Ditch The Spreadsheet? For Finance Teams, Maybe Not

The spreadsheet is the bane of many corporate finance professionals’ existence.

Inflexible and error-prone, spreadsheets provide limited functionality for a multitude of teams in the back office. For accounting and treasury management departments, the spreadsheet’s drawbacks can lead to detrimental impacts on corporate bottom lines.

When it comes to technological problem solving, innovators can either build entirely new solutions that overcome the challenges of outdated tools, or they can build solutions directly on those outdated tools to improve performance. The spreadsheet has generally landed in the former category, with Software-as-a-Service providers introducing new platforms and apps that aim to automatically integrate data and present it in actionable ways, two areas in which the legacy spreadsheet struggles.

And yet, for all of its drawbacks and alternatives, the spreadsheet sticks around.

“Many organizations have set out on a mission to ‘get rid of Excel,’ but I’m not aware of a single one that has succeeded,” said Hjalmar Gislason, founder and CEO of GRID. “The spreadsheet is simply too empowering for the people at the edge of the enterprise for it to go away.”

Speaking with PYMNTS, Gislason explored why the spreadsheet remains within the enterprise, and how taking a different approach to solving its biggest pain points can add value to a familiar, albeit clunky, tool.

Why The Spreadsheet Persists

Despite its reputation, there are indeed valuable features of the legacy spreadsheet, a tool that Gislason described as “incredible versatile and flexible.”

“And pretty much everybody has access to them,” he said. “They are the go-to tool for the everyday knowledge worker whenever they have to do anything they don’t have purpose-built software for.”

This can be especially true for small- to medium-sized businesses (SMBs) that lack the resources to build or procure enterprise apps. For the entrepreneur or solo-preneur who needs to keep track of finances, the spreadsheet is a quick solution that can get the job done.

There is another factor behind the persistence of the spreadsheet. As Gislason explained, the alternative can be far more difficult to work with, as proprietary or more complex apps tend to be less flexible and user friendly. In addition to overcoming the friction of resistance to change, shifting away from the spreadsheet in favor of a more sophisticated solution can be expensive.

“I’ve heard so many stories of business-critical spreadsheets that are replaced by formal IT systems at a great cost — only to be quickly revived again when people find out that the new system cannot adapt to change in the tax rate, or doesn’t have a field for that new property that the business now wants to track,” he said.

The flexibility and ease-of-use of the spreadsheet is its greatest strength. Yet, as Gislason explained, it can also be its greatest weakness.

Solutions For Data Friction

As an interface that can be so easy for professionals to interact with, traditional spreadsheets also make it extremely easy for professionals to make errors. And while alternative software tools also present the opportunity for mistakes, Gislason noted that professionals tend to prefer to weigh the value of the legacy spreadsheet over its error-prone costs.

For GRID, the opportunity to tackle spreadsheet friction isn’t in offering corporates an alternative. Rather, it’s to introduce technology into the enterprise that can augment the value of the spreadsheet while mitigating its risks. It’s a strategy that depends on businesses’ ability to realize the importance of data management.

“Bring a little more governance and rigidity to spreadsheets without taking away the very thing that empowers the domain experts to get their everyday jobs done,” said Gislason.

There’s a happy medium that must be achieved when it comes to data governance. With the spreadsheet, there are too few restrictions that leave the window of opportunity for errors wide open. Yet for many alternative solutions, he said, the rigidity of data control is too great, causing a loss in flexibility and versatility.

The biggest challenge here is educating professionals about not only the importance of data discipline, but also in encouraging teams to shift their mindset about how they approach the opportunities within spreadsheet technology.

In addition to addressing key friction points like the risk of data entry errors, GRID is also focused on introducing value-added capabilities to the spreadsheet. That’s particularly important in today’s work-from-home environment, noted Gislason.

“Spreadsheets are interesting in that they are almost always made — and definitely ‘owned’ — by a single person,” he said. “This means that even when working remotely, then can keep working with their local software… When they need to go from ‘single-player mode’ to ‘multiplayer mode,’ they need ways to present and collaborate.”

The ability for spreadsheet technology to integrate with remote workforce solutions like Zoom has become a particularly valuable one in today’s market, he added.

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