It doesn't matter whether companies plan in Excel or a specialized tool from IBM, Oracle, or SAP. It is how well the technology is implemented that makes the difference. According to Adastra's survey, firms complain most about user-friendliness, reporting, and graphical interpretation in their existing solutions.
Medium-sized companies cite that the entire planning process is lengthy and involves many manual tasks as problematic. In addition, it often involves many people whose communication and collaboration need to be consistently fine-tuned.
“The preparation of data inputs takes too long, the process is not flexible enough, and it is difficult to manage it given the number of inputs and collaborators,” says Petr Sládek, Business Consultant at Adastra.
The survey among CFOs and controlling directors of one hundred and fifteen medium-sized companies across the market was conducted by Adastra in cooperation with IBM. These were companies operating in the Czech Republic with over CZK 1 billion annual turnovers.
Don’t have a data warehouse? Then preparing data inputs will take a long time
The planning process is often turbulent, depending on the ideas and requirements of the company’s management. Unfortunately, not all planning tools are not flexible enough to reflect changes in the process.
As a result, the preparation of data inputs alone can take companies orders of magnitude of weeks – especially if they are experiencing changes that cannot be adequately tracked in a reliable versioning system. Complications and time delays are especially a problem for companies that do not have data warehouses and have to collect and consolidate data manually.
However, the mere absence of a data warehouse does not necessarily mean that a planning solution cannot be implemented. On the contrary, an excellent and well-implemented planning technology will allow data to be retrieved from different data sources.
Five complications that companies complain about most in the planning process:
- The planning process involves many manual inputs and takes a long time
- Preparation of data inputs is lengthy
- Responses to changes in the planning process are not flexible enough.
- Process management (workflow) is too complex.
- Controlling access to data when multiple users are working simultaneously is not easy.
“Companies need a single structure over which to start planning. If multiple people on the data supplier side can change the structure – typically those responsible for product definition – there can be problems in consolidating the data. It is especially the case when the definition of a new product is not properly communicated across the company.”
Petr Sládek, Business Consultant, Adastra
65% of small companies use Excel, 82% of large companies use more robust solutions
Excel can’t keep up when more controlling people are involved in planning. It is pretty challenging to handle the entire planning process in it. Therefore from companies with ten or more controlling members, only 30% use excel as the primary planning platform.
An Excel spreadsheet suits 65% of companies with only a few people in finance department, usually between one and four. In contrast, companies with more than 50 employees involved in planning use other tools such as Oracle and SAP 82% of the time. Often, however, these are not full-fledged planning platforms but only existing tools (databases, ERP systems) used also for plan creation.
“As the size of the “planning team” increases, the proportion of the use of specialized tools increases in direct proportion to the size of the “planning team,” while the use of Excel decreases. The process also involves people for whom entering planning inputs is a rather marginal activity. All the more demands are then placed on the user-friendliness and management of the entire process of preparing the plan,” says Petr Sládek.
“We have outgrown Excel. It is difficult to maintain and change structures. In addition, we often get errors in the formulas,” agree the larger firms.
Unlike Excel, planning tools have built-in graphical outputs, which is their advantage. In addition, the reports are part of the data entry, so firms don’t have to do different visualizations and don’t have to transfer data between different environments/technologies. This saves time while reducing errors when redoing charts.
The more people involved in the planning, the longer it takes. With ten people, you won’t get below one month
The survey also showed that when only one person in a company is dedicated to planning, almost 70% can create a plan in about a month. When more than ten people are involved in planning, it takes more than a month in 100% of cases. “In layman’s terms, it would seem that if more people are planning, they must get it done faster. The opposite is true. The process becomes more complex as the number of contributors increases,” says Petr Sládek.
But time and user-friendliness are not the only complication companies face when planning. Mainly if they still rely on Excel. What do they most often struggle with?
The limits of Excel: Problems with versioning and what-if analyses
Companies in the survey also mentioned problems with versioning. “They do not know what the latest version of documents is, where it is stored, who approved it. The monitoring of version changes is often poorly handled; we do not know who made them, when and why,” says Petr Sládek.
Moreover, according to companies, Excel doesn’t provide some advanced functions. For example, users would appreciate the possibility of allocating fixed costs to individual products, which allows them to monitor/control their actual profitability.
Most tools that are not natively designed for planning are also complicated to do what-if analyses, i.e., what happens if… if I stop selling this product if a new lockdown phase comes… “A good planning solution will allow you to find the answer to these questions quickly and automate them so that they are not complicated to find, and you don’t have to spend weeks or months creating a new version of the plan,” adds Petr Sládek.