ERPs and Excel-based tools – friend or foe?

ERPs sometimes generate frustration … and lots of spreadsheets!

No matter how much effort you put in building and deploying the optimal ERP solution, you will always be confronted with two things:

1. Whatever its level of customization, your ERP solution will always leave “functional orphans” with gaps for certain business units or user groups, who will be unsatisfied
2. Whatever the change management effort you put into your deployment, you will always witness the persistence or creation of shadowy Excel files (or even ‘factories’ some say), which users cling to obstinately to perform their daily tasks

Observation 1 may be tagged a necessary evil on the path to a controlled and efficient ERP deployment - It has been demonstrated and is now commonly accepted that to keep your initially planned ROI for your solution, you should focus it on your essential business processes and avoid too many customizations, which lead to unexpected additional costs both in the short and longer terms.

Observation 2, which is somehow a by-product of observation 1, should be used as a guide to further productivity gains and insights for innovation.

Let me be clear, not all ‘Excel factories’ and silos are a good thing. Some of them clearly bypass the ERP and standard process from a lack of knowledge (or training?) and contribute to the parallel maintenance of conflicting data which may lead to improper business decision-making. These ventures are easily recognizable as they generally make-up or reproduce the inputs from the ERP and produce similar output information, except that they do it in a different (wrong?) way – consuming significant resources in the process.

Manage the pipeline

Most of the time however, users spend significant amounts of time feeding their Excel model and manipulating it because they want to achieve a result, superior to that achievable trough the use of the standard ERP functionalities. It could be:

• merging data from several scattered ERP systems allowing a better consolidated vision
• adding a twist to usual data visualization, allowing for further optimization in the business process
• or – best-case scenario - calculating or simulating new trends necessary to improve decision-making on key business items

Both functional experts and IT teams should regularly follow on their internal creative excel geeks and users as they would on a pipeline of potential ideas for innovation. Some of those ideas can prove to be quick wins for the organization: if it proves fundamental to the company’s business advantage, it should maybe worth it to consider how to secure or improve it, or to reinforce a potential business case for future IT investments.

Improve and secure the spreadsheet-based processes

Not all those ideas will qualify for a customization of your core ERP solution of course, and there are many ways available today to improve Excel-based processes at a fraction of the cost of a specific development:

• automate data retrieval from your core ERP system to Excel – copy-paste or manual input processes generally are resource-intensive and produce the highest proportion of error within a spreadsheet
• guide the consolidation/calculation/simulation process by reinforcing your Excel model with code
• automate data upload and synchronization back to your core ERP if the results are used as inputs in other processes
• organize the sharing and distribution of your Excel model, preventing unwanted modifications or manipulations, yet allowing for frequent updates if necessary

I wouldn’t risk labeling it the ‘agile part of your bimodal IT’, but Excel-based processes are, in essence, reactive and flexible, and overwhelmingly owned by business and functional experts – why risk stifling this potential innovation? All the more so considering that fixing the usual issues found in them is no longer insurmountable. Nor costly. From the points listed above, we contend that the vulnerability, manual data entry, version management and sharing issues, which were commonly and rightly quoted as Excel limitations, can now be tackled effectively. We have a track record of successful client projects to attest to it at XSBS – and a modular solution which can help your organization simply overcome the usual friend-or-foe paradigm.