ERP Vs. Spreadsheets: A Debate Of Business Strategy, Not Technology

ERP Vs. Spreadsheets: A Debate Of Business Strategy, Not Technology

With all the chatter surrounding emerging technology – such as artificial intelligence, conversational chatbots, and machine learning – small and midsize businesses are feeling more confident about competing against their larger rivals on a level playing field. But before jumping on the bandwagon, they need to tackle their longtime reliance on one popular tool – spreadsheets.

The numbers don’t lie: Businesses love spreadsheets. Over 750 million users worldwide rely on Microsoft Excel to calculate, analyze, and present business data to support their position. And while the flexibility and speed of this popular tool are highly valued, growing companies eventually arrive at a point where their relationship with spreadsheets doesn’t make sense anymore.

According to the analyst connection interview with IDC’s Ray Boggs, vice president of small and midsize business research, and Mickey North Rizza, vice president of ERP and digital commerce research, “The fundamental needs of a business change as a company grows … managing via spreadsheet and basic accounting becomes inadequate and harder to sustain as the organization expands and becomes more complex.”

Loyalty to spreadsheets may hurt your chances for future success

For small and midsize companies that are landing deals and wowing clients, life couldn’t be better. Salespeople are pumped about growing customer interest. Business leaders are amazed to see that an idea on a cocktail napkin is becoming a revenue-generating reality. And marketers are thrilled that investments in social marketing and e-commerce are paying off.

However, back-office functions such as HR, finance, and IT may have an entirely different experience. Tracking the details of business performance and emerging opportunities with a series of spreadsheets is most likely turning a once-simple task into a headache of complicated consolidation efforts, redundant data, and questionably biased insights.

Take, for example, the day in the life of your finance leader. When your business ran a simple operation with a barebones staff, it may have been acceptable to manage tasks and monitor opportunities with every team member’s personalized spreadsheets. The finance leader would manually collect all these files and interpret the data to determine where the company was heading, if signs of risk may pose problems, and how to best leverage past successes profitably.

But as the business continues to grow, the volume of these spreadsheets increases as well. In turn, the data analytics workload piles up and falls apart – leading to a massive bottleneck for decision-making. Data-entry errors and redundancies are missed during manual data checks and processing. Information focuses on what happened in the past, not what will happen in the near- or long-term future. And perhaps the deadliest sin of all is the inability to provide insights at the exact time they are needed.   

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Marketing

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