Spreadsheet Woes – Ill-Equipped for an Agile Business Environment

These days, crucial business decisions have to be made in a split second. However, the quality of these decisions hinges quite often on timely, insightful information and relevant business reporting.

How effective is your business reporting solution in providing you with the information you need at the time you need it?

Chances are, like 75% of small and medium businesses, your company is using spreadsheets. True, spreadsheets are the most common go-to solutions for on-the-fly forecasting, but they may not be your best option for presenting information that require consolidation and in-depth analysis and involve a lot of number crunching, especially with critical data at stake.

Furthermore, spreadsheet-based reports are rarely produced in a timely manner. In today?s fast evolving business environment where flexibility, mobility, and timeliness are the order of the day, this simply won’t do.

Let’s take a look at the particular areas where spreadsheets fall short when it comes to providing dynamic and sound financial reports:

Collaboration

With rapidly changing market conditions, organisations have to conduct budgeting, forecasting, and planning more often. Hectic schedules and geographical distances aren’t a hindrance though, because technologies like the Internet, advanced telecommunications and mobile devices can put instantaneous collaboration at everyone?s fingertips.

But collaborative activities in a dynamic setting can only succeed if all participating individuals are given secure, real time and simultaneous access to the same relevant information. This way, every change made is automatically consolidated and projected unto the bigger picture for everyone to digest.

Alas, spreadsheets aren’t built for this.

Cost Efficiency

Whether we’re in a recession or not, cost efficiency has to be taken into consideration. Are spreadsheets really the cost-effective solution?

Think ?time is money?. With the length of time needed to prepare data, establish controls, consolidate reports and distribute copies, you’ll realise how expensive spreadsheets actually are.

The ability to innovate in a changing economic environment and limited resources – a valuable derivative of agile practices – can give your company a very significant advantage. But dedicating so much time on spreadsheet management can strip your organisation of room for innovation.

Quality of Reports

Business empires rise and fall on the power of relevant information. At the end of the day, top management should assess their sources of key performance reports, planning tools and budgeting applications using these parameters:

  • Does your financial reporting system give you the right information right when you need it?
  • Do the reports allow you to look beyond the numbers to spot trends or forecast changes in the market?
  • Do they furnish enough significant data for you to make informed decisions in good time?

Spreadsheets weren’t designed to analyse data on the enterprise level. As a result, spreadsheet reports often take far too long to prepare and more importantly, may lack the dimension and depth that are crucial in decision making.

Data Reliability

We’re all familiar with the risks associated with spreadsheets. This error-prone UDA can provide inaccurate information simply because of a broken link, an incomplete range, a deleted number, or an incorrect formula. In an active business scenario where data manipulation has to be done under constant time pressure, the risk probabilities escalate.

As they always say, ?If anything can go wrong, it will?. With spreadsheets, a lot of things could go wrong. Is this the kind of tool you?d like to work with when making fast, crucial decisions? If you’re still using spreadsheets, then you?d best forget about dynamic reports and rolling forecasts.

Inability to adapt to personnel turnover

A key challenge in maintaining the spreadsheet system is picking up where another left off. A user would find it difficult to debug, revise, or analyse a spreadsheet system he developed himself and the process becomes doubly complicated if or when another person takes over.

Starting from scratch is painfully counterproductive, so that a newcomer has to spend hours figuring out the original entries in the spreadsheet and the reports it yields.

While no one is indispensable in any organisation, it’s pretty much accurate to say that if a spreadsheet ?developer? leaves, it could momentarily halt the production of key finance reports. In a fast changing business landscape, such failure to monitor performance at critical times could sound the death knell for your company.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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Virtualisation

Using an IT solution that can provide the fastest (but still reliable) disaster recovery process is essential for the success of any business continuity plan. Although virtualisation is still considered leading edge technology by many business continuity specialists, it definitely brings a promise that, once fulfilled, can result in the cheapest, fastest, and most comprehensive solution for business continuity.

One great advantage of virtualisation over traditional BC (Business Continuity) methods is the relatively cheaper cost needed to achieve a certain level of business continuity assurance. Thus, more companies will find it easier to reach their required minimum for BC assurance. By contrast, some BCPs (Business Continuity Plan) based on a physical environment require companies to invest more than what they are willing to in order to reach the same minimum level of assurance.

Virtual machines, which can already encapsulate your operating systems and their corresponding applications, can be transported as a file from one machine running a compatible hypervisor to another. This makes the business continuity tasks of backup, replication, and restoration simpler and faster.

As of 2008, about 54% of IT professionals in Europe were willing to implement virtualisation within a maximum of two years. Furthermore, the expected compound annual growth rate of installed virtualised servers from 2008 to 2012 is already pegged at 33%.

If you want your organisation to take advantage of the benefits of this revolutionary technology, we’d be more than willing to help you discover what it can do for you. Then once you decide to make that transition to virtualisation, we can guide you every step of the way.

  • As not all applications are suited for virtualisation (e.g. some are too demanding on I/O and memory access), we’ll start by reviewing your entire IT system to see which portions can be implemented on a virtualized environment.
  • Using virtualisation and replication, we can conduct disaster recovery tests using up-to-date data without interrupting operations in your main IT site. Running these tests will increase your team’s preparedness and will allow you to discover possible weak points.
  • Provide a simple but comprehensive protection and backup system that encapsulates not only data, but also system configurations and application installations. This kind of setup allows for faster and easier disaster recovery operations. Because of these same characteristics, you can enjoy zero downtime while performing scheduled maintenance operations.
  • Since virtual machines are hardware-independent and transparent to operating systems, we can help you run a mix of legacy and new systems as well as open source and proprietary systems, allowing for more flexibility in your BCP budgeting.

