Breaking free of spreadsheets is an important milestone in the journey to a mature integrated business planning process.

Excel is a natural starting place because everyone is familiar with it, but spreadsheets quickly become a limiting factor, impacting performance and holding back organizations from improving their integrated business planning process.

Integrated Business Planning processProductivity is typically the first barrier companies encounter. Each month at the beginning of the integrated business planning cycle, reams of data are required to capture a current picture of demand, supply and financial plans and then identify gaps. Manually collecting and reconciling this data in spreadsheets is time-intensive and error-prone. It often takes so long that by the time the consensus meeting takes place, much of the data is outdated. Wouldn’t it be better if the gaps presented to executives in the final S&OP meeting reflected today’s business challenges instead of problems from two weeks earlier?

More importantly, the value of a consensus plan is only as good as its execution. Effective integrated business planning processes require closed-loop integration to core enterprise systems – both for the initial extraction of data and then to publish the final plan for execution. The last time I checked Excel’s product specs, there was no mention of certified adapters to SAP and Oracle ERP for streamlined integration. Don’t hold your breath waiting for this to become a new Excel feature.

Lastly, the use of spreadsheets limits the expansion to more advanced capabilities such as automated S&OE and multi-enterprise integrated business planning processes. Some leaders are now using current information and machine learning algorithms to sense demand; this real-time demand can then be connected to real-time supply response, automating much of the S&OE process. This is of course a non-starter with spreadsheets. So too is the evolution from internal to external collaboration processes as Excel is ill-suited to bring together demand information from channel partners and supply information from material suppliers and contract manufacturers. These types of advanced integrated business planning capabilities are only available to those who no longer rely on spreadsheets.

This article originally published in Consumer Goods Technology.