Get to Know Enterprise Spreadsheets to Improve Business Effectiveness

Ventana Research coined the term “enterprise spreadsheet” in 2004 to describe a variety of software applications that add a desktop spreadsheet’s user interface (usually that of Microsoft Excel) to components that address the issues that arise when desktop spreadsheets are used in repetitive, collaborative enterprise processes. Enterprise spreadsheets are designed to provide the best of both worlds in that they offer the ease of use and flexibility of desktop spreadsheets while overcoming their defects – chiefly inability to maintain data integrity, lack of referential integrity and dimensionality, absence of workflow and process controls, limited security and access controls as well as poor auditability. All of these issues can cause serious problems for business use, which I’ll discuss below.

Companies should investigate enterprise spreadsheet applications that can address desktop spreadsheet issues because they can provide better results, save an organization substantial amounts of time and provide greater accuracy and security. Most products are designed to be a cost-effective replacement for the desktop variety. Enterprise spreadsheets fill various roles to suit specific business needs. Some take the form of a simple data collection program that maps the spreadsheet’s two-dimensional grid to a relational or multidimensional data store. Others offer business intelligence software capabilities that enable self-service automated reporting from enterprise data sources. Still others may be relatively elaborate applications that incorporate programmed workflows, access controls, audit trails and more sophisticated visualization methods than are available in Excel and utilize a relational or multidimensional data store. Dozens of applications that incorporate enterprise spreadsheets are available today.

Enterprise spreadsheets fill an important role in corporate computing environments. For example, the spreadsheet interface has become common in business planning applications because companies find it easier to train people to use this software when it has a familiar look and feel. It might servevr_ss21_combining_spreadsheets_is_a_chore_updated as an alternative user interface to an ERP system for specific tasks, where the object is to simplify and shorten data input or facilitate some analytical interaction (such as comparing two columns of numbers to spot matches or data inconsistencies). An enterprise spreadsheet also may serve as an automated conduit for moving data from one enterprise system to another, using macros to automate actions on the data as it moves between systems. Using macros makes it easier for business people, not IT specialists, to program these actions because far more people understand how to use them than are able to program applications or data connectors. These spreadsheets may serve as a data on-ramp or off-ramp to some process handled in an enterprise system such as ERP or CRM that requires human intervention. In this role, an enterprise spreadsheet provides the programmed workflows, security and referential integrity to fill a process gap that an enterprise system cannot address or is too expensive to implement and maintain in that core system. In addition to collecting data, enterprise spreadsheets may enrich data from an enterprise source in a controlled environment, federate data from multiple systems, perform checks or reconciliations vr_ss21_errors_in_spreadsheets_updatedbefore data enters an enterprise system or perform some analysis for decision support.

I regard the electronic spreadsheet as among the top five most important advances in business management to come along in the last 100 years. It revolutionized almost all aspects of running an organization. It was the original “killer app” that made it necessary for people to go out and buy a personal computer. Yet it has inherent technological defects when used in repetitive, collaborative enterprise processes. One is a lack of data integrity, which maintains the accuracy and consistency of data – spreadsheets are notoriously error-prone. More than one-third (35%) of participants in our benchmark research on spreadsheets said that data errors are common in the most important spreadsheet they use in their job, and another 26 percent said errors in formulas are common.

A related drawback is that desktop spreadsheets lack referential integrity; that is, the meaning and context of an individual cell is defined by row and column headers rather than being defined within the individual cell. This creates the familiar problem when a group of spreadsheets supposedly containing the same data are combined, but someone has added or deleted a row or column: The result is inaccurate. In our spreadsheet research more than half (56%) of spreadsheet users – even those who have been using them for more than a decade – said that they find it usually or always time-consuming to combine data from multiple spreadsheets.  Another problem is that desktop spreadsheets, being two-dimensional grids, have limited ability to manipulate and report data having three or more dimensions. While accountants can work around this limit, it’s a problem for most business users because businesses work in multiple dimensions such as organizational structures (regions or divisions, for example), products (from families down to individual stock keeping units), customers (national accounts down to drop-ship locations), dimensionality and time.

They also lack programmed workflow: People attach spreadsheets to email messages, making it difficult to keep track of the latest versions. More than one-fourth (28%) of research participants said that processes that run on desktop spreadsheets frequently break down because people using them don’t know what to do next or forget to pass them along. Likewise, they lack process controls to ensure that they are reviewed properly and that any deficiencies found in the spreadsheet are noted and automatically returned to the preparer for correction. Finally, desktop spreadsheets have limited security, access controls and audit functions as well as poor auditability. To address these deficiencies, people – especially those in finance organizations – have to spend a great deal of time reviewing and correcting spreadsheets. So while our Office of Finance research finds that the accuracy of information gleaned in desktop spreadsheet processes is acceptable, fewer than one-third of organizations said that the information the finance department provides is timely.

