Why Excel Can’t Handle IT
Originally, we envisioned ClearCost to be used as a forecasting tool to balance our supply and demand.
We soon discovered that ClearCost could do far more than this and ClearCost is now our source of truth for all our costing/pricing information.
— Tony Grant
Chief Information Officer
Information and Technology Partners
Building an IT Financial Management System in a spreadsheet is like building a General Ledger system in a spreadsheet. Yes, you could do it given enough time and resources, though why would you?
Spreadsheets are effectively a ‘single user’ solution that are typically:
Benefits of replacing spreadsheets according to Gartner¹
“Spreadsheets are great for many things, however, when it comes to running the business of technology, they’re inadequate and unreliable. CIOs and other tech management leaders must replace them with purpose-fit solutions.”
¹ Gartner: ‘Start Here: Know “Why” Before You Buy an ITFM Tool’, by Robert Naegle, Jim McGittigan, 2014.
If you already have complex spreadsheets or other bespoke systems with unique customisation (not always a good thing), they are typically totally dependent on the author/creator. These can be massively complex systems, and to be able to generate costing data from them is a testimony to the skills and many months (or years) of development and “tweaking” time that they typically require.
Spreadsheets are typically a ‘single-user’ tool that are too complex for other ‘users’ of the information to work with, too difficult to do meaningful reporting from, not accessible to business management, and high-risk if the ‘expert’ who developed it leaves. If a spreadsheet formula is wrong, this could result in incorrect costings which impacts data integrity.
The limitations related to spreadsheets include poor scalability, automation and agility as financial and operational data inputs change over time and increase in volume. Lack of control or governance around spreadsheet versions leads to errors.
Spreadsheets do not provide the service view that IT needs to manage spend in a way that is meaningful to the business. CIOs need operational data about IT assets, applications, labour, projects, vendors, etc. merged with corporate financial data to demonstrate true cost of ownership2.
Spreadsheets quickly fail to keep pace, when reporting frequency shifts from annually or semi-annually to quarterly, monthly or even weekly. Similarly, as the number of data sources expands and ETL requirements increase, purpose-built tools will again provide significant advantages. Over time, cost models that have been built quickly will need to be adjusted. Models will need to be expanded, complexities addressed and/ or allocation methods changed dynamically. These adjustments are needed in order to resolve stakeholder concerns about the accuracy3.
The fundamental concept of running a critical part of your business on a spreadsheet must however be questioned. As good as a spreadsheet is, the old adage of “horses for courses” applies.
There are numerous benefits to adopting ClearCost as your IT Management solution:
2‘IT Financial Management, Maximising IT Value for Your Organisation’, by Michael MacNicholas, Alice Pearce, Deloitte, 2018.
3‘CIO’s Must Master Four Views of Spend to Manage IT Finances’, Jim McGittigan, Robert Naegle. Published by Gartner, 23 April 2019.
“Before we implemented ClearCost, the majority of our cost tracking was done through Excel spreadsheets, which lacked the analytics and audit capabilities we desperately needed.
With ClearCost, we’ve gained granular visibility into service costs vs actual charges, allowing us to identify the profitable and non-profitable services in order to justify departmental restructuring and changes.”
Chief Financial Officer
Department of Shared Services
- Accurate data extraction via an intuitive, multi-user experience through ClearCost, it’s not only necessary, it is imperative.
- Automated, meaningful reporting eliminates manual report creation and preparation, which can often by repetitive, tedious, and incredibly time-consuming, especially if you didn’t build the spreadsheet and do not understand its complexities.
- Accessible to business management with data & analytics available in real-time, which means information is available immediately and no time is wasted.
- Eliminate risk by no longer depending on the one person who created the spreadsheet, or if that person shares the file with unauthorised users therefore posing a security risk. Increase business scalability & agility by eradicating inaccuracies, security issues, and limited usability.
- ClearCost is a comprehensive Financial Management solution eliminating the fragile ecosystems of spreadsheets that are too complicated, full of errors, and lack credibility.
Why Excel Can’t Handle IT Cost Transparency
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