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Summary
Ventana Research’s recently completed benchmark research on the use of spreadsheets (sponsored by Actuate and Compassoft, along with media partners BI Review, DM Review and Intelligent Enterprise) shows that a majority of people who use them, regardless of their skill level, encounter significant issues that hinder their productivity. But spreadsheet users frequently are in denial about these negative impacts because spreadsheets are so easy for them to use and they are used to dealing with the problems. Getting rid of spreadsheets is not an option. However, there are ways to control spreadsheets and make them less risky to use. And there are more options than ever to selectively replace spreadsheets with task-specific applications that are safe and cost-effective and save time.

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While they are practically indispensable in most businesses, spreadsheets also are a real problem for companies. Our research shows that most people find errors in the most important spreadsheets they use in their jobs. A majority of those who use spreadsheets regularly have to combine the results of multiple spreadsheets into a consolidated view, which they find time-consuming. Yet because they are so familiar with spreadsheets and because spreadsheets make it easy for people who know little or nothing about programming to quickly create what are, in effect, business applications, it is difficult to persuade them to consider alternatives. This reluctance is especially strong among the many people who are highly skilled in using spreadsheets.

Recognizing that these tools are error-prone and not secure, IT departments periodically try – and fail – to supplant spreadsheets used for enterprise tasks. Until recently, though, corporations had few practical alternatives to spreadsheets. However, in the past several years new options have become available. This software comes in three broad categories.

The first are applications for automated discovery, management and control (DMC). They enable organizations to find and track all spreadsheets that they need to manage, to control access to and use of the file and to perform checks to highlight errors or questionable values in a spreadsheet. Also in this category is less expensive software that provides enhanced capabilities for auditing spreadsheets. We recommend to all companies that have more than 1,000 employees – and especially those in regulated businesses such as financial services and pharmaceuticals – that they implement DMC software to improve productivity and reduce risks associated with spreadsheets they use to support business processes.

A second category automates spreadsheet reporting. These applications allow people to continue working with spreadsheets as they have, but they provide data management, distribution and control capabilities to ensure accuracy and simplify information-sharing. Ad-hoc reports shared by a handful of people are a common use of spreadsheets, but recurring reports should not be, particularly if they bring together information from multiple data sources. Business intelligence (BI) tools do a fine job for this purpose, but they require too much effort to master for most people who are not technologically astute. For these people, companies should provide tools that enable them to use the spreadsheet as the interface for a BI application. Nontechnical employees will be able to work far more productively in this way than if they use spreadsheets for periodic reports.

The third category is applications that automate tasks for which companies routinely use spreadsheets to support a core function, such as budgeting, compensation management, sales and operations planning and expense management, to name just four. This new generation of enterprise applications is less expensive and easier to implement and support than its predecessors. Some are available as hosted software as a service (SaaS), which minimizes technical responsibilities. Our research finds that when companies use spreadsheets to manage a process such as those mentioned above, they routinely encounter problems with hand-offs and errors in calculations and data that delay completion. Dedicated applications can avoid these pitfalls.

Assessment
Ventana Research urges companies to take a fresh look at how they use spreadsheets. Files that individuals use for personal productivity, or that they share once or twice, are usually not an issue: Spreadsheets were designed for these purposes. However, larger companies should control the spreadsheets that people share and reuse as part of business processes. They also should take advantage of applications that automate processes while using a spreadsheet as the working environment so they can take advantage of people’s training and experience. For some processes, such as compensation management and budgeting, we assert that they simply cannot be handled effectively using spreadsheets. With so many practical options available that require limited or no IT staff time and are affordably priced, most midsize or large companies can find a package that will increase their productivity and decrease business risks they are enduring with spreadsheets. Spreadsheets are a flexible tool that cannot be replaced in many functions, but they are not the right tool for every job and must be controlled more effectively than most companies are doing today.

Related Research Notes
Spreadsheets and Reporting: Anatomy of a Problem
Attractive alternatives to spreadsheets exist for automating recurring reporting

Resolving the Spreadsheet Paradox
Practical solutions to spreadsheet problems exist

Facing the Spreadsheet Paradox
“Easy and free” comes with trials and errors