Long Live Spreadsheets

Welcome to Digital Stratosphere, the podcast that helps organizations throughout the world with their digital transformation journeys. Here, you will find independent and technology agnostic advice with no software vendor sales spin to help you make the best decisions for your organization. Whether you are in the process of selecting technology, in the midst of your transformation, or trying to get your initiative back on track, Digital Stratosphere provides expertise and best practices to help.

The number one ERP system in the world, the most commonly used ERP system in the world, it's not SAP, it's not Oracle, it's not Microsoft, it's probably not any system you're thinking of right now. However, it is the undisputable leading number one most commonly used ERP system over the last 30 years. My name is Eric Kimberling, I'm the CEO of Third Stage Consulting. We're an independent tech agnostic consulting firm that helps clients throughout the world with their digital transformation journeys.

And when we're working with clients, oftentimes they'll ask, what is the most commonly used ERP system in the world? What's the best ERP system in the world? Which ones do end users like the most? And they expect me to answer with an SAP, an Oracle, a Microsoft, Workday, whatever it might be.

But the reality is, is that spreadsheets, Microsoft Excel is still the most commonly used ERP system in the world. Now I say ERP system, I'm being a bit facetious. But the reality is, is that so many organizations throughout the world, including some of the world's largest, most sophisticated companies in the world, are passed together with band-aids that involve spreadsheets. And I'm curious to hear from you.

Are you using spreadsheets in your organization? I'm guessing probably yes. And I'm guessing there's probably more than you would like to be using. And I'm guessing there's probably more spreadsheets than you even know about within your organization.

Now, the reason I want to talk about this here today is not to advocate for more spreadsheets or to suggest that we should all just go back to spreadsheets where we're not already using them, but to get to the bottom of why organizations use spreadsheets. It's really easy to point fingers at spreadsheets as the problem, but really spreadsheets are a symptom of a deeper problem that organizations have failed to address for decades now, and that's what I want to talk about here in today's video.

If you're leading a digital transformation or ERP initiative, and you want to avoid the costly mistakes that most organizations make, that's where third-stage consulting comes in. We are an independent and technology advisory firm, meaning that we don't sell software, we don't take commissions from vendors. Our only job is to protect your interests and be on your side. We help executives and project teams plan, deliver, and recover digital transformations and ERP projects, reducing risk, improving adoption, and delivering real business value.

If you want clarity before you commit to your digital strategy or if something feels off track to you, feel free to reach out to us at thirdstage-consulting.com and my team and I would be happy to help. One reason why Microsoft Excel and spreadsheets are so common in today's corporate world is because for years now, systems have failed to deliver on their mission or their vision of fully integrated systems. Processes and workflows continue to be siloed.

They continue to be hampered by siloed systems, siloed data sets, workarounds outside the system. And despite decades of investments in ERP systems and customizations and other types of technologies, organizations continue to revert back to spreadsheets in some ways. Now, again, it's easy to point fingers at the end users that are using the spreadsheets and creating these spreadsheets, but the reality is in many cases they are reacting to the environment that they working They expected to provide end to end visibility to corporate executives But the reality is many of them don have the tools to do so So instead of saying they can do it because they don have the right systems to do it they create their spreadsheets to get the information they need, manipulate the data the way they need to, and in some cases to manually re-enter data across systems because the systems won't do it for them.

Even here in the 2020s, as we're helping clients implement some of these new advanced fancy cloud-based systems, we're finding that those systems can't do everything that they promise and so there's ends up being these nooks and crannies these gray areas within organizations where system can't do what they need it to do system isn't tailored for their exact needs they've moved to a common fit-to-standard clean core operating model in this new ERP system and since it can't do everything that they need it to do someone somewhere decides that they'll create a spreadsheet they'll create a workaround they'll create a way to get it done regardless of the limitations of the system.

And again, it's important that we don't just point fingers at the users that are creating the spreadsheets because it's not just that they're stuck in their old ways or they prefer to be using spreadsheets. In most cases we see it's because they don't have the right tools to integrate those processes and workflows the way they needed to. Another reason why spreadsheets are so common in the 2020s is because organizations don't have systems that are flexible enough to accommodate different exceptions and a changing world around them.

