According to a recent study by SunGard Consulting Services, a majority of organizations surveyed were using outdated reporting and analytics techniques. The study concluded that while advanced data handling and reporting processes are widely available, they were not being acquired and implemented.
This phenomenon has been a big problem in the credit union industry for years. Backward-looking, spreadsheet-based system (SBS) reporting and analytics continues to be the norm in many institutions.
When asked why newer reporting and analytics tools are not being used, many credit union decision makers cite cost as the driver. Justifying the price tag for new technology and processes seems difficult. The spreadsheet-based status quo is often judged to be the lower cost alternative. This might be an inaccurate perception.
There are two types of cost that result from using the old system: opportunity cost and the invisible overhead cost of relying on spreadsheets.
Opportunity cost is sometimes tough to quantify so decision makers tend to shy away from using this as the base for a business case. A more promising approach to building a solid argument for this investment is to expose the real cost of spreadsheets.
Bringing data together from multiple organizational silos is an important part of comprehensive reporting and analysis. Yet, a SBS is a poor tool for this task
- Labor Intensive - Most spreadsheet-based processes require one or more knowledgeable employees to spend many hours per month at this task.
- Error-Prone – The flexible nature of a SBS is a weakness. Even the most detailed Business Analyst can easily introduce an error into a spreadsheet. It is not uncommon for such errors to go undetected for months.
- Weak Automated Integration – While it is true spreadsheet macros can be used to automate ongoing tasks, they are not geared for enterprise level purposes. Integrating data across multiple operational systems is not a job for macros due to the programming knowledge required and the difficulty of maintaining the code.
- No Data Modeling – Once data from multiple silos is brought together, arranging that data in a logical structure is essential. Without this some analyses would be impossible to perform and for large data sets, the waiting time for answers to be provided would be unacceptable to most users.
Reporting and Analysis Tools
Once integrated data is available, the real value of data can only be unlocked if the reporting and analysis tools can allow decision-makers to see and interact with the data in multiple ways. Here again, a SBS is limited.
- Limited Data Visualization Capabilities – While spreadsheets have a reputation for having many analytical functions, there is a limit to what they can do in terms of portraying the data. For example, dashboards have been gaining in popularity as a way to see information at many levels of granularity in visually compelling formats. Spreadsheets are not designed to do this.
- Difficult to Implement Across the Enterprise – Deploying a SBS across the enterprise is difficult. While spreadsheet information can be shared via e-mail, document management systems, or via cloud-based storage options like DropBox, the complexity of doing this company-wide can be a very complicated undertaking.
- Few Self-Service Options – The trend has been to provide users at all levels with the means for doing their own Reporting and Analytics tasks. With universal, easy-to-use tools at their fingertips, users can access integrated data that is trusted as a “single source of truth”. Stand alone spreadsheets are difficult to use in this way.
Spreadsheets are often considered to be a cheap alternative. It is probable, however, that basing enterprise decision making on a SBS is costing your credit union more money than you think.