John Breakey is President and CEO of Unis Lumin, a Cisco Gold Partner and President of Promys, professional services automation software for technology integrators developed by a technology integrator.
You would have to go a long way to find a business that isn’t using some type of spreadsheet to manage information within their business. Many companies have grown up using Excel, as an example, in various places in the business and our systems integration business was no different. And why not? Excel is cheap, easy to use, manipulate, and very adaptable.
But as our company got larger, I started question what was the real price we were paying for using a spreadsheet to run aspects of our business?
Here are some of the tasks for which we were using a spreadsheet in our business:
- Quoting
- Forecasting
- Project management
- Calculating project profitability
- Integrating data for forecasting and analytics
But as our business grew, my priorities for information gathering and reporting started to shift. Our spreadsheets were actually becoming a hindrance not a helper.
Here are two “spreadsheet traps” we fell into. You may have the same problems in your business. The trick is to spot the inefficiency and ensure the real cost of using a spreadsheet is not impacting your business growth.
Issue #1
Inaccurate Forecasting Data: It may be fast and easy for your sales team to create quotes in a spreadsheet but the quotes aren’t linked to opportunity tracking in your main customer database. Every time the quote changes, the opportunity needs to be manually updated to reflect those changes. If the quote goes through four of five iterations, resource and revenue forecasts are inaccurate. Issuing quotes using a spreadsheet forces you to make labor utilization and expenditure decisions based on inaccurate forecasting data. Too many people on the bench or not enough people for fulfillment affect profitability, utilization and customer satisfaction.
Issue #2
Ability to Verify Data as a Project Progresses: As your projects get larger, you take on greater risk with respect to whether the project will make money or lose money. The ability to see mid-project profitability becomes paramount to mitigating risk. Instead of finding out a project had lost money 30 or 60 days after it closed, you need to see your profit margins mid-project. A spreadsheet may be useful for collecting the actual labor and equipment information about a project when projects are smaller, but as projects became more complex, it’s so time consuming to keep the project costing spreadsheet updated that it’s almost never accurate and worse than that there is no way to verify the project data.
The Impact on Your Business
Excel may be faster for individuals, but it hurts your business in the long run: If you add up all the time spent reconciling information between the quoting process, forecasting process and delivery process, a spreadsheet is significantly less efficient than spending a little extra time at the front end and getting all the information into an integrated quoting tool. This effort at the front end eliminates most of the reconciliation time spent on forecasting, delivery and billing, which is where most profitability errors occur.
Excel makes a good transition vehicle, but not a good data end point: As a Cisco Gold Partner at Unis Lumin, we use the Cisco configuration tools a fair bit. Before we used to take that configuration tool output and dump it into Excel and then copy that Excel data into multiple other spreadsheets or systems for creating the quote, project plans and tracking project profitability. If you think of how many multiple copies of that data now exist (quote, project plan, project actuals), it’s only a matter of time until some of that data get’s out of sync.
We decided to go to an integrated business automation software solution (PROMYS) because we came to believe that the real cost of using a spreadsheet to run our business, was negatively impacting our overall profitability. A spreadsheet tool like Excel is versatile for early stages companies, but as your business grows, the use of multiple spreadsheets actually works against you, costing you thousands in inefficiency and inaccurate decisions made based on inaccurate data.