As we move to more cloud systems, we are inherently becoming less flexible with our technologies. And that's a broad generalization, of course. There are some cloud systems that are more flexible than others, but in general, cloud systems are not as flexible as the old on-premise counterparts that organizations once had. So if anything, we're seeing more spreadsheets now today because these systems are more rigid, they're more standard, they don't account for different exceptions and changing environments, changing assumptions.

And when a company changes and evolves as they always do, and they change very quickly, they're not necessarily moving lock, step and barrel with the way the software works. And so rather than say, we can't enter a new market or we can't service this new big customer because our ERP system won't let us, people figure out ways to do it by using spreadsheets. So it's important that if we want to really tackle this proliferation of spreadsheets in corporate America, it's really important that we start deploying technologies that are actually flexible, not rigid, not cloud-based SaaS systems that are vanilla off the shelf with zero customization.

That's the opposite of what we need. And while the big tech industry is moving that direction, end users are over here trying to figure out how do we re-insert flexibility into our operations. And the way to do that, and the easiest way for them to do that is to implement and use new spreadsheets. There's a concept in corporate America called tribal knowledge, and that's the knowledge that isn't documented.

It's not captured in a system, but it's in someone's head or some subset of people's heads. These are the people that have been at your organization for 5, 10, 20, 30 years. They know how things worked in the past. They know how things work today.

They know where the bodies are buried, they know everything. And a lot of that knowledge is not captured in a system, sometimes by design, sometimes by accident. But regardless, new technologies don't necessarily do a good job of getting tribal knowledge out of people's heads into the new system. So that tribal knowledge runs really deep in the way that many people are used to expressing or using their tribal knowledge is to use a spreadsheet in the format that they're used to capturing and analyzing that data.

In many cases, there's no place for that tribal knowledge in the ERP system because they can't handle certain capabilities or certain functions or workflows, or it wasn implemented in a way that could handle that So people continue using spreadsheets They continue capturing and manipulating data in a way that they able to in the easiest way they know how So that tribal knowledge runs deep and that's a big part of why so many people revert back to spreadsheets, not to mention the fact that in today's changing ERP landscape, spreadsheets are the one thing that has remained constant.

So there's just a lot more knowledge around Excel spreadsheets in general. But those are some of the reasons why that tribal knowledge contributes to the high adoption rate and the continued usage of Microsoft Excel spreadsheets, even in a world of more advanced technologies. If you are trying to achieve digital transformation success, turn to Third Stage Consulting Group. Third Stage's independent and technology agnostic consulting team helps clients define their digital strategies, select the right software, and manage their implementations.

With offices in the U.S., Europe, and Australia, our team helps the world's most forward-thinking organizations through their transformation pitfalls and risks. Whether you are embarking on an ERP, HCM, CRM, supply chain management, or any other digital transformation, contact third stage consulting to see how we can help you reach the third stage of transformation success.

Another reason why Excel spreadsheets are so common in corporate America is because people inherently want to feel like they're in control. They want to feel like they have ownership of their work. They want to feel like they're in control of their work. If there's certain expectations placed upon them to do their job, they want to know they can do their job in a way that is reasonable.

And in many cases, an ERP system or another standard enterprise technology isn't going to give them the flexibility they need and they feel like they don't have control over how that work gets done. You think about how easy it is to change an Excel spreadsheet. It's so easy to delete a column, to create a new worksheet, to create the logic that you need, to create a whole workflow within an Excel spreadsheet. There's some real powerful power users out there that know lot about Excel and can do magical things with Excel.

And the reality is, is that that flexibility is so much more than what an ERP system can provide. Now, a lot of leaders, a lot of technologists, a lot of consultants out there would say, well, that's a good thing. You need more standardization. You need people to give up the spreadsheets and move to a common operating model.

But like I said, that common operating model needs to have a certain amount of flexibility. And today's ERP systems aren't good at providing flexibility, but Excel spreadsheets are. So of course, it's reasonable to assume that people will find a way to feel in control and to get their job done in the way they need to. People aren't just going to refuse to do their job or refuse to give the information they need to give because their ERP system can't handle it.

