Spreadsheet Mishigas

For some reason, McKinsey & Company publishes a newsletter-report on weekends that I dutifully read when I should be watching sports or otherwise recreating. Call it a busman’s holiday. They call it “The Week in Charts” with the nerdy subtitle, “All the Week’s Data That’s Fit to Visualize.” I love it.

Recently they did a deep dive on supply-chain planning — which you might think is a long way from CRM — but you might be surprised. The article, “To improve your supply chain, modernize your supply-chain IT,” could be easily repackaged as a directive to the front office as well.

The shocking finding to me, and the connection with CRM, is the statistic that 73 percent of respondents said that spreadsheets are their primary supply-chain planning tools.

Since I recently completed yet another research project indicating that spreadsheets were also a majority tool for sales tracking — not SFA — this struck close to home.

My data showed SFA uptake was in the mid-forties which is almost breakeven and up significantly from the 25 percent we had tracked it at for many years. So, in other words, progress. But after all this time, not quite half, doesn’t seem like a victory at all.

Penchant for Spreadsheets

It always puzzled me why spreadsheets had such a stronghold on selling.

The front office and I innocently figured that the front office was just somehow backward and not as attuned to the benefits of modern technology as the back office. After all, the back office was ruled by iron-fisted, penny-pinching CFO’s, right? Not. So. Much. Now I can consign that belief to the folder labeled Easter Bunny.

It looks like we love our spreadsheets, despite their limitations. I used to say you can know where the next big software innovation will come from just by looking at what the hot new spreadsheet ideas are, and that was largely true too.

When platform technology emerged, I assumed everyone would see what I saw — easy to build and maintain applications, backed by databases, that would enable people to make better apps than the spreadsheets they clung to.

But you know the story. Platform was adopted, though not by the spreadsheet jockeys. They really didn’t want to learn something new.

To this day I still know of a person who writes letters in spreadsheets. Just make column B about 80 characters and you’re just about done. I know that’s extreme. Most people gave up spreadsheets for auto-spellchecking but how many didn’t?

As good as spreadsheets are at some things, they are not applications with all the process rigor that implies. We use spreadsheets not just because we already know how to, or because they are easy, but because they are a do-it-yourself tool. There’s no need to submit a request to IT and wait weeks to have something implemented to perform what-if analysis.

Spreadsheets give us the flexibility and immediacy we need to get stuff done.

Spreadsheet Shortcomings

Nevertheless, spreadsheets are largely digital tools for manual effort. In a world whose supply chains now gird oceans in highly complex webs, they are inadequate.

Much the same can be said about selling. It’s a complicated effort to understand a customer’s need, walk them through a buying process, and maybe start all over when the primary buyer leaves or gets promoted.

Whatever the advantages of spreadsheets, their key shortcoming is that they don’t have databases behind them and when you change a datum, the old value is gone.

That’s why I think it’s time for two things.

First, eliminating spreadsheets from those areas that are better served by real applications for all the reasons stated. Second, taking a second or third look at platform-based CRM.

Try to visualize what it would be like if admins and even talented sellers were able to manipulate some of the ways that SFA works.

I’ve seen too many examples of businesses that adopt platform-based CRM who can create custom processes that suit their customers to a T.

The benefits are huge because the data is automatically captured in a database that is accessible by analytics and machine learning.

90s Mode

If the McKinsey data is right, and I believe it is, and if my data is right, and I have seen similar results over multiple surveys, then despite the wonderful applications we have in the data center or the cloud, we’re still operating in 1990s mode.

Maybe we’ve gotten away with this for a long time, but world events have conspired to flash a warning sign that it’s time for change.

Denis Pombriant

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.

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