We can also assist you with the following:

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Can you do away with the Project Initiation Meeting?

Project initiation meetings are often skipped to fast-track projects. Once a sponsor is found, organisations go straight to project planning and execution. But based on our own experience, holding a project initiation meeting can actually eliminate many issues that may crop up in the future and hence may speed things up instead in the long run.

It is in the project initiation meeting where your project objectives and scope are clarified and all stakeholders are brought to the same page. Project sponsors and stakeholders will have to know in a nutshell what is needed from them, what the possible risks are, what different resources are required, and so on. So that, when it’s time to proceed to the next phase, everyone is already in-sync.

So what are taken up in such a meeting? Perhaps an actual example can help. Sometime in the past, we set out to work on an eCommerce website project. After conducting the project initiation meeting, these were some of the things we were able to accomplish:

  • Identified deliverables e.g. site design, interface to payment system, etc.
  • Come up with the project phases
  • Agreed what should be in and out of scope
  • Defined the acceptance test criteria
  • Identified possible risks
  • Identified the possible training and documentation work needed
  • Established whether any analysis was required, e.g. as with regards to payment interfaces
  • Formulated disaster recovery plans
  • Defined roles and responsibilities
  • Drafted timelines and due dates

Aren’t these covered in project planning? If the project is a big one, the answer is no. In a large project, project planning is a much more exhaustive activity. In a project initiation meeting, only the basic framework is defined.

Some questions may still remain unanswered after a project initiation meeting, but at least you already know what answers you need to look for. In the example we gave earlier, we left the meeting knowing that we needed:

  • a list of all necessary hardware to estimate the costs
  • to identify possible dependencies we might have with third parties
  • to identify what software had to be bought and what skills we needed to hire

When it was time to proceed to project planning, everyone involved already knew what direction we were taking. In effect, by not skipping the project initiation meeting, we were able to avoid many potential obstacles.

Knowing the Caveats in Cloud Computing

Cloud computing has become such a buzzword in business circles today that many organisations both small and large, are quick to jump on the cloud bandwagon – sometimes a little too hastily.

Yes, the benefits of the cloud are numerous: reduced infrastructure costs, improved performance, faster time-to-market, capability to develop more applications, lower IT staff expenses; you get the picture. But contrary to what many may be expecting or have been led to believe, cloud computing is not without its share of drawbacks, especially for smaller organisations who have limited knowledge to go on with.

So before businesses move to the cloud, it pays to learn a little more about the caveats that could meet them along the way. Here are some tips to getting started with cloud computing as a small business consumer.

Know your cloud. As with anything else, knowledge is always key. Because it is a relatively new tool in IT, it’s not surprising that there is some confusion about the term cloud computing among many business owners and even CIOs. According to the document The NIST Definition of Cloud Computing, cloud computing has five essential characteristics, three basic service models (Saas, Paas and Iaas), and four deployment models (public, community, private and hybrid).

The first thing organisations should do is make a review of their operations and evaluate if they really need a cloud service. If they would indeed benefit from cloud computing, the next steps would be deciding on the service model that would best fit the organisation and choosing the right cloud service provider. These factors are particularly important when you consider data security and compliance issues.

Read the fine print. Before entering into a contract with a cloud provider, businesses should first ensure that the responsibilities for both parties are well-defined, and if the cloud vendor has the vital mechanisms in place for contingency measures. For instance, how does the provider intend to carry out backup and data retrieval operations? Is there assurance that the business’ critical data and systems will be accessible at all times? And if not, how soon can the data be available in case of a temporary shutdown of the cloud?

Also, what if either the company or the cloud provider stops operations or goes bankrupt? It should be clear from the get go that the data remains the sole property of the consumer or company subscribing to the cloud.

As you can see, there are various concerns that need to be addressed closely before any agreement is finalised. While these details are usually found in the Service Level Agreements (SLAs) of most outsourcing and servicing contracts, unfortunately, the same cannot be said of cloud contracts.

Be aware of possible unforeseen costs. The ability of smaller companies to avail of computing resources on a scalable, pay-as-you-go model is one of the biggest selling points of cloud computing. But there’s also an inherent risk here: the possibility of runaway costs. Rather than allowing significant cost savings, small businesses could end up with a bill that’s bound to blow a big hole in their budget.

Take for example the case of a software company cited on InformationWeek.com to illustrate this point. The 250-server cluster the company rented from a cloud provider was inadvertently left turned on by the testing team over the weekend. As a result, their usual $2,300 bill ballooned to a whopping $23,400 over the course of one weekend.

Of course, in all likelihood, this isn’t going to happen to every small and midsize enterprise that shifts to the cloud. However, this should alert business owners, finance executives, and CEOs to look beyond the perceived savings and identify potential sources of unexpected costs. What may start as a fixed rate scheme for on-demand computing resources, may end up becoming a complex pricing puzzle as the needs of the business grow, or simply because of human error as the example above shows.

The caveats we’ve listed here are among the most crucial ones that soon-to-be cloud adopters need to keep in mind. But should these be reasons enough for businesses to stop pursuing a cloud strategy? Most definitely not. Armed with the right information, cloud computing is still the fastest and most effective way for many small enterprises to get the business off the ground with the lowest start-up costs.

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