Because enterprise spreadsheets address these issues, they can reduce the incidence of errors and malfeasance that make using spreadsheets in repetitive, collaborative enterprise processes problematic. In many cases, enterprise spreadsheets support what we call “continuous accounting” in that they ensure data quality from end to end in financial processes. Of course, not every enterprise spreadsheet product addresses all the issues I’ve mentioned. But often this doesn’t matter if, for example, the offering is designed to perform a limited set of functions such as reporting or acting as a data conduit connecting two systems in an otherwise controlled environment.

Businesses should recognize that they no longer have to put up with the shortcomings of desktop spreadsheets. They have options to have the best of both worlds, allowing people to continue working in a familiar environment but without the drawbacks that spreadsheets impose when they are used improperly. There is no good reason not to consider adopting such an application. After all, people routinely spend time exploring application options for their smartphones but rarely spend any time getting to know business software that can increase their productivity. There are many forms of enterprise spreadsheet applications to solve a range of business issues. I recommend that businesses investigate options that give users the ease, convenience and familiarity of spreadsheets without the hassle and risk that often goes with them.


Robert Kugel

Senior Vice President Research

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Supercharging Sales and Commerce in 2016

For several years I have been advocating that sales organizations adapt their processes and applications to optimize both sales performance and the customer experience. For details see my research agenda for last year. However, it appears that not many sales organizations have responded to this challenge; many can barely maintain their quarterly sales forecasts and monthly pipeline, track progress toward quotas and ensure that sales commissions are processed promptly and paid accurately. A great many are still using spreadsheets for these critical activities. Yet our benchmark research finds that more than half (61%) who use them for commissions said this makes the effort more difficult. Elsewhere, I have seen B2B sales organizations continue down the old path of annoying prospects with direct cold calling and email vr_scm14_06_spreadsheet_use_impedes_efficiencyinstead of nurturing real relationships. For B2C sales, the digital age of search engine optimization (SEO) and pay-per-click (PPC) has begun to haunt prospects by inserting ads in our personal social media channels. My research suggests that these practices are not due to bad intentions but to force of habit and lack of desire, time and resources to develop a modern strategy and plan. Most are just managing the basics of their sales processes and relying on sales force automation (SFA) systems, reporting and dashboards, which will only produce more of the same, less than optimal results.

This won’t do in 2016 as many factors have changed. Strong emphasis on achieving revenue targets and increasing pressure by and on sales management to provide complete and useful information and satisfying experiences to their prospects and customers. Those that don’t succeed are likely to fall further behind the competition in their pursuit of sales excellence. For those serious about improving all aspects of sales, from planning to result, I offer some suggestions.

Organizations that generate revenue through sales to consumers and business with digital commerce often continue to use systems that do not include capabilities to optimize the customer experience. Our preliminary research finds a number of them examining their systems to determine whether the “click to order” paradigm is not very efficient and able to engage customers and provide all the product information they want. Most digital commerce systems are ineffective in managing product information let alone being able to replicate product records from an enterprise master source. Antiquated commerce systems cannot support the latest digital attributes of products such as images, videos, reviews and feedback that motivate customers to go from browsing to purchase. Having consistent product information across all channels of interaction is now a necessity that requires product information management (PIM) processes and systems. This is not primarily a responsibility of the sales group but of marketing and the product organization, but it affects all of them. To address it we see partnerships developing between PIM and commerce providers who have realized the need for better support that results in purchases.

vr_Recurring_Revenue_01_why_companies_use_recurring_revenueA growing approach to sales is recurring revenue and subscription methods of payment. Our research on the topic finds good reasons for this change, the most common (for 51%) being to increase revenue and improve the customer experience. But most organizations are not well equipped to make this shift. They must integrate new processes with their digital commerce systems to support a variety of subscriptions and charges that require effective dating and billing methods. We will track the momentum of recurring revenue in new benchmark research on next-generation product information management and determine best practices in building a unified commerce approach that blends management of products and customer experience to energize sales. We will also assess the vendors and products that best fit these requirements in our 2016 PIM Value Index.

Continuous optimization of existing processes is not feasible using conventional sales activities and tools, as I have pointed out. It is common to find a disparate collection of sales applications, usually loosely coupled, centered on the SFA or sales compensation system and expanding into forecasting, opportunity management, quota and territory management, analytics and reporting. Today, however, sales compensation systems are available that do more than automate and integrate sales operations with finance and include sales performance management with quota, territory, learning and analytics designed to improve sales outcomes. Such sales compensation systems are more effective in managing incentives and rewards than are using spreadsheets. Some vendors have added internal compensation benchmarking to ensure equal pay is provided for equal work across genders and ethnicities. Innovative but not widely used yet are automation of sales contests and team-based scoreboards that, using gamification, can rally a whole sales organization toward individual, group or overall objectives. Similarly providing continuous recognition of the sales force can be part of broad- or narrowcast communications. Our sales compensation management benchmark research finds that providing recognition to top performers is critical to more than half (53%) of organizations.

