Is the reign of the spreadsheet coming to an end or just beginning?

The first commercial skateboard was invented around 1959, while the rollerblade was around 1980. If you visit Nike’s website today, you will notice that skateboarding is a product collection alongside golf, basketball, soccer, and other popular sports, while rollerblading is nowhere to be seen. The point is that the date a product was released is not the only factor in that product’s adoption decades later compared to alternatives launched a generation later. Neither is the release date the only factor in how modern that product is considered to be. Especially if the product continues to benefit from innovation along the way. Today’s skateboards have design and innovation features not found decades ago, but the essence of skateboarding is pretty much the same. 

The best example of business software staying power is Microsoft Excel. Go to most companies in any market and any industry, from global multinationals to SMBs, and you may find someone spending hours on a spreadsheet to build their financial plans and performing other analysis. 

Business software vendors including Oracle, IBM, Workday, and Anaplan, have attempted to replace Excel within corporate finance and accounting offices. Decades later, it appears that Excel has won the popularity battle against older and newer FP&A software alternatives to the spreadsheet. Now more recently, Google Sheets is carving out a devoted following of its own.

While FP&A software is a multi-billion dollar market today, these vendors claim 1000s of clients while Excel and Google Sheets are in the millions. 

The challenges of using spreadsheets to support complex business processes are well documented, but the adoption is not slowing down. Instead, this has been an ongoing tug of war between senior executives like the CFO and individual contributors. 

The CFO  may prefer to see the organization on a controlled and auditable software system with centralized data. Still, the business analysts who have to roll up their sleeves and spend their days within these tools have overwhelmingly voted through the years of their strong preference for spreadsheets. 

Software vendors have attempted to develop grids of rows and columns within their software to mimic spreadsheets but none have really hit the mark. The result often amounts to a limited proprietary spreadsheet locked inside another application. In other words, the experience is rigid and limited compared to a real spreadsheet. If you give most finance and accounting users a choice between that and an actual spreadsheet, the choice is easy. The real spreadsheet tends to win. Although there have been different flavors of the spreadsheet over the years, including Lotus 1-2-3, today, it is a duopoly between Microsoft Excel and Google Sheets.

With Google and Microsoft offering compelling and modern collaboration features within their online spreadsheets, the work to dethrone them and convince millions of business users to pivot towards more formal business software systems may be more challenging than ever before. 

WSJ’s CFO Journal author Nina Trentmann further describes the current analysis of today’s finance chiefs regarding what to do with Excel within their organizations: 

“Microsoft Corp. moved Excel and its other Office products to the cloud a decade ago and has offered a number of new features and updates since. But some finance chiefs still want to reduce their reliance on the application in favor of programs that more efficiently automate data collection and analysis. They say there are limitations to Excel’s effectiveness, with users having a tough time keeping track of changes and verifying financial information.”

Access the full article here.

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