IT Finance has long enjoyed using Microsoft Excel for analysis needs. While Excel and other spreadsheet solutions promise instant results, ease-of-use, and high configurability, these benefits often hide a dark side. It’s one that can cost IT Finance professionals in terms of lost effectiveness and efficiency.
I interviewed Chris Levitt, a former CFO of IT on his take. Here’s his thoughts on how an overreliance on spreadsheets can hold you back from delivering valuable analysis and running IT like a business:
- Lack of Control and Versioning: Many spreadsheets contain errors and are not subject to a quality control or review process. Version control for spreadsheets is still in its infancy. Even with all the disciplined efforts to use only SharePoint or a Wiki site, it’s not uncommon to see multiple versions of a spreadsheet start popping up in emails, chats, various employees’ computers, and even on the file share itself.
- Data Validation: While back-end reporting and ETL tools generally have validation rules; all bets are off once the data is exported to an end user in a spreadsheet. An end user collecting additional data from other sources will rarely use data validation appropriately, and may be prone to merging data sets that are incongruous, incomplete, and ultimately add up to an incorrect number.
- Multi-Source Integrity: IT Finance is especially prone to problems of incomplete data and what Levitt calls Multi-Source Integrity. More than any other area of the company, IT has a myriad of cost drivers, operational data, and metrics that tie to financial performance. When corporate GL structures are mapped to IT service catalogues and operating metrics, the number of connections and sources becomes unwieldy and improbable to manage accurately.
- Freshness: Data changes constantly in IT. And the cycle of change is rarely in-sync with the corporate finance cycles of book close, budget updates, and variance analysis. When corporate finance gets the time, they aren’t typically looking at IT to partner on issues of timing, timeliness, and time-accuracy of reports. Corporate finance is more an accounting partner than an analytical partner in many cases.
- Multidimensional Analysis: Assuming the data is good, spreadsheets are difficult to use with time-series analyses that have multiple dimensions. For example, simply cutting across the multiple views of project management data is very hard in a spreadsheet. Even when it can be done, it often requires you to become a spreadsheet engineer, and it’s possible that the end result makes sense only to you and nobody else.
“Many companies have a mix of these problems. And some of these problems are mutually exclusive,” Levitt says. “Tighter control only weakens freshness, because it takes time to improve quality of data. Better data validation requirements hamper Multi-Source Integrity, because many IT systems, before going green on data quality, require a huge amount of data quality improvement. There’s no room for iteration and no view into the quality of data coming from multiple systems.”
There’s got to be a better way! Apptio’s Cost Transparency Foundation solution is a SaaS application that automates your monthly analysis of IT financial performance against plan and shows what drives your costs for your towers, projects, labor, cost centers and more.
Less Data Wrangling, More Analysis with Apptio
With Apptio Cost Transparency Foundation you can refine analysis and author ad hoc reports in minutes through familiar spreadsheet capabilities like pivot, slicers, filters and formulas. Apptio even helps you improve internal control and integrity of IT cost reporting by transitioning from error-prone spreadsheets to a unified system reconciled against corporate financials.
While spreadsheets will continue to serve an important purpose, Apptio gives you a way to use them in a way that adds value without contributing to any of the risk factors above. For example, Apptio lets you export to Excel and PDF, and provides bi-directional integration with PowerPoint that can dynamically update slides when data changes.
It’s time you upgraded to a more evolved cost transparency and management solution. Apptio can help. You can learn more about Apptio’s approach to automating IT cost transparency in this white paper.