For the majority in sales the ability to see their progress toward quota, commissions earned and available potential territory is not vr_NGBP_01_business_planning_capability_indexreadily available in the business intelligence software managed by IT, and analytics designed for visual discovery will not meet the full sales organization’s needs. In most cases the analytics and visualization is too complicated and is not able to be narrated and contextualized through text let alone be able to collaborate on the information. Now a new generation of analytics and sales performance applications are beginning to fill the void. In many cases the analytics are simpler and more informative and already interpreted and in the form of notification or natural language that you can read and are easily accessible on mobile devices. And for some of the elites in sales management who are getting notifications on their smart watches like the Apple Watch. For its part sales management needs to be able to continuously plan sales efforts by performing what-if scenarios and assessing trade-offs on promotions and incentives; this cannot be done with spreadsheets. Our next-generation business planning research finds that spreadsheets make it difficult to manage sales and operations planning (S&OP) processes in more than half (51%) of organizations. Additionally only 10 percent of organizations said they have all the numbers needed to understand trade-offs in S&OP, and fewer than half (43%) are satisfied with their process. This sort of dissatisfaction is leading organizations to assess new systems for S&OP and not much is different in sales forecasting. Our research into business planning finds that sales is less than effective and operate below average compared to all areas of the organizations. Also available today are sophisticated analytics-driven sales forecasting and pipeline optimization applications that provide visibility into the impacts of sales efforts; these could help the one-quarter of organizations that take two weeks or longer to compare actuals to the forecast to find variances.

Other advances include applications to support the full order-to-cash sales process, and some evolving from configure price quote (CPQ) efforts are demonstrating a more effective process-centric approach that provides the workflow and extensibility missing in SFA. And CPQ has been a critical application that is absorbed through vendor acquisition into larger sales application suites. For B2B organizations this approach can help reduce friction and delays in closing deals and support revenue recognition that acknowledges delivery of goods or receipt of services. For others, contract automation software can help ensure consistency of legal terms and authorize signatures that historically have been delayed by email and stages in the sales pipeline.

Sales groups should expect more from their marketing colleagues in the development of quality product information and materials to support the sales process. Many industry efforts in sales asset management aimed at gaining more consistency in materials have fallen short but are essential to sales effectiveness. For many sales organizations more direct coaching and working with account managers can help guide them on the path to their objectives. More than one-third of organizations are planning to use or are evaluating collaborative coaching, according to our sales compensation benchmark research. But marketing, not sales, should be responsible for nurturing suspects into becoming prospects and tracking the interactions that properly prepare leads for sales to manage into its funnel. Experimentation with sales lead nurturing is a response to marketing’s inability to fulfill on its demand-generation efforts. It will take time to see whether these new applications for sales can help increase productivity and ultimately sales. In any case, continuing separate efforts of the marketing and sales functions can only pull these organizations farther apart and undermine the success of the enterprise.

I recently pointed out the digital technology agenda and resulting disruptions to business that led to a new generation of sales applications and tools available from the vendors serving this market segment. In particular we have begun to see better use of predictive analytics to score sales leads on the probability of purchase within a given time period, which brings sales more valuable insights than dashboards and reports do. Our next-generation predictive analytics research reveals that more sales organizations than I realized (38%) are already using them. We will publish more research on next-generation sales analytics in 2016, and I have already given a look at this focus. vr_NG_Predictive_Analytics_01_front_office_functions_use_predictive_analyticsElsewhere, time in sales operations spent on tasks like data preparation can be reduced by new tools or applications that have these capabilities built in. In another disruptive area advances in social collaboration enable digital interaction across an organization to share opportunities and address issues. Using video to provide training through learning management systems (LMS) or real-time exchange of information is critical for sales, too. It is clear that all systems and information that people in sales use should be readily available on mobile devices; look for products that do not require frequent pinching in and out of the user experience. Keep in mind that all of these applications for sales can be accessed through software as a service and cloud computing, which may be easier to deploy and less costly than doing it in-house.

People outside of sales also should realize the need for investments in core applications including digital commerce, product information management and sales performance management. In 2016 we will release our value index on sales performance management that will assess and rate vendors and products. Our research shows that in more than half (59%) of organizations Finance plays a key role to influence and sponsor investments for the sales organization. Heads of sales organizations likewise should know that their sales operations team needs time and resources to better support the sales force. Putting applications on mobile devices with an easy and familiar user experience can further engages sales reps to get out and accomplish what they are chartered to do: sell. Furthermore, to stay strong sales organizations will have to invest in developing their talent and make recruiting efforts more effective. The alternative is less than promising. Sales organizations should be active in taking control of their destiny and supercharging their efforts in 2016.


Mark Smith

CEO and Chief Research Officer