ERP Vs. Spreadsheets: A Debate Of Business Strategy, Not Technology

Rainer Zinow

With all the chatter surrounding emerging technology – such as artificial intelligence, conversational chatbots, and machine learning – small and midsize businesses are feeling more confident about competing against their larger rivals on a level playing field. But before jumping on the bandwagon, they need to tackle their longtime reliance on one popular tool – spreadsheets.

The numbers don’t lie: Businesses love spreadsheets. Over 750 million users worldwide rely on Microsoft Excel to calculate, analyze, and present business data to support their position. And while the flexibility and speed of this popular tool are highly valued, growing companies eventually arrive at a point where their relationship with spreadsheets doesn’t make sense anymore.

According to the analyst connection interview with IDC’s Ray Boggs, vice president of small and midsize business research, and Mickey North Rizza, vice president of ERP and digital commerce research, “The fundamental needs of a business change as a company grows … managing via spreadsheet and basic accounting becomes inadequate and harder to sustain as the organization expands and becomes more complex.”

Loyalty to spreadsheets may hurt your chances for future success

For small and midsize companies that are landing deals and wowing clients, life couldn’t be better. Salespeople are pumped about growing customer interest. Business leaders are amazed to see that an idea on a cocktail napkin is becoming a revenue-generating reality. And marketers are thrilled that investments in social marketing and e-commerce are paying off.

However, back-office functions such as HR, finance, and IT may have an entirely different experience. Tracking the details of business performance and emerging opportunities with a series of spreadsheets is most likely turning a once-simple task into a headache of complicated consolidation efforts, redundant data, and questionably biased insights.

Take, for example, the day in the life of your finance leader. When your business ran a simple operation with a barebones staff, it may have been acceptable to manage tasks and monitor opportunities with every team member’s personalized spreadsheets. The finance leader would manually collect all these files and interpret the data to determine where the company was heading, if signs of risk may pose problems, and how to best leverage past successes profitably.

But as the business continues to grow, the volume of these spreadsheets increases as well. In turn, the data analytics workload piles up and falls apart – leading to a massive bottleneck for decision-making. Data-entry errors and redundancies are missed during manual data checks and processing. Information focuses on what happened in the past, not what will happen in the near- or long-term future. And perhaps the deadliest sin of all is the inability to provide insights at the exact time they are needed.   

The foundation your business needs to move forward

Whenever I use the term “ERP” when talking with a small or midsize business leader, a sense of trepidation can be felt in the room. The most common response I hear? It usually goes something like this: “ERP. Isn’t that a heavy-duty, expensive solution built for large enterprises and conglomerates? How in the world can this technology solve my organization’s problems? Surely, my operations are too straightforward for something like this.”

This perception may have been accurate 35 years ago, but so much has changed in the world of ERP since the arrival of cloud technology and in-memory computing. Now offered as a software as a service (SaaS), ERP has become a sophisticated, smart solution that optimizes core processes, data management, and analytics – when you need it, without hiring more IT resources, and with a low monthly subscription.

In the IDC analyst connection interview, Boggs and North Rizza noted that adoption of next-generation ERP technology can help growing businesses create a comprehensive framework for delivering changes scaled to evolving business needs. “Some ERP solutions tailored for the midmarket can be purchased as an integrated suite that includes HR or CRM modules that can be ‘turned on’ as a company grows or when it’s needed to help enhance coordination while avoiding disruption. For first-time ERP users, this capability can help future-proof an investment to ensure that capabilities can be added when the time is right,” they said.

ERP: Not just for IT geeks and conglomerates anymore

You don’t have to be an IT geek or an executive from an international conglomerate to know that digital transformation is picking up in intensity and becoming a significant indicator of the future success of a business. Such innovation encompasses both technical strength and technical functionality – and an underlying ERP platform is what brings them together.

So, when new opportunities arise, a cloud-driven, in-memory-enabled ERP platform can help you quickly change small things like a simple workflow or big stuff like a core process to get ahead of the competition. More importantly, your business leaders will soon see how running operations with real-time information and instantly scalable data management and analytics capabilities is a more cost-effective strategy for accelerated growth – instead of endless piles of outdated spreadsheets.

Find out the answers to five common questions that small and midsize companies ask about ERP systems. Read the IDC analyst connection brief, “Small and Midsize Businesses Put ERP at the Center of Digital Transformation Strategies,” featuring IDC’s Ray Boggs, vice president of Small and Midsize Business Research, and Mickey North Rizza, vice president of ERP and Digital Commerce Research.


Rainer Zinow

About Rainer Zinow

Rainer Zinow is the SVP of SAP Business ByDesign, responsible for the solution strategy and partner engagement. Prior to this role, he was responsible as development lead for User Interface, Analytical content and Knowledge Management of native HANA applications.