Infosys-Oracle Blog : Financial Transformation using EPM - Why migrate from 'darling of the masses' Excel to EPM?

Guest post by
Mitul Kumar, Senior Consultant - Business Intelligence/ EPM, Oracle Practice, Enterprise Solutions, Infosys Technologies Ltd.

I was surprised to see a recent client managing its billion dollar Marketing Expense Budgets in Excel spreadsheets. It left me wondering that in an era where Strategic Planning is the key to an organization's long term success, how can the organization let such a business critical function be run using spreadsheets which inject inherent data quality and validation problems into the system. Even from a user perspective, working on these big Excel files is cumbersome, scrolling across thousands of cells, tracking versions, making changes to the calculations manually, toggling between multiple sheets for each cycle which can be as frequent as monthly with a closure window of three days.

The big question is that despite of all the known efficiency related issues with Excel based models, why does it becomes a major change management issue to convince the users to migrate to a better, automated EPM tool which provides better process management, data quality and relevant functionalities based on best practices. The reason is not very hard to find.

One, Excel provides great flexibilities, especially when it comes to submitting plan/ forecast spanning multiple dimensions within short deadlines.

Two, Excel is much more handy than an Enterprise Application. Excel files can be copied, pasted, transferred and carried on local desktops with ease, no dependence on network availability without any process for changing any data.

Three, Excel also enables the users to hide the details and hence the logic for arriving at a particular value, which is mostly a percentage or value increase/decrease over previous period with little thought put into it, is well covered.

However, when one sits to discuss the current process with the users, data and process inconsistencies come out wide open. Typically, all the units within the organization, thanks to these Excel spreadsheets, have their own ways, means, levels and responsibilities of Planning and Forecasting a business process which is critical to the very survival of the organization given the competition and nature of the industry. And when you think through a level deeper, you realize that all the so-called advantages of Excel actually fail the very purpose of Planning. Plans are useless if they are not well thought through and if there is no process traceability to put responsibility and accountability - hence a requirement for EPM.

EPM Application ensures process definition, standardization and control to ensure that there is accountability and traceability of actions. EPM application, to some extent, forces users to think through their Financials and make an informed decision. It also reduces the process cycle time and efforts by automating complex calculations while ensuring that data quality checks and validations are done as required. Having all the data in a common database also allows the organization to perform scenario analysis/ data modeling/ slicing & dicing to make intelligent decision making. The biggest value add that such a Financial Transformation brings is that it ensures that the users are out of their daily transactional issues, hence releasing their bandwidth, and provide them the relevant information for taking intelligent decisions.

In light of the above, one would advocate EPM solutions for most of the organizations, which have the critical size and resources, to enable the users to drive the organization in the right direction. I would be interested to know if you have come across situations where this might not hold good or any challenges that you might have faced during EPM implementations.