For strategic planning, business must go beyond spreadsheets

Senior Marketing Writer, IBM

"Strategic planning" has become a popular buzzword in business. All too often, however, the data informing strategic planning is aggregated and presented in spreadsheets—a format whose utility is undermined by its increasing potential for error in a world of big data. When decisions have to be made quickly, and pertinent data is not available or not trustworthy, then decision makers are left to rely primarily on instinct and experience. All of which renders the entire data collection exercise somewhat academic. To make decisions that are truly data driven, you need fast access to reliable, in-depth data. And that access often means going beyond spreadsheets.

Face the challenges of spreadsheets

In the Aberdeen Group report, “Beyond Spreadsheets: The Next Level in Planning, Budgeting and Forecasting,” analysts present insights and conclusions from in-depth research into the challenges of spreadsheet-based planning, budgeting and forecasting. In a survey of 167 organizations, Aberdeen Group found version control to be the most frequently cited problem with spreadsheets, followed by manual input—“time-consuming, inefficient and subject to mistakes”—and lack of security.

As we all know, spreadsheets are among the many popular business tools invented to date. They’re great for enhancing personal productivity, but—as the Aberdeen Group report notes—they are not well suited to large-scale, collaborative planning, budgeting and forecasting. Mistakes are common and, the larger the spreadsheet, the greater the possibility that a small error will be repeated and magnified, compromising the spreadsheet’s value as a decision-support tool.

Take a beyond spreadsheets approach

Aberdeen Group recommends that organizations update their processes, taking an approach that goes beyond spreadsheets. This approach involves using advanced analytics for strategic planning that “removes the negative aspects of spreadsheets while retaining their benefits.” Going beyond spreadsheets does not mean abandoning them entirely or rendering obsolete the hard-won spreadsheet skills of the finance team. Many modern tools have user interfaces that are designed to “mirror the look and feel of spreadsheets.”

The Aberdeen Group survey also found that leading-edge organizations that have adopted a beyond spreadsheets approach “are over twice as likely to have real-time updates to financial metrics, enabling quick decisions and the ability to reforecast.” Most important, they found that better access to credible data led to enhanced—not just faster—decision making, and improved business results. The best-in-class organizations in the survey showed significant improvements in several key performance indicators (KPIs) comparing a beyond spreadsheets approach to not using this approach during a 24-month period: 

  • Revenues were up 12 percent compared to 9 percent for all others
  • Productivity was up 6 percent compared to 2 percent for all others
  • Operating margins were up 6 percent compared to 5 percent for all others

Consider planning analytics

The lesson here is that in order to make data-driven strategic planning more than just a buzzword, you really need to take a serious look beyond spreadsheets at planning analytics that enable you to derive concrete business benefits from your data. Read the full Aberdeen Group report, and learn how your organization can achieve concrete business benefits from data-driven strategic planning. 

Go beyond spreadsheets with planning analytics