Excel is a popular tool for budgeting, forecasting and analysis in many organizations. However, as the needs of a business change and models are forced to react, a multitude of issues can arise. These issues can negatively impact both the front line and executive teams, making it difficult to manage the business and gain valuable insights from the data available. In this blog post, we will explore six of these issues and how Anaplan, a powerful Corporate Performance Management (CPM) tool, can address them.
It’s important to note that, while Anaplan is a great CPM tool for budgeting, forecasting and analysis, it may not be the best fit for every company. Small businesses with limited financial resources may find Anaplan’s subscription costs to be too expensive, and companies with highly customized Excel models may not be able to migrate their models easily to Anaplan. Additionally, companies with very small teams that do not require collaboration or complex modeling capabilities may find Anaplan’s capabilities overkill for their needs. In these cases, alternative solutions such as Google Sheets, Microsoft Power BI, QuickBooks or even Microsoft Excel(!) may be more appropriate.
Signs You Might Have Outgrown Excel
Excel can cause issues that negatively impact the front-line and executive teams, making it difficult to manage the business and gain valuable insights from the data available. Here are some signs that you might have outgrown Excel:
- Broken Links: One issue that can arise with Excel models is broken links. This can occur when a forecast or budget file is copied for the next cycle and moved to a new folder, but supporting files change due to being renamed or moved for the new cycle. This issue can be time-consuming to fix and may lead to incorrect outputs.
- Formula Management: As formulas of varying complexity are created across a vast number of worksheets and files, it can become difficult to effectively manage, audit or have control over calculations. This can lead to outdated formulas, which can result in incorrect calculations or wasted time maintaining formulas.
- Workbook Management: As processes mature, Excel workbooks can become large, with 200+ worksheets when forecasting and budgeting at granular levels such as by product, customer, department, salesperson and scenario, etc. This leads to stale data, an inability to really audit results and a basic lack of desired visibility/control in the process.
- Difficulty in Managing User-owned “What If” Scenarios: Management may wish to create their own dynamic “what if” scenarios that use the latest assumptions and calculations from the planning/forecasting model. It can be challenging to support dynamic, user-controlled “what if” scenarios in an Excel or other reporting/planning-focused environment.
- Model Drilldown and Calculation Auditing: Excel does not inherently offer “drill down” capability, making it difficult for users to understand the calculations within the model. This can be problematic when trying to trace or audit formulas to the original source module or list within the module.
- Managing/Administering Template Files: Excel template files can be difficult to manage across multiple users, leading to wasted time, challenges in data updates and version control issues. Separate files sent to multiple users also make file management difficult.
Why CPM Tools
Corporate Performance Management (CPM) tools are becoming more popular for budgeting, forecasting and planning due to their advantages over traditional spreadsheet-based methods. CPM tools offer greater accuracy, better collaboration and improved efficiency, which can improve performance and decision-making. Leading CPM tools in the market include Anaplan, IBM Planning Analytics, Adaptive Insights, Oracle Planning and Budgeting Cloud Service and Planful, which offer powerful features and user-friendly interfaces to address challenges in budgeting and forecasting.
How Anaplan Addresses Excel Pain Points
We encounter Anaplan a lot due to its ability to handle large datasets and complex calculations, making it one of the go-to tools for many organizations. In our experience, Anaplan’s strengths help resolve the Excel pain points identified previously:
- Broken Links: Anaplan provides dynamic links, which means that if a referenced module or line-item name changes, all referencing formulas and processes are automatically updated. This eliminates the need to manually fix links, saving time and reducing the risk of errors.
- Formula Management: Anaplan’s architecture of multi-dimensional databases using Lists, Modules, Formulas, Dashboards and Actions better supports the development of complex formulas. It allows formulas to be broken down into small calculation segments that are easier to manage and audit. Because of the dynamic cloud-based environment, formulas can be made once and used across many modules or lists. Formula updates automatically flow through all modules and lists, reducing the risk of errors and ensuring that data is always up to date.
- Workbook Management: Anaplan’s usage of multidimensional databases reduces data management complexity by allowing logical grouping (i.e., consolidating) of data. This simplifies data management and makes it easier to audit results and gain visibility/control in the process.
- Scenario Management: Anaplan’s multidimensional and modular architecture allows the creation of user-specific modules with custom scenarios that can be dynamically linked to the “working” model. Access and restrictions can be managed via security, ensuring that each user can only access the scenarios they are authorized to use. This feature allows management to create various scenarios and assess their impact on the business, giving them the ability to make informed decisions about how to move forward.
- Model Drilldown and Calculation Auditing: Anaplan offers drill-down capability on both modules and dashboards, enabling the ability to trace or audit formulas to the original source module or list within the module. This feature provides users with greater visibility into the calculations that are driving the results, which can help them make more informed decisions.
- Managing/Administering Template Files: Anaplan’s cloud-based solution offers users access to modules that can be dynamically linked to source or import master modules. This ensures that the latest information, formulas, formats, etc. are current in templates, and consolidations can be instantaneous or on-demand as needed. This feature can help organizations save time and reduce errors by streamlining the consolidation process and making it easier to manage and administer template files across multiple users.
Anaplan’s popularity among its competitors in the CPM space is largely due to its user-friendly interface and flexibility. Its platform is accessible to a wide range of users, allowing them to create models, build reports and perform analysis without the need for IT support. Anaplan’s scalability also allows larger organizations to handle large amounts of data and complex calculations. Finally, Anaplan’s cloud-based platform enables users to access data from anywhere, at any time, making it easier for teams to collaborate and work together while ensuring data security and up-to-date information.
In our experience at 8020 Consulting, we have seen the limitations of Excel for budgeting, forecasting, and analysis. That’s why we have often turned to Anaplan to help our clients gain greater visibility and control over their data. By utilizing Anaplan’s multidimensional and modular architecture, as well as its cloud-based environment, our clients have been able to streamline their processes, reduce errors and make more informed decisions. Anaplan’s powerful features have helped us deliver better business outcomes for our clients.
To learn more about how Anaplan has transformed our clients’ businesses, check out this Anaplan case study.