Until a few years ago, Thule Group's North American division would have been considered a "classic spreadsheet-driven" company, according to Vice President of Finance Mark Cohen.
"We had one person in accounting who kept all the data as up to date as possible, including departmental expenses that outlined the costs of running the factory. However, it wasn't unusual for it to take a week to consolidate cross-company information, and it wasn't unusual to discover that what managers were looking at wasn't the final spreadsheet," Cohen says.
Out-of-date sales and manufacturing numbers were unacceptable for Thule Vehicle Solutions North America, a 400-person operation that makes products like roof racks and bicycle racks and generates 15 per cent of its parent company's revenue. "Budgeting and forecasting are a big deal for us. We're a seasonal company, so we have to have product ready to go or the sale will go to our competitor," Cohen says.
Frustrated, Cohen abandoned Microsoft's Excel spreadsheet application in 2008 in favor of a software-as-a-service offering from Host Analytics Inc. The new package, Host Analytics Budget, provided the support for real-time collaboration and mobile access that his team needed.
Now users can create, edit and view real-time business data and generate reports through a browser, with the number of things they're able to do dependent on their level of authorization. The Host Analytics package includes built-in version control; data is automatically fed from the division's Oracle ERP system into Budget and can be imported and exported in Excel formats, if needed, so users can share information with colleagues in other parts of the company. Pricing starts at $250 per user per month.
Getting more reliable data
Cohen says the collaborative nature of the tool has improved the timeliness, accuracy and accountability of his division's reports because each person is now responsible for inputting his or her own data. "Ninety-five percent of our spreadsheets are gone, and we've completely eliminated the delay in receiving critical reports. Our business leaders also know that the data they have in hand is accurate and dependable," he says.
Cohen's frustration with spreadsheets is not unique. As decision-making becomes more collaborative and workforces grow more distributed and global, the days of compiling a spreadsheet, mailing or e-mailing it to colleagues, then manually inputting updates and re-sending it seem antiquated.
Moreover, in recent years there has been concern about user error creating mistakes in spreadsheets that could cause trouble for companies -- particularly those in heavily regulated industries.
Microsoft, for one, says it has new features in Excel that address some of those concerns. (See "Microsoft responds," later in this story.) For example, there are ways to enable Excel to accept real-time data feeds, but that solution doesn't help when there are multiple updates from individual employees who aren't necessarily adhering to a regular update schedule.
Instead, some companies are tossing aside traditional spreadsheets in favor of more targeted software and services. Or, at the very least, they are seeking out add-ons to Excel to support real-time sharing, viewing and reporting among both internal and external users and a variety of devices.
Rob Kugel, an analyst at Ventana Research in Pleasanton, Calif., says his firm's research shows that when it comes to doing analytical tasks, nine out of 10 people use spreadsheets all or most of the time. "They use other tools as well, but -- especially for general business users -- spreadsheets are the default tool and have been since the 1980s," he says. He adds that Microsoft's Excel overtook Lotus as the dominant spreadsheet in the 1990s and today has an overwhelming share of the market, with 750 million enterprise and home users.
Spreadsheets 'spread too thin'
Kugel says the problem for Excel and other traditional spreadsheets lies in the fact that they have been spread too thin -- they're being used for everything from analysis to reporting to data storage.
John Burke, an analyst at Nemertes Research, agrees. "Excel and other traditional spreadsheet programs are considered the Swiss Army knife of ready data analysis, but there are limits as to how far they can go," he says. "Therefore, we're seeing a lot of shaving off of what they are made to do into specialized packages such as project management suites or higher-end data analysis."
Drew Sellers, president of the Utah Flash, an NBA Development League franchise, says he had been consistently frustrated by Excel's limitations. "We had our spreadsheet of season ticket holders on one person's computer. Sometimes people would leave Post-it notes on that person's monitor with sales updates or e-mail him [piecemeal] updates. Regardless of how efficient the spreadsheet holder was, that system was completely inefficient," he says.
