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5 Reasons To Ditch Spreadsheets for Purpose-Built Solutions

5 Reasons To Ditch Spreadsheets for Purpose-Built Solutions

UPDATEDJun 27, 2023

For decades, spreadsheets have been a massive part of doing business. Even before the modern age of Excel and Google Sheets, physical worksheets and spreadsheets were used to help managers understand complex business processes and tabulate financial reports.

It’s easy to understand why spreadsheets are so pervasive in consulting operations. Consultants are problem-solvers, and spreadsheets are great problem-solving tools. Pretty much everyone understands the fundamental basics of using spreadsheets, and can turn a blank Excel sheet or a spreadsheet template into a tool that meets their immediate needs fairly easily. 

But that broad applicability speaks to their limitations, and the limitations they impose on businesses when they’re overused – spreadsheets can be customized to do just about anything, but they haven’t been built or designed to do any one thing well. It’s on you, as the business user, to design them to meet your needs, and to maintain oversight over the dozens (or hundreds) of spreadsheets that have been designed to address each of your business’s specific needs. Spreadsheet sprawl can paralyze a business and make it nearly impossible for decision-makers to get an accurate, up-to-date picture of professional services performance.

The Danger of Overreliance on Spreadsheets 

An overreliance on spreadsheets can cause unnecessary complications within your business, as we detailed in a previous post, Common Spreadsheet Problems (and How They Affect Business). These complications can multiply as your business grows.

As Tom Schoen, CEO and President at BTM Global, describes in a new whitepaper from Kantata and Enterprise Times, spreadsheets are a natural starting place for keeping information organized in a PSO, though one that becomes cumbersome and limiting as the business grows. “When I first started BTM, we ran it on spreadsheets that were all interlocked. It was pretty easy to do, when you have only half a dozen projects running at the same time. It doesn’t work when you have 70 to 80 projects running. We needed a professional services tool to be able to help manage that workload.”

BTM Global’s story aligns with the common perception that as businesses grow, they grow out of their dependence on spreadsheets; however, for many growing businesses, there’s a danger that spreadsheets can become even more ingrained in the culture as departments, divisions, grographies, and business units each develop their own ways of measuring and managing performance through spreadsheets. As Kantata CEO Michael Speranza recently shared on an episode of The Professional Services Pursuit Podcast, overreliance on spreadsheets is certainly not limited to startups: “You still see multi-billion dollar organizations that are using their gut, that are running this business on a spreadsheet. They simply just don’t understand what tools and processes they have in place to actually run this business.”

This is backed up by new research from the Resource Management Institute which shows that 71% of organizations rely on spreadsheets to help with resource forecasting, which is one of the biggest challenge areas for professional services organizations. That means that in order to understand which resources will be needed to take on upcoming work and make critical staffing and hiring decisions, business leaders are relying on difficult-to-maintain spreadsheets with custom calculations that may not always accurately reflect the current sales pipeline or up-to-date resource availability. In many cases, decision-makers simply do not have confidence in the accuracy of the data they are getting, with the majority of organizations only able to forecast out two months, and only 12% of organizations able to confidently forecast out to an RMI best practice level of at least 6 months. 

Resource forecasting is one of many essential processes that drive the professional services lifecycle – including project estimation, staffing, project accounting and revenue recognition – that are too reliant on spreadsheets in many consulting firms.

Why It’s Time to Move on From Spreadsheets

Are you seeing signals in your business that spreadsheets are eroding clarity, control, and confidence within your business? Are you wondering how to help others understand why the time is now to move from spreadsheets to a purpose-built solution? Here are 5 reasons why it’s time for your business to ditch spreadsheets.

1. Stop Wasting Time Searching For Data

One of the simplest reasons to find another way of doing business is that spreadsheets eat up a ton of time. As spreadsheets are used more and more, the amount of data and complexity of calculations only grows, causing even more time to be spent managing them. What was once created to streamline business management now eats away at utilizable time of valuable team members, forcing them to spend time away from clients doing non-billable work attempting to make heads or tails of complex spreadsheets. In the event of user errors, hours can be spent simply searching for important data instead of creating valuable insights for the business.

Moving away from spreadsheets and onto purpose-built SaaS solutions can make a world of difference in how employee time is spent, and can have a direct impact on billable utilization rates. For example, BTM Global recognized the need to move off Excel spreadsheets in order to enable growth, and by moving away from them and onto software purpose-built for professional services organizations, they quickly improved company-wide utilization by 15%.

2. Cut User Errors Out of Your Decisions

Spreadsheets require users to edit, calculate, and define every element in order to make them into the exact tools needed for business processes. Because spreadsheets are not purpose-built and aren’t designed with best practice in mind, they don’t have any guardrails built into them to prevent errors. This means that even the most dependable and well-used spreadsheets rely on users to work properly, and even the most experienced spreadsheet user makes mistakes.

User errors can be small – a decimal point in the wrong spot – or they can be massive – a completely wrong equation used to calculate project burn rate. But in either case, they compromise the accuracy and integrity of the data being collected and created. When this data is used to make important business decisions, it becomes clear just how dire the smallest user error can become.

3. Businesses Need To Stop Siloing

Data silos are one of the biggest hurdles that stand in the way of companies fully understanding the performance and needs of their teams. Spreadsheets are difficult to integrate with other systems, are frequently used by only a few people, and are often hidden within departments, preventing the important information within them from being used or even known by those who are making critical decisions.

To eliminate data silos and begin using robust data lakes to make informed decisions, spreadsheets can not remain the end-all-be-all for data calculations. When data is moved out of spreadsheets and into integrated solutions, silos are also removed, increasing invisibility and transparency for your business and helping all users better understand business performance and needs.

4. Remove Process-Limiting Dependency

In consulting operations, time is of the essence and decision-making latency can keep businesses from making needed changes that will keep them ahead of the curve. The more dependent a business becomes on spreadsheets to manage essential processes like forecasting resource needs or closing the books at the end of the month, the harder it becomes to get accurate information about the business in a timely manner. 

This can be a slippery slope – too often, the answer when currently available spreadsheets aren’t providing needed information in a timely manner is to create more spreadsheets. Spreadsheets become the glue that is holding core businesses together, and when a new leak springs up in the boat, another spreadsheet is applied over the leak. Eventually, processes will become so weighed down with spreadsheets that they will sink.

5. Spreadsheets Simply Weren’t Made For This

Because they’ve been used for so many different purposes over the years, it can be easy to forget that spreadsheets are the product of a bygone era. Their digitization and the move to the cloud has helped businesses create complex equations and collaborate with team members around the world, but in the end, spreadsheets are still simple receptacles for data that support more complex processes.

Think about it this way: what would you advise a business you were running a consulting engagement for to do if you saw them using some of the spreadsheets that have become essential to your current business operations? You would almost certainly tell them they need to stop, that they are bending antiquated technology to the point of breaking, and that they need to lean into digital transformation and look for cloud solutions that support their core operational processes in a holistic way. 

Today’s professional services world is faster and more complicated, powered by both employees and clients spread across the globe who provide wide-ranging skills and constantly changing demands. Spreadsheets weren’t made for this, and businesses that still rely on them are tempting fate. Don’t be one of those businesses that get left behind in the world of spreadsheets as today’s top companies move beyond it.

Move Past Spreadsheets And Into The Future

The Kantata Professional Services Cloud is purpose-built for today’s consulting firms – businesses that are not only competing in an increasingly challenging market, but are implementing complex processes that require juggling internal and external resources across the globe. With a modern SaaS solution that eliminates process-limiting spreadsheets and paves the way for the future, sustainable success in a constantly evolving industry is possible today.

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