This content is part of the Essential Guide: A guide to using Excel as financial accounting software

Six tips for making the move from Excel to BP&F software

Users and experts share tips on replacing spreadsheets with specialized software for budgeting, planning and forecasting.

So you've decided to call it quits with Microsoft Excel -- at least when it comes to planning, budgeting and forecasting (BP&F).

That probably means you've also decided to switch to more modern and collaborative BP&F software that can meet your business needs by consolidating and centralizing financial information. After all, doing so makes it easier for finance executives to produce more accurate budgets and perform what-if analyses.

But making the decision and selecting a vendor is just the first major phase in the process. Now comes the hard work of getting ready to migrate to the new system.

Here are some tips from experts and users to help prepare for moving to a dedicated budgeting, planning and forecasting system.

1. Ensure that the data from financial systems can flow easily into the BP&F system. "If you're an SMB [small to medium-sized business], in particular, you're probably going to work with the vendor or the partner to help ensure that you have the right integration in place," said Laurie McCabe, partner at SMB Group, which is based in Northborough, Massachusetts. "Today there are a lot of pre-built integrations, for example NetSuite, which has pre-built integrations with Adaptive Planning and Host Analytics. It's probably something that someone will have to configure and set up for you, but it's easier because it's already pre-integrated."

2. Prepare to migrate as much data as possible. "Your forecast is only as accurate as the past data that you have. The system won't work without data," said Tyler Wilson, senior ERP consultant at Panorama Consulting Solutions, based in Denver. "That doesn't mean that it's easy, but it's one of the steps you have to take."

3. Work with the consulting team to lay out the table structure to determine what data is needed and how to bring it in. "It's important to start the process early, so you can start scrubbing your data to make sure that it's easily transferable into the new system," Wilson said. "But it's important to be sure that what you put in is valid and accurate, so have the business owners scrub the data and validate it more than once. That's where your largest effort should be."

4. Go in with a good model. "I have to give Excel some credit because it's a great place to prototype a model and figure out exactly what you want," said Brandon Ballew, senior vice president of operational finance at Atlanta-based Gentiva Health Services Inc., which switched from Excel to software from Adaptive Insights (formerly Adaptive Planning). "We had developed a very good [Excel] model over the years and we just had to translate that and put that into Adaptive Insights. We made some tweaks and changes to it when we were inputting it but we were able to get that translated in there."

Ballew's bottom line: Make sure you know what you want -- and know your processes. "Adaptive Insights, like most tools, is really an accelerator of your process," he said.

If you're not sure what the process should look like, but currently have a bad process, adding BP&F software will make it worse.

"So you have to know what you want, what it looks like and then use the technology to enhance that," Ballew said. "We spent two months in prep time making sure that the model was right that we wanted, that the outputs were going to be right . . . and once we knew what we wanted we were able to take that to Adaptive Insights, and they helped implement it into the technology."

5. Know your business needs and requirements up front. "I don't think you can ever know all of your business requirements up front in any situation, but my lesson learned is try to be 80% to 90% sure you know what you want," said Monica Ross, director of strategic projects at Minneapolis-based Parsons Electric LLC, an electrical and technology provider that migrated from Excel to BP&F software from Host Analytics Inc.

"When we went through our implementation, we were also trying to do some re-engineering of how we manage the financials of our business," Ross said. "For example, we wanted to create more operating groups so managers would have a little tighter circle of control into information about their specific business rather than being merged with other business lines. But don't try to remodel your house while you're trying to implement the software package. It just gave us a lot of stops and starts that I think were preventable. So I'd be more organized."

6. Don't over-engineer the solution. "We had this belief that the software would be so much more sophisticated than what we could do in Excel, so [we thought] let's make a rather complex or intricate forecasting methodology for our long-duration construction projects," Ross said. "We had these ideas of creating formulas or models to mimic many things we learned in the past about construction projects -- how they accumulate and cost month over month and how we recognize the revenue."

Things didn't go as planned. "The solution architect we were working with on the software called me one morning and said he was up until midnight the night before figuring out how to do what we wanted," Ross said. "He said, 'Well, it works great, but you're going to hate it. It will be hard for anyone else to validate the results. You'd have to be a very sophisticated formula builder and user to get it, and I don't find it to be practical.' He said it would take us so long to explain it to people that it would slow us down -- and the whole objective of forecasting is that it should be rapid. So we succeeded, but failed."

Ross' lesson: Keep it simple. Build for what you really need and what will meet your requirements. You can always make enhancements later.

"Don't go into it thinking, well, this software can cure cancer and do other things because you probably won't be happy with the results," she said.


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