s no wonder Excel was such a hit from the start.

With its ability to process mathematical equations, store and organize data in attractive and manageable ways, and create a variety of what-if scenarios, Microsoft Excel software has long provided a critical function to businesses. Yet, many companies are now moving away from Excel in search of other, more modernized technologies.

Excel is a convoluted, out-of-date solution to financial performance management

A core reason companies are moving away from Excel is due to its convoluted nature.

1. Excel is prone to error. When entering data manually, there is always the potential for errors. Unfortunately, especially in finance, even a minor error can significantly impact.
2. Excel has low visibility. Visibility is critical to catching spreadsheet errors in business. Perhaps so many Excel errors go undetected because visibility is poor in the one-dimensional framework that Excel provides.
3. Excel is tedious. While Excel provides the ability to calculate equations, model what-if scenarios, and aid in other complex financial tasks, it does so in a lengthy and tedious manner. It relies on a lot of manual data entry, which is incredibly time-consuming and can often be more of a hassle than it’s worth.

Excel documents can be challenging to organize and share. When it comes time to compile data, you must sift through countless spreadsheets to find what you’re looking for.

It is also sloppy and difficult to make sense of. Formulas can be challenging to read, formatting is haphazard, the multiple tabs lend to endless confusion, and the graphs created can be misleading and unattractive.

While some of these things may seem minor on the surface, they all work to create a financial process that is frustrating and inefficient.

Are businesses really moving away from Excel?

Back in 2016, Enterprise Times reported about 60% of businesses in the U.S. still rely on Excel spreadsheets, while 21% are moving toward other spreadsheet software solutions.

This sentiment still rings true today, with about 76% of open FP&A roles in the U.S. seeking candidates with advanced Excel skills.

Based on those statistics, you might assume this means Excel is still a strong option in the market. In reality, most businesses, regardless of industry, feel the pain from the limitations of Excel, but many companies still rely on it for sheer force of habit.

But standing up a more robust solution is possible. Planful’s Spotlight for Microsoft Office integrates with Excel to provide instant access to accurate financial performance management data — giving you the best of both worlds.

Spotlight enables users to address on-the-fly questions and swiftly create ad hoc reports and management presentations. Since the data is sourced directly from Planful, the tool eliminates the need for time-consuming validation and manual consolidation, reducing the risk of errors.

Major Excel spreadsheet blunders that instill fear in the hearts of businesses

The increasing financial risk may be the main reason companies are moving away from Excel for corporate processes.

Countless businesses have fallen victim to fatal errors in Excel spreadsheets, which have devastated their company’s finances. Fidelity’s Magellan Fund fell victim to a particularly embarrassing and costly error.

They estimated they would make about $4.32 per share, which later turned out to be false. When entering the numbers in Excel, the accountant omitted the minus sign on a net capital loss totaling $1.3 billion, vastly overestimating the value per share.

TransAlta experienced a relatively minor Microsoft Excel error that cost them over $24 million in losses. The costly error was traced back to a simple cut-and-paste mistake in Excel, but that tiny mistake cost them a tremendous amount of capital. That’s the main problem with spreadsheets.

Bottom line: Humans are prone to manual errors, and yet, even the slightest of spreadsheet errors can impact finances.

Modern financial performance management requires a modern solution

Every CFO wants to tackle financial processes most efficiently and accurately. This is perhaps why many CFOs search for a Microsoft Excel alternative.

According to Robert Gothan, CEO and Founder of Accountagility, four out of five CFOs have cited problems in their budget spreadsheets, which is troubling and indicates that significant changes are needed. He also notes that a main issue with spreadsheets is that firms aren’t spending nearly enough time reviewing the data they create. This is perhaps the core reason so many errors go undetected.

There are countless variables today that weren’t as prevalent in the past, making financial planning increasingly challenging. Today, there are more government regulations and oversight, an increased demand for trade, which entails the need for complex currency conversions, the constantly fluctuating economy, and the marketplace is more demanding than ever.

These added variables pressure businesses, so managing finances is becoming increasingly challenging. Thus, many businesses are searching for improved methods of controlling financial allocations efficiently and accurately.

Planful: Your Excel replacement solution

While Excel may not be going away entirely, as it still provides various integral functions to businesses, it is at least making its long-foreseen departure from the world of finance.

It’s clear that Excel simply isn’t providing the solution that many modern businesses need. Instead, enterprises must become more dependent on software applications that enhance agility and accuracy.

With a cloud-based financial performance management (FPM) solution like Planful, businesses can avoid many of the pitfalls of Excel while using it as a front-end for reporting, analysis, and data entry.

The cloud provides a single platform for managing financial data, so you no longer have to manage and organize an innumerable number of spreadsheets. It enables businesses to automate a lot of their data entry, so the propensity toward errors can be drastically reduced.

In turn, businesses can also increase efficiency by reducing the painstaking process of manual data entry. Most cloud-based EPM software embraces Excel as a front-end but also comes equipped with advanced data analysis tools on the back-end. This allows for multidimensional modeling of what-if scenarios that enhance visibility to reduce oversights and errors.

Break free of spreadsheets once and for all — Get an on-demand demo to get started.