In the age of technology that we live in, a human error shouldn't be the prevalent and destructive force that it remains to be. Unfortunately, it still is, and the reason behind that is that humans have a hard letting go of old habits.
Take spreadsheets, for example. Even with all the analytics, we have at our disposal today, the majority of CFOs are still using spreadsheets for budgeting, recording, and forecasting. That's according to the 2019 Global Private Equity Survey, where many of the same CFOs also admitted to facing operational issues, which affected their respective organizations' margins and ability to grow.
Excel spreadsheets are an outdated method for recording financial and operational data, mainly because it is a vector for human error even in the higher echelons of the organization. Business consultant and actuary Louise Pryor illustrates just how significant spreadsheet errors are, estimating that, on average, only one in five spreadsheets in an uncontrolled model will contain correct results.
Why it is Time to Say Goodbye to Spreadsheets
Spreadsheets are easy to create. That's about the only advantage they have. However, when it comes to their shortcomings, the list is long and alarming.
When speaking about spreadsheet errors that rang across the world, the first that comes to mind is the infamous minus sign omission, which cost Fidelity's Magellan an estimated $1.3 billion. The minus sign omission on Fidelity's net capital loss, which read $1.3 billion, occurred when the accountant was trying to transcribe the firm's financial records to a separate spreadsheet. Fidelity had a $2.6 billion discrepancy they couldn't understand.
In June 2003, Canadian power firm TransAlta lost $24 million after a cut-and-paste spreadsheet error increased their power transmission hedging contracts with the US at a dramatic rate. The CEO at the time said that the spreadsheet error was not spotted even during the final appraisals before bids could be ranked. A simple clerical error cost the firm tens of millions of dollars simply because a spreadsheet was involved.
It's time to say goodbye to spreadsheets, not only because they are prone to avoidable errors, but because there is a much better solution.
Introducing the Future of Financial Performance Management
IBM's Performance Management Solution, Planning Analytics, is the future of business performance management. In fact, if you want to plan 80% faster? According to Forrester, IBM can help.
"Forrester determined that IBM Planning Analytics delivered savings of up to 63% when completing annual budget cycles. It also provided 80% percent faster-planning processes and 20% time savings in completing forecasts."
It offers sales performance management, integrated planning, application performance management, asset performance management, and to companies that still rely on spreadsheets, financial performance management.
As far as smart analytics platforms go, IBM's blanket solution covers every aspect of organizational management, spanning from increasing sales to monitoring app performance to forecasting to managing employee healthcare.
IBM's financial performance management solutions offer integrated functionality to increase organizational flexibility. By streamlining your planning, budgeting, and forecasting processes, this smart analytics tool puts your organization in a better position to adapt to the rapidly evolving business landscape.
Planning Analytics can help your organization in the following departments:
Get smart assistance with inventory and supply chain planning as well as S&OP planning.
Benefit from enhanced forecasting, sales capacity planning, and tailor your sales goals with territory and quota planning.
Acquire an edge over the competitors with IBM's strategic, operation, and corporate planning, which comes with budgeting and forecasting functionality as well.
The smart analytics platform handles promotional planning, campaign management, and revenue planning, creating a central hub from which to coordinate your marketing efforts.
- Human Resources
Plan your workforce through the IBM platform, which enables salaries and head-counts to be managed within the software.
IBM's range of organizational management tools also offers project and portfolio planning.
IBM Performance Management Solutions centralizes organizational workflow, creating accountability, enhancing transparency, and ultimately streamlining organizational processes by integrating the financial and operational aspects into a single platform. Take the next step, watch our webinar on Financial Performance Management in the Industrial Market and learn how analytics and IBM Planning Analytics software will optimize your organization.