When it's viewed in the context of the long history of financial automation, Microsoft Excel remains a marvel. It came along in 1985, when spreadsheets were still the cool, killer app of personal computing, but ran on bland, character-based operating systems such as MS-DOS. Excel brought a measure of style and user friendliness by debuting on the Apple Macintosh, and soon after -- when it could also be run on an admitted, and third-rate, knockoff called Microsoft Windows -- propelling its creator to the top of the software industry. Replacing Excel wasn't on anyone's radar.
Today, Excel is still not the only spreadsheet program, but it's the most widely used one, especially in corporations and anywhere that number crunchers -- be they stockbrokers, scientists or nonprofit managers -- need a versatile tool for data entry, calculation and reporting. Excel can do amazing things like run Monte Carlo simulations and financial models and spit out three-dimensional bar charts, but it remains fundamentally a tool of individuals.
Collaborative processes such as budgeting, planning and forecasting tend to break down because Excel is bad at reconciling multiple versions of the same spreadsheet and preventing errors when changes are made. That's why many companies are replacing Excel and moving financial processes off of spreadsheets and onto specialized software.
There are nearly as many routes to that goal as there are reasons for replacing Excel and making the migration. Many companies have decided that Excel is unfit for finance, despite recent improvements. Imperfections abound: One study found that 88% of spreadsheets contain some kind of error.
But unsurprisingly, software vendors large and small stand ready with Excel alternatives. Perhaps the most popular one is cloud-based financial analytics software. Moving to these often user-friendly programs is made easier by the use of spreadsheet-like user interfaces, so Excel users will still feel at home.
Another common option is so-called budgeting planning and forecasting (BP&F) software. Financial software vendors admit that the terminology is getting confusing -- how does BP&F differ from other processes, such as financial planning and analysis, for example? All have the same goal: getting enterprises off Excel and onto a more collaborative, data-savvy platform for their most critical financial needs.
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