In-Depth

The Spreadsheet Is Dead—Long Live the Spreadsheet

Companies using spreadsheets alone can spend five months or more on budgeting and planning than those who use spreadsheets with other planning and budgeting tools, analyst says.

• By Stephen Swoyer
• 04/07/2004

An analyst with a prominent consulting firm recently argued that the venerable spreadsheet is obsolete when used as a tool for budgeting and planning, prompting an outcry from at least one vendor—Applix Inc.—which markets a spreadsheet-based budgeting and planning solution. (http://info.101com.com/default.asp?id=6051)

Robert Kugel, a vice-president with consultancy Ventana Research, argues that because electronic spreadsheets are inflexible and needlessly complex, they’re being supplanted by dedicated budgeting and planning tools, claiming such tools have distinct advantages for executing the budgeting and planning process.

“What you gained by going to the spreadsheet [from paper and pencil planning methods] … was that it was a breeze, it was pretty fast. But what you were also able to do was then pile on the complexity so you could actually plan and budget at a much more detailed level, so ultimately what happened was that the process became [more complex],” he asserts.

Not so, says Dave Menninger, vice-president of worldwide marketing and product strategy with Applix. “This is tackling the wrong problem, this placing blame in the wrong place,” he maintains. “We would agree that spreadsheets alone are inadequate. However, it’s obvious to us that the market has spoken—spreadsheets are a required component of every solution, every major product has some level of integration with spreadsheets.”

Patrick Morrissey, worldwide marketing manager of enterprise performance management (EPM) with BI powerhouse Business Objects SA, agrees. “I honestly think it’s a great example of a great vision in the future that does not map to reality at all,” he comments. “There’s not any RFP or RFI that we’ve seen that does not have as a mandatory requirement the ability to have Excel [support]. The number one tool for budgeting is Excel, by a mile,” concedes Morrissey: “That’s not to say that those people actually like it.”

In fact, advocates argue, spreadsheets are being used as part of a centralized budgeting and planning solution, or to complement dedicated budgeting and planning tools, which often include spreadsheet-like interfaces or functionality. “The question is not whether or not spreadsheets will exist. It’s what’s the right mix in terms of spreadsheet capabilities,” asserts Menninger.

Surprisingly, both sides aren’t that far apart on this issue. That’s because Ventana Research’s Kugel differentiates between standalone spreadsheets—i.e., Microsoft Excel used by its lonesome—and what he calls “better-than-spreadsheet spreadsheets,” such as Applix’ TM1, Business Objects’ EPM offering, and others. When used by themselves, Kugel notes, Excel and other spreadsheets provide no facilities for data security, collaboration, and consistency. But better-than-spreadsheet spreadsheets address these issues: “They are a better-than-spreadsheet spreadsheet. In other words, they do not have the data integrity and referential integrity issues that you run into with Excel, that prevent Excel from being a useful enterprise-wide collaborative tool.”

The better-than-spreadsheet spreadsheet isn’t going anywhere, Kugel stresses, but the standalone spreadsheet could—and should—go the way of its pen and pencil forebears. What’s surprising, he points out, is that many companies—even some large enterprises—are still using standalone spreadsheets to support their budgeting and planning activities. “Based on the work we did for a pretty extensive planning and budgeting study, we did that last year, we looked at about 750 companies participating in that research, nearly two-thirds of them are using spreadsheets, and [something] well more than half of companies with more than 5,000 employees still use spreadsheets, plain old spreadsheets,” he comments, adding, “There’s really no reason why a company with more than, say, 300 or 400 employees ought to still be using just spreadsheets.”

Menninger, for his part, says that the vast majority of Applix customers are using spreadsheets and TM1 to support planning applications. “The vast majority are using [spreadsheets], well over 90 percent are using it for some sort of planning application, 50 to 60 percent are using it specifically for financial planning, I mean budgeting and planning applications,” he indicates.

Even vendors that market dedicated budgeting and planning tools aren’t prepared to say that the spreadsheet’s days are numbered. For example, says Delbert Krause, director of Enterprise Planning product marketing with Cognos Inc., his company’s Enterprise Planning budgeting and planning tool includes some basic Excel support. “We’ve always had the ability in Excel to pull some data in [from] Excel, do some stuff to it, and push it back,” he confirms.

Nevertheless, at some point in the not-too-distant future, Cognos will release a point release of Enterprise Planning that incorporates more robust support for Excel. “We want to give [users] their interface of choice, so we have our own [interface], then we have Excel, which is the ultimate in flexibility in terms of how people interact with the data.”

Krause agrees that the days of the standalone spreadsheet are numbered—companies that use spreadsheets alone can spend five months or more on budgeting and planning, he notes—but says that spreadsheets used in tandem with budgeting and planning tools have a vital role to play. “Spreadsheets are still important to an organization with regard to planning and forecasting and budgeting,” he stresses. “At a personal level, a user may have a level of detail greater than what the organization has asked for [on a local spreadsheet]. What [companies] need is the ability to incorporate that [highly detailed data] into the budgeting and planning process.”