What they do instead is they create the spreadsheets that allow them to do that. And what's really important is if we move away from a spreadsheet model, move to more of a centralized automated core ERP system, We have to understand from a change management perspective what people are giving up. That's the resistance that people lead with is the fact that they don't feel in control. And when they don't feel in control, they're not going to be on board with new changes like the new enterprise technology.

In today's day and age of AI and advanced analytics, cloud solutions, and all these ERP systems that can do a lot more than what most organizations are capable of doing themselves, it's oftentimes a situation where it comes back to the fact that simpler is sometimes better. Sometimes we don't need all the complexity that comes along with these big massive bloated ERP systems Sometimes we just need a simple spreadsheet a simple table a simple report and a way to get that simplicity is oftentimes to use a spreadsheet so before we point fingers at or be dismissive of why people are using spreadsheets in the first place we should be asking ourselves during a digital transformation how can we make things simpler for our employees and end users so we don't encourage them unintentionally to go back to using their spreadsheets if we deliver to them a simple and easy to use product something that's flexible allows them to feel like they're in control people will follow they will use that system but when it gets too complicated they're gonna try and simplify their own jobs and if the system won't do it for them they'll find a way to do it with excel spreadsheets so what do we do we know that spreadsheets are the most common system in the world we know in many cases it's the most hated erp system in the world because we're trying to get rid of these spreadsheets we're trying to stomp them out of our organization so we can get all that data all that knowledge all those workflows into a core system that can be scaled across the organization and that's good we should continue to strive for that but what we need to do is to understand the root causes of why these spreadsheets exist in the first place so step one is to understand what are all the spreadsheets you have what are they doing why are they being used are there better ways to be capturing some of that knowledge and what you'll find inevitably is that there are some spreadsheets that are just they're just there no one can really explain why they're there.

There's no good explanation. They were handed down from generation to generation, year after year, and no one can really explain why they're still using these spreadsheets, but there are certainly better ways that they could be doing things. But in many cases, that same exercise is also going to expose a certain bucket or a certain category of spreadsheets that are there for a reason. They're there because your current system can't handle the needs.

They're there because the current system isn't flexible enough. They're there because it's just easier for the employees to use. And so we've got to think about from a change management perspective, how can we not only capture the functionality and the knowledge that these people have, capture it in the new digital transformation. We also need to understand where the end users are coming from.

We need to help navigate that change. And we as a team have to understand why those people are using the system and what's going on in their heads. And that's the only way we're going to be able to overcome that from a change management perspective. And then finally, I'd say let's look at what the advantages of spreadsheets are.

As much as we want to look down on spreadsheets and say they're the problem, that's the problem we're trying to fix with new technology that's great that may be true but let's look at why they exist and what we can do to ensure that we're not creating an environment that encourages more spreadsheet usage so if we enable a digital transformation that provides flexibility simplicity we provide an easy way for people to do their jobs then they're not going to need to use a spreadsheet so that's the way we have to view our digital transformations is from a people first perspective let's look at the people first not look at the software vendors we're buying from not look at the system integrators they're gonna try and convince you to use all the cool bells and whistles.

Let's look at it from the perspective of how people are doing things and why they're doing things the way they're doing them and make sure that we can build on that and improve, but not do so in a way that throws the baby out with the bathwater. But I'd love to hear from you. What are your thoughts on spreadsheets? How do they exist in your organization?

What are some of the biggest reasons or the biggest drivers of why you're using spreadsheets? I'd love to hear your feedback in the comments below. I'd also love to hear from you any examples of how you've moved away from spreadsheets and successfully gotten people to be more comfortable with more modern technology. I read all the comments, so be sure to leave your thoughts in the comments below.

And if you'd like to learn more about digital transformation and just general tech trends, be sure to check out our annual digital transformation report. You can find that by scanning the QR code right here or go to the links below. So if you found this information useful, hope you have a great day. Learn more about us and download independent reports, videos, and other best practices at thirdstage-consulting.

com.