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Much talk lately has centered on the possibility of Excel being replaced by Enterprise Performance Management (ERM) systems housed in the cloud. So I can’t help but ask, How does Excel feel about that?
“Nothing is so painful to the human mind as a great and sudden change.”
? Mary Wollstonecraft Shelley, Frankenstein

Technology has brought great change to the way we work and live. For people who embrace change, it has provided opportunities. But humans, being what they are, sometimes don’t welcome change with open arms. We sometimes fear change, even fight against it.

It got me to thinking about technology and its capacity for emotional responses. I began to wonder, “Can technology fear its own obsolescence?” One case in particular has been on my mind; Excel. Much talk lately has centered on the possibility of Excel being replaced by Enterprise Performance Management (ERM) systems housed in the cloud. So I can’t help but ask, “How does Excel feel about that?”

If Excel had feelings, it might be upset to learn in a 2017 Wall Street Journal article finance chiefs were telling their staffs to stop using Excel.1 In the article CFOs from Adobe and P.F. Chang’s were intent on phasing out Excel in favor of cloud programs that could be integrated with other systems on one unified platform. “I don’t want financial planning people spending their time importing and exporting and manipulating data, I want them to focus on what is the data telling us,” said Adobe Finance Chief, Mark Garrett.

Ouch. That hurt. But then Accounting Today2 proclaimed in May 2018 that “Reports of Excel’s Death Are Greatly Exaggerated.” Author, Mike Whitmire, declared the “To Excel or Not” question, “a red herring.” Whitmire writes:

“Realistically, no one is getting rid of their Excel licenses, and every one of these solutions that promises to replace Excel has an “Export to Excel” button. Excel is powerful and endlessly customizable. There will always be something you can’t do in your ERP or EPM and you’ll want to do in a spreadsheet.”

Whitmire makes some persuading arguments in favor of keeping Excel. First, everyone knows how to use it. That is a definite plus. Second, it is highly transparent, giving accountants the chance to “look under the hood.” Finally, he debunks a 1998 University of Hawaii study that claimed as many as 97% of spreadsheets have errors. Plain wrong, is what he declares about the study.

The best case scenario, as Whitmire envisages it, is to use both Excel and specialized applications for what they are best at. Not to go and throw the baby out with the bath water so to speak. This seems like the sane, middle ground.

Yet there will probably be alarmists who shudder at findings like that of Adaptive Insights’ which shared results of a CFO survey with Accounting Today3. The survey asked CFOs, “What is the most important skill for new hires?” Just 5% said “Excel skills.” This was in stark contrast to what they said just two years before, when 78% ranked Excel proficiency as the important skill in their finance team.

The ubiquity of Excel may make it function we take for granted. But there is widespread agreement that for Excel or any application to be useful, the person behind the wheel of it must know how to extract insights from the data. This is universally understood to be the holy grail of accounting and finance.

IMA® (Institute of Management Accountants), (along with the Association of Chartered Certified Accountants (ACCA), predicted how the advent of big data would usher in new competencies accounting and finance folks. In a 2015 paper, “Tomorrow’s Finance Enterprise,” IMA/ACCA opined that the finance function of the future would be “value centric and data driven.”

“Understanding how the business generates value is core to the future CFO role; in the push to drive sustainable return on enterprise assets, finance leaders need clarity on where growth will come from and where to allocate enterprise capital. But they can’t do this unless they get their hands on the right data. The CFO function has a critical future role to play in getting the enterprise data basics right as a starting point for better decision making.”

Just how CFOs get their hands on the right data is currently more art than science, but IMA’s Strategic Finance magazine features articles every month on technology and how to harness it to accomplish goals like this. For instance, the November 2017 article, “XBRL and The Cloud,” provides a primer on XBRL (eXtensible Business Reporting Language), the SEC’s filing program for corporate regulated financial statements, and how it could be used in conjunction with the cloud for internal reporting and decision analytics, such as the balanced scorecard, data mining/business intelligence, business process improvement driven by the Sarbanes-Oxley Act of 2002, and BPM (business performance management).

With the right data in hand, whether harnessed by Excel or a cloud-based solution, analysis becomes the focal point.

  1. ”Stop Using Excel, Finance Chiefs Tell Staffs,” The Wall Street Journal, November 29, 2017
  2. “Reports of Excel's death are greatly exaggerated,” Accounting Today, May 23, 2018
  3. “Excel on The Way Out?” Accounting Today, February 28, 2018

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