The tyranny of spreadsheets
As a former sales and marketing guy I am more than familiar with spreadsheets as a not-so-good tool for managing the avalanche of data generated by the front office even before the big data craze. Name a department or function in business and you can easily find someone using a spreadsheet to manage it—often poorly but through no fault of their own. Consider this list: financial reporting, revenue management, professional services automation, human capital management, compensation management, contract management, order fulfillment, CPQ, inventory management, supplier management, and I am sure there are more examples.
Spreadsheets’ shortcomings are well known. They capture a moment in time and when you change the data in a cell, it’s a new deal—there is no database supporting the data so there is no historic record of anything unless you go through an elaborate process of saving repeated versions of each spreadsheet. If you do that, good luck reconciling anything.
CRM fought the spreadsheet wars at the beginning of the century with SFA gradually replacing spreadsheets in about half of all sales organizations. That’s right half, I bet you thought SFA’s penetration rate was higher but there’s still a lot of white space. CRM or SFA were relatively easy things to sell. After all SFA dealt with revenue generation and who doesn’t want to improve revgen?
But there are large numbers of business processes, especially in the back office still under the weight of spreadsheets (see above), despite the fact that there are now quite good applications to support them.
This point was brought home to me last week when I was invited to serve as a judge for FinancialForce.com’s Customer Excellence awards to be given out at Dreamforce. I don’t know who won so don’t ask. But in use study after use study I was both impressed and a bit taken back by the number of business processes these companies had relied on spreadsheets to perform. They replaced spreadsheets with inexpensive cloud apps and all of them came out winners.
What was most revealing to me though were the impressive results that came from freeing a business from the overhead of recording data in spreadsheets, managing the sheer number of them, extracting information and compiling reports all through brute force methods. Companies routinely reported enormous reductions of time and costs resulting in better information flow to managers, more timely responses to customers, and ultimately greater profitability in part because things didn’t go missing.
In the old days you could look at all of this and say, yes, but a spreadsheet is virtually free and software to run in my data center is a million bucks. It was a persuasive argument.
Curiously, I think spreadsheets have filled their niche for so long precisely because they filled it well. It’s the niche that’s changing and that’s causing big problems. Spreadsheets with their snapshot view of reality turn out to be just right when you operate in a transaction environment. They record the data of the moment in time when the transaction took place before everyone moved on.
But today we’re transitioning aggressively into process orientation and data needs to be collected throughout a process so that analytics can assess the next best offer or action. These are all things that require more data and that spreadsheets are bad for.
The introduction of cloud computing and software platform technologies has made having access to competent applications cheap and easy. Moreover if you still want to build rather than buy, development on a platform has never been easier. This isn’t a column about Salesforce per se, but go to Dreamforce and look at all of the components available in the Lightning product set for rapid codeless application development.
Now with a solid knowledge of a business any businessperson can define an application as easily as that same person might have developed a spreadsheet just yesterday. The payback that businesses are likely to reap from adopting a platform strategy and using development tools and point solutions built for the platform is potentially huge. I think of it as the next big iteration of IT, the next automation revolution that will boost profits and drive productivity. A release from the tyranny of spreadsheets is a revolution indeed.