One thing I've noticed when walking through Finance departments is the sheer volume of Finance professionals that use Excel. This is not Finance teams where users are reviewing or reading data in Excel, the users are actually writing macros and formulas to obtain the data and the results they require. Over time it has struck me that highly skilled Finance professionals are focusing more of their time extracting and manipulating data, rather than analysing data, spotting trends and providing advice.
All of the customers I visit use SAP in some shape of form. They might use the full suite of SAP products, or a sprinkling of SAP systems mixed in with non-SAP systems. Data will be recorded in an ERP system (normally SAP ERP) and data is extracted to a data warehouse. Reports can be generated from the ERP system, or queries run from the data warehouse. Normally there will be standard reports that are run at regular intervals (daily or periodically) and these should be seen as the core of the reporting requirements. There will always be an appetite to run ad-hoc queries and reports and there is a perception that to achieve that it is easier to download into Excel rather than use the SAP toolset to create them.
Why do people want to use Excel?
Excel is an easy to use program to manipulate Financial data. Data is easily extracted into an Excel format, and can be filtered and sub-totalled and formulas can be used to provide a customised view of the data. To a Finance professional the ease of use is the most attractive part of the program and the main reason why they feel comfortable working in Excel. Some of the standard SAP reports, mainly within the ERP system are not deemed to be user-friendly and they are not to attractive. The perceived time to create ad-hoc reports is also a key decision to use Excel.
What are the issues with Excel?
Excel is designed to be a "personal use" tool. By this I mean, once data has been extracted visibility of the data is restricted in the main to the person who has the worksheet, the data will be out of date, and data can be deleted or amended by accident. Assuming that on occasion more than one individual wants to use the same data for an ad-hoc query and they have both manipulated the source data it is safe to assume that the final output of their reports and worksheets may be different. This leads to a common situation where two individuals are claiming that a key figure (such as product profitability) is different which will not only confuse each other, but the others attending the meeting. Having more than one version of the truth is dangerous as it put doubt into the minds of their peers. The cause for the issues could be as simple as the data was downloaded at different times, rows being deleted or amended, or formulas to calculate key metrics being different.
Why Financial professionals?
The benefits and issues of Excel can be seen to be common to other departments. The real concern I have is the utilisation of an individual's skills-set to perform these tasks. Let's take a step back and look the common skill-set of a Finance professional. Most will have some form of higher education qualification. This could be a university degree or it could be a lower level to that. Most if not all will have some form of Finance qualification. There is a mixture out there in the market, however full certification is a desirable skill-set. So with this in mind I am slightly concerned that Companies choose to allow these highly skilled individuals to perform what could be seen as a commodity task.
Firstly, you employ an accountant to perform a number of tasks. These tasks can be broken down into two main categories; risk mitigation (providing accurate information, identifying potential issues) and value add (providing advice and commentary as to the performance of the business).
What can be done to stop the trend?
After speaking with a number of different Finance professionals, at different levels, working in different industries and sizes of organisation there is a common trend. Data is only moved into SAP if the base reports or software to analyse the data do not provide a simple user interface. One client went further and wanted to outlaw the use of Excel, and keep all of the intelligence within the SAP product suite. Limited reports were to be created per functional area and the roll-out of tools such as SAP BW and Business Objects was to be expanded across the business to lower level power users. The reason for this shift was simple. Circa £1 million was being spent across the business pulling together reports per month. This is an extraordinarily high cost associates to ad-hoc report creation and to be fair, this included all related costs in people running reports, downloading them and so on. It is also clear, that the business would not be saving £1 million per month, what they would actually be doing is enabling their key Financial users to perform their key role around adding value and mitigating risk rather than playing around in Excel. Due to their strategic growth plans it was important to keep the existing team, but the mid-term objective was to change their behaviours and not grow the support team whilst the business grew organically.
Any switch or move away from the dependency of Excel will be more of a change management challenge than a system or process challenge. Users need to trust the new tools and understand the real benefit to the business and to them personally. Some users become protective of their personal "IP" around report creation. Breaking this thought pattern can be hard to achieve but done successfully the business and the Finance professional will grow together. Are you up for the challenge?