For instance, Sellers could never confidently say how many of the team's 1,000 season ticket holders had been contacted to see if they were re-upping or not, because the data was inherently out of date and subject to human error. "It's five times more expensive to get a new customer than it is to retain an old one, so we had to fix our customer database," he says.
Using CRM instead
Sellers ditched the spreadsheet and started using SugarCRM, a Web-based customer relationship management tool. He has given role-based access to his executive and sales teams so they can instantly see a client's status. If an executive speaks with a season ticket holder, he or she can put notes about that conversation in the client's record and alert the salesperson to quickly close the deal.
Users can also run reports on inventory and provide incentives to current season ticket holders or actively pursue other prospects. Most important, Sellers says, since the system is Web-based, the sales team can log onto the pay-per-user service from anywhere at any time to update critical information. "Now we are sure that no information has slipped through the cracks," he says. Pricing for SugarCRM's Enterprise edition starts at $600 per user per year, according to the vendor's Web site.
Spreadsheets were also creating headaches for users at Horizon Blue Cross Blue Shield of New Jersey. Each month, the insurance company had to make available customized reports for clients' disease management programs. These reports detail cost savings, program adherence, quality-of-life enhancements and other key measurements.
To do this, one employee had to manually compile custom data and copy it into a 13-page Excel template, according to Mike Occhipinti, manager of informatics. "Once the client base needing these individual reports reached 50, the tedious process would take almost the entire month and the person would only be able to work on that one task," Occhipinti says.
Clients access their own real-time data
Occhipinti and his team decided to port that task to SAS's Enterprise Business Intelligence Server. The Horizon team now gives employer clients access to a secure Web page with a drop-down menu that lets them automatically run a customized report on demand -- rather than just monthly -- and incorporates real-time data. Occhipinti says that in addition to making customers happier, the new system enabled him to assign other tasks to the employee who used to compile the reports.
Make no mistake, though; spreadsheet use is not yet dead at Horizon. Of the insurer's 5,000 employees, there are still approximately 500 who use Excel for budgeting and other tasks, Occhipinti says. But because the siloed nature of the spreadsheet is counter to Occhipinti's drive toward standardization, governance, version control and deduplication, he is on a mission to do away with spreadsheets as much as possible. For now, though, he is careful to reassure spreadsheet diehards that Excel add-ons and alternatives such as SAS EBI are interoperable with Excel.
Linda Imonti, lead consultant for KPMG's U.S. business intelligence group in Chicago, advises companies on how to handle BI. She says that IT and business leaders who want to banish Excel from their organizations will encounter resistance, just as Occhipinti did. "They have to understand that in most cases the use of spreadsheets is not going to go away, but that other technology can come in and be more effective for specific tasks," she says. For instance, companies that require audit trails and the ability to drill down into data on multiple levels will be challenged by Excel.
She also advises IT and business leaders to educate their users that tools such as business intelligence, CRM and project management systems are not the expensive, complex behemoths they were 10 years ago. Instead, many are SaaS-based, rapidly deployable and easy to use and administer.
Using a SaaS-based spreadsheet
At BrightRoll, a 100-person online video advertising firm, Vice President of Marketing Daryl McNutt was well aware of his users' fondness for Excel. But rather than getting "trapped" with a product that would limit them, he decided to try SaaS-based Smartsheet, which, he says, looks and feels like Excel but is more suited to his needs.
With Smartsheet, users can track projects from conception to completion, attaching relevant documents, media and notes throughout. Role-based access ensures that only authorized users can make changes, while others can view the status of the project or pertinent information in real time from a browser. McNutt also has an instant audit trail for various parts of projects, including budget and delivery, and an alert system that notifies users when deadlines are nearing or have passed.
To collaborate on Smartsheet projects internally and externally with non-Smartsheet users, he exports documents into Google Docs so they are easily accessible. He also can export data from Smartsheet into an Excel format to share with BrightRoll executives who rely on Excel. Their changes are automatically integrated back into the Smartsheet when the file is re-imported.
