Love them or hate it, spreadsheets have been around since 1979 with the release of VisiCalc, a program written for the Apple II computers. Its popularity grew from the desire to take a 20-hour bookkeeping chore into a few minutes of data entry.
In one FutureCFO workshop of finance leaders, despite two-thirds using some of the most advanced ERP tools in the market, nearly all concede the use of spreadsheets as part of work.
Forty-three years on, spreadsheets are still a staple of finance functions for companies big and small. To be fair, there is no lack of new technologies aimed at displacing the beloved spreadsheet.
Why do you think finance executives in Asia are reluctant to leave their spreadsheets?
Albert Leong, managing director, Asia at Esker says mining information from different systems stored in various areas (such as an Excel-based ageing report, collections call notes, ERP open invoice information, and cash application systems, just to name a few) is still exported, sliced, and diced, and often manually compiled and pushed into a report.
Esker, a business process and document automation solution company, has set its mission to “strengthen business relationships, improve the exchange of business-related documents between organizations, and enhance our customers' productivity by empowering people.” And part of that journey includes replacing spreadsheets in favour of greater automation in how finance does its job.
Esker’s Leong comments that Excel is usually the format used when exporting reports from systems and that is the reason why people are reliant and reluctant to leave.
According to Jenji’s head of Asia-Pacific (APAC), Lee Chee Leong, there is a general desire by companies to reduce reliance on spreadsheet applications in favour of more efficiently automated data collection and analysis.
He conceded, however, that employees remain reluctant to give it up even though most would admit that it’s time-consuming and result in errors that go unnoticed.
“Why? It’s largely due to habits and mindset – this is what they know and what they are comfortable with. It’s also not just IT that needs to change if finance executives leave their spreadsheets, it’s also the way people organise finance tasks, how they reorganise workflows and processes to ensure that the transition away from spreadsheets succeeds,” he opines.
Jenji’s core business is to ease expense reporting.
Mark Wilfred, head of solutions consulting, Southeast Asia at SAP Concur, says the raison d'être for the stickiness of spreadsheets is familiarity. He comments that most accounting graduates have more exposure to Excel than finance-related software solutions through their college education), lethargy to pick up new technologies, and sometimes difficulty in getting approval for finance technology investment.
“The truth, however, is that modern cloud-based solutions can make the upgrade proposition very attractive cost-wise, and new technologies like AI and ML can dramatically aid usability and productivity,” he continues.
As a SaaS-based platform, SAP Concur connects expense, travel and vendor invoice spending in one system providing a single way to manage spending from end to end for greater visibility into transactions, improve compliance, and simplify the process for everyone – finance and employees.
What and where is the holdup in the quest to automate (not using spreadsheets) how companies handle cash?
Jenji’s Leong says the hold-up is usually either on a strategic or operational level or both. Strategically, there needs to be a top-down commitment and appreciation of how automation can lead to better data management and analytics. CFOs need to view automation as more than cost savings technology and see it as revenue generation technology.
“At the operational level, it requires the buy-in of all departments involved, not just finance, but also HR. If departments don’t have the same motivation or are not aligned with what the company is trying to achieve through automation, it is unlikely to be successful. It’s largely about changing habits rather than simply paying for an automation tool,” he remarks.
Esker’s Leong agrees and adds that finance leaders leading a team should always be the driver of a digital transformation.
He posits that to break the hold up, there must always be a driver and change management within the organisation. “The human factor is the holdup, and the driver must acknowledge and understand the need for change before implementing a solution. In other words, companies simply need to drive and have the mindset breakthrough,” he adds.
In bringing up the automation route, Wilfred says delays are often caused by an insufficient volume of transactions, lack of process standardisation, and/or inadequate understanding of how automation technology works. “Some finance leaders may also fear that difficult-to-rectify mistakes can occur when the changes are not properly managed,” he comments.
Automated solutions for handling payments have been around for some time. In your view, what needs to happen for the greater adoption of such solutions?
The key is to understand how technology and automated solutions can truly unlock and optimise value and drive growth. “It’s more than just streamlining financial processes and cash management, it’s seeing the bigger picture of how it can generate growth,” says Jenji’s Leong.
Wilfred acknowledges that some companies don’t adopt automated payment solutions because they don’t want to pay the transaction fee or exchange rate difference that the convenience offers.
“This difference also makes payment reconciliation more complicated from an accounting standpoint (e.g., banking fees). Both challenges present mental obstacles that some finance leaders cannot overcome. I recommend, however, that these leaders take time to weigh the efficiency and cash flow visibility benefits of automation against the slightly higher complexity before concluding,” he continues.
Today’s business leaders have a large variety of priorities, from increasing profit to reducing employee turnover to promoting well-being at work. Esker’s Leong suggests one way to ensure long-term success is to make it an ongoing goal throughout the organisation by implementing a true cash culture. “Especially in times of uncertainty, getting everyone to maintain sustainability and cash flow is essential,” he adds.
How should the leadership approach change this culture/mindset around cash and this dependence on spreadsheets?
As part of the journey of changing old habits, Jenji’s Leong suggests including the team in understanding what digital transformation means to them, and the company – on an operational as well as strategic business level.
“Have them is the big picture and be motivated by the grander vision. Leadership should also be employee-centric – to change the mindset and habits of employees, you need to understand the challenges they face and provide them with an automation solution that would help them,” he offers.
This is the age of technology-enabled business. Wilfred opines that the company that uses technology best gains an edge over competitors, and it’s important for leaders − including those in the finance department − to embrace the marvels of technology and spread this conviction to their teams.
He further notes that automation aids visibility, control, compliance, and efficiency. It delivers clear advantages to the company, and when the company benefits, so does its staff.
For his part, Esker’s Leong believes that to encourage adoption, it’s imperative to establish, communicate and implement standard policies across the organisation. Cash management policies should focus on budgeting, forecasting and financing and indicate how to handle day-to-day activities such as collections, procurement/ordering and payment.
“Keep in mind, too, that cash flow management is not just a finance issue; it’s an operational issue. All departments – from sales and marketing, procurement, and production to finance and treasury – must coordinate for optimal results. To drive this point, many leading companies link staff compensation to achieving specific cash flow targets,” he concludes.
