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How Can FP&A Get the Most Out of Excel?

driver-based planning

Excel has been quite the lightning rod recently in the wake of a Wall Street Journal article that focused on finance practitioners who are moving away from single-user spreadsheets. The reaction to the story made it clear that reports of Excel’s death have been greatly exaggerated.

Based on personal experience, this does not come as any great surprise. Why? Because even as a guy working at a Silicon Valley company that provides cloud FP&A solutions, I still see a role for Excel.

The reality is there are times when Excel is the most efficient and convenient way to get something done. Excel can be a great tool—you just need to make sure it’s not the only tool in your kit.

Watch the webcast, “10 Most Popular Excel Tips and Tricks (and When to Use Them)”

I know this from experience. At a previous job, I successfully used Excel for a whole host of FP&A duties. Yet, when I was tasked with building an entire business model on Excel, I saw the glaring limitations of static, manual processes. The end result was passable, but it had serious shortcomings in terms of flexibility and its ability to facilitate more strategic tasks such as forecasting and building scenario models.

Discovering a new tool

It was only when I joined the FP&A team at Adaptive Insights that I saw the potential to leverage and integrate Excel with a cloud-based system to take FP&A capabilities to the next level. Now I use Excel selectively as one of several strategic tools at my disposal.

So where does Excel still make sense in the modern FP&A environment? Typically, it’s very good for one-off report requests. For those asks, Excel is familiar and easy to use and generally will deliver what is needed quickly and efficiently.

Where Excel falls short is for repeating tasks, such as reports that need to be generated monthly. The same goes for data requests that require in-depth and ongoing analysis. These are instances in which leveraging a cloud solution while having Excel play a supporting role can offer a transformative path for FP&A.

As I have grown more versed in Adaptive Insights’ solutions, the many benefits of shifting from an Excel-only to an Excel-as-needed approach have emerged.

When you team Excel with the right cloud software, you can achieve an active planning process that is collaborative, comprehensive, and continuous, with many additional benefits.

Benefit #1: Time savings

I like to say that I can now do in two or three minutes what took me two or three hours to do with Excel. Yes, there is an initial investment of time to load data into a solution such as what we offer. Yet, any short-term pain is swept away by the significant long-term gain a cloud solution offers. Your reporting process becomes streamlined and more accurate.

Benefit #2: Strategic focus

Automating much of the mundane work of updating spreadsheets buys you significant hours each week that can be devoted to high-value strategic work. A cloud solution offers the capability to generate forecasts, build scenario models, and do more insightful analysis that helps better inform decision-making—and ultimately leads to better results.

Benefit #3: A single source of truth

In organizations that depend too heavily on Excel, there are frequent debates about the accuracy of the numbers. That’s understandable, considering that the numbers often live on various spreadsheets. With a cloud solution, you get a centralized data system that represents a single source of truth. You can confidently share that data via customized dashboards, knowing everyone has accurate and up-to-date numbers.

Benefit #4: Easy integration of nonfinancial metrics

A key challenge with Excel is that it’s difficult to update and integrate nonfinancial metrics such as head count. So, if a senior leader asks for an analysis of the impact of adding 10 salespeople, with Excel you would face a time-consuming task that still wouldn’t capture all of the potential impacts. On the other hand, with a cloud solution you can develop a model that updates in real time and provides insights into the ripple effect of 10 hires on all aspects of the business.

Benefit #5: Accuracy and sharing

Even the best-crafted spreadsheets have limitations and challenges. First, they are not easy to share, which often leads to emailing or printing a copy, which in turn creates the risk of outdated versions remaining in circulation. Second, Excel can be error-prone, and if those errors aren’t detected, they can compromise analysis moving forward. Cloud solutions, however, are readily shareable via customized dashboards and are updated in real time, eliminating the repetition of errors. Adaptive Insights’ software red-flags data that appears to be incorrect so you’ll immediately know there’s something you need to pay attention to.

In my many conversations with customers, no one thinks Excel is going the way of the dinosaurs. Nor should it. In fact, at Adaptive Insights we have worked hard to ensure that our software integrates seamlessly with Excel so FP&A can work at peak efficiency with the full range of tools at its disposal.

Yet, there’s growing demand for FP&A to provide a strategic and integrated view of the business, as well as forecasting capabilities. Excel can play a role in delivering on that, but it simply can’t do it alone. When you team a cloud solution with Excel, you get the best of both worlds—and make a far bigger impact on your organization’s results.

Watch the webcast, “10 Most Popular Excel Tips and Tricks (and When to Use Them)”

At Adaptive Insights we make planning easy. That’s why we built the world’s first business planning cloud–so you can make smarter decisions faster. Get business agility in a fast-moving world. Learn more here.

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