These interactive and collaborative features are appealing to McNutt, whose company has five offices scattered across the U.S. "Because we're all so remote, shipping a spreadsheet around wouldn't work. This way everyone is kept on the same page," he says.
He has already used Smartsheet to do the company's 2010 marketing plan, budget and creative design schedules with great success. The Smartsheet tool is "less costly" than Excel, McNutt says; enterprise licensing starts at $149 per month for 25 sheet creators and unlimited editors and viewers, the vendor says. But it "works the same for us as Excel would," McNutt says. "There is no real training time to get users up to speed. Many begin using the tool within minutes of introduction."
User frustration with Excel has not gone unnoticed at Microsoft, according to Albert Chew, the company's senior product manager for Excel. Chew says some of the issues described in this article have been addressed in Microsoft Office 2010.
"We've focused in on three key areas with this new version of Excel: business intelligence, high-performance computing and collaboration," he says. He believes customers will be happy with the faster calculations for complex models, the features that help analyze data for business intelligence and, perhaps most important, the ability to co-author spreadsheets and share them in real time.
Microsoft offers several alternatives for users to gain the centralization, collaboration, real-time viewing and version control they crave. One of their options is to use SharePoint. With SharePoint, multiple users can take a file offline from a central repository, and when they load it back to SharePoint, authorized users are notified of changes and have the opportunity to resolve and approve conflicts.
This helps ensure version control and accuracy, Chew says. He adds that users can employ Microsoft OneNote to consolidate supporting documents, e-mail messages, images and other media and manage and store them as a unified whole.
Another option is for users to post Excel spreadsheets to the Microsoft Windows Live Sky Drive, an online storage service that is accessible to all authorized internal and external users. Though this option allows for light editing, there is no version control available, Chew acknowledges.
Finally, companies can subscribe to Office 365, Microsoft's new cloud-based service, to get the feel of Office as an online service. Office 365 costs between $2 and $27 per user per month based on application usage, storage needs and other factors. Companies can create teams to view, share and perform minor edits on files via the browser. There are also integrated instant messaging and videoconferencing features to aid collaboration.
Chew admits that Microsoft still has some work to do in making the public aware that these much-wanted features are actually available today. In fact, the company is offering free Office 2010 training for users and IT teams to help people get familiar with the product, which was released last June, he says.
"We know there are companies that never upgraded to Office 2007 and are still using Office 2003. We want to make them aware of the innovations we've made in collaboration and real-time authoring," he says. He adds that Microsoft is also working closely with partners such as Reuters to provide smoother access to real-time data feeds and other critical add-ons.
No huge migration -- yet
Melissa Webster, an analyst at research firm IDC, has studied the potential for erosion in Microsoft's market share as upstarts hit the market, and she says that for the immediate future, Microsoft will remain the leader.
"I would agree that Excel has been used by many companies as a basic tool... where a purpose-built tool would have been better," she says. But there is an upside for Microsoft: Because Excel is already on a large majority of enterprise desktops and laptops, many companies don't need new licenses for it and, therefore, Excel may cost less than its counterparts, Webster says. "Microsoft Office continues to be widely used by 97 per cent or so of companies we survey each year, and survey respondents indicate they are continuing to upgrade to new versions," she says.
In other words, there are no additional fees to continue using Excel because it's part of Office and users are upgrading to new versions of Office anyway, Webster explains. Turning to alternative products would likely involve paying new fees.
But don't count out the growing list of upstarts offering tools that can handle various spreadsheet tasks. "We are not at the generation that would be ready to abandon spreadsheets yet," Ventana Research's Kugel says. But he adds it may not be too long before that happens -- and forward-thinking IT shops might want to start exploring their options.
Sandra Gittlen is a freelance technology writer in the Boston area. Contact her at email@example.com.
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