The old adage, "If you can't beat them, join them," apparently also holds true for Microsoft Excel, as software developers of all varieties are implementing features that make their products look more like the universally used spreadsheet program.Coupled with the increasing ability to integrate with Excel and other Microsoft Office products such as Word, adoption of the familiar worksheet interface is designed to make learning other, related applications easier.
"There is acceptance of anything that looks like Excel or works with Excel," said Jo Ann Cummings, product manager for CCH's ProSystem fx Tax.
Since its debut in 1987 (Excel 2.0 for Windows), the spreadsheet program has grown into one of the world's most widely used software packages. According to a Microsoft spokesperson, there are about 400 million customers worldwide using Microsoft Office, which includes the spreadsheet application as one of its components.
The problem is that accountants try to get spreadsheets to do everything, and they don't do everything well. Despite its short learning curve, Excel has its limitations.
Spreadsheets may provide flexible-modeling capabilities for transforming data, but can lack the formalized processes, centralized data and collaborative aspects of enterprise business intelligence or business performance management applications, according to Adaptive Planning, a budgeting software company based in Mountain View, Calif., whose product line includes budgeting and forecasting software. Consequently, they can be time-consuming and error-prone, and result in multiple, incompatible "versions of the truth" throughout a company.
One challenge with Excel is that it becomes increasingly complex as a business grows and more people become involved in the process, says William Soward, president and chief executive officer of Adaptive Planning.
"All of a sudden, you have something that ends up having hundreds or thousands of spreadsheets, and it becomes risky and difficult to run a business on spreadsheets," said Soward. "It takes a tremendous amount of staff work."
Echoing that sentiment, Chris Reich, director of product management for CRM solutions at Sage Software, said, "It does get to a point where you are building complex spreadsheets. Tracking that data can be tedious. [Excel] is great to manage numbers, but once you get across departments, managing that gets to be impossible."
To overcome those problems, many software publishers have set out on a road to develop systems that increasingly integrate with - and resemble - the powerhouse spreadsheet.
For example, Adaptive took the "best of Excel" approach in developing its application, so that users can spend more time analyzing their business and less time manipulating spreadsheets. There are currently more than 50 companies using Adaptive Planning software, most of which are midsized businesses.
What was once a hosted budgeting, planning, forecasting and reporting solution is now also widely available as an on-site deployment option with Adaptive Planning 3.0.
"In some cases, companies may feel that they would rather put [their financials] behind their own firewall and manage that data themselves," chief executive Soward said of the software, which has the ability to import and export data to and from Excel. "I think you are seeing more software companies adopt this hybrid model."
Adaptive Planning 3.0, coming to market this half, includes enhanced interactive modeling so that end users can access, create, analyze and share information throughout the company; new dashboards for a graphical, at-a-glance view of key business metrics; enhanced budgeting and forecasting with annotations, workflow and wizard-driven interfaces; and enhanced reporting and analysis to compare actual, budget and forecast results across dimensions such as customer, product and region.
"The key thing about this is the ability to interact with, and not just access, the data," added Soward.
Working the worksheet
CCH has likewise recognized that Excel is a common denominator in the industry, and is giving its software suite, known as ProSystem fx Office, a family resemblance to the Microsoft product.
The 2004 introduction of its Worksheet View interface for ProSystem fx Tax enabled users to input data directly into worksheets and consolidate the information necessary to complete a tax form in one location. The company also added the ability to import and export worksheet summary grids to and from Excel spreadsheets. CCH's Cummings said that the new import/export capability was developed in response to how customers work.
According to CCH, more than 1,700 new clients have signed up for the product since its introduction two years ago. CCH estimates that about 25 percent of firms use the worksheet view exclusively, while another 25 percent to 30 percent have adopted it with at least some staff members.
Another product in the suite, ProSystem fx Planning, can import data directly from ProSystem fx Tax via the spreadsheet-style interface. The company's ProSystem fx Engagement also centers around the familiar Excel look to give users of the trial balance system a shorter learning curve.
Among its features is one that allows users to roll forward every engagement workpaper and report, automatically populating all Word and Excel financial statements and workpapers with current dates, account balances and variances. The company says that this approach will eventually spread to other CCH products.
Sage Software's product enhancements for 2007 also include tighter integration with Excel. The new Peachtree by Sage 2007 features more robust options for exporting data, enabling small businesses to export Peachtree report layouts into Excel. This includes both the formulas for calculated values and the report formatting, as well as the option to retain viewing capabilities such as freeze pane, auto-filtering and report headers.
An additional customer-requested feature is a Comparative Budget Spreadsheet Creator. With this enhancement, budgets tie directly to transactions in Peachtree, allowing small businesses to compare past, present and future budget scenarios. The budget-creation screens mimic Excel spreadsheets, eliminating the need to re-key budget data from one application into another. Budgets can also be created by using historical financials from within Peachtree, or can be imported from an Excel spreadsheet.
"The integration we have allows customers to export report data from Excel, and allows them to manipulate data further," said Peachtree product manager Lisa Frank. "We understand small business owners are familiar with Excel."
When it comes to Sage's SalesLogix CRM application, Reich said that many people work with SalesLogix by creating groups or lists, which can then be exported to Excel.
The benefit of this, Reich explained, is not only to have the data in a familiar format, but it can then be used to create pivot tables so that users can graph forecasts and perform other manipulations more precisely. For example, a user could have a group of clients in Nevada and California, and export that group or list to Excel to create a graph to see the sales pipeline.
"One of the things we see is that people are comfortable with Excel, so that is the tool they use," said Reich. "With Excel, where you have numbers and sales data, we are always looking to integrate as closely with Excel as possible."
For 2007, SalesLogix will introduce a new analysis or CRM intelligence tool to further manipulate data that will include an optional Excel interface.
ATX/Kleinrock, which markets tax preparation and research products to midsized CPA firms and other tax professionals, and was recently purchased by Wolters Kluwer, the parent of CCH, has much of its ancestry in Excel.
These roots go back to 1997, when it purchased an Excel-like engine, notes Michael Knighton, ATX's vice president of enterprise services. That engine was modified to provide the display, print and calculation engine for the company's tax compliance software, with most forms coded in Excel.
Today, the company's flagship product is known as Max. Max offers, aside from calculating worksheets, all individual federal forms (1040, 1040A, 1040EZ, 1040NR and 1040X); all business and specialty forms (including 1041, 1120, 1120S, 1065, 990, 5500, payroll tax, W-2/1099, 940/941, sales and use, foreign, estate and gift, and more); all state forms with all related localities; and all supporting schedules (including Schedules A and C).
"The bottom line is that our product has roots in spreadsheet technology, but we have created an end-to-end tax product that allows you to create returns and leverage calculations like a spreadsheet, but it does more," said Knighton.
Added Ken Crutchfield, vice president of marketing for ATX, which has about 50,000 users, "When you are working with [tax professionals], they think in terms of spreadsheets. That is how they are trained to think, and that is why you leverage spreadsheets. It comes down to ease of use."
Meanwhile, in August ValuSource Software, a provider of valuation software, shipped ValuSource Pro 4.0, which is built entirely around Microsoft Office. Built in direct response to feedback from those in business valuation, VSP 4.0 works in 100 percent native Excel.
"This allows users to get the best of both worlds - a full-fledged stand-alone valuation application, and the flexibility to edit and customize in Excel and Word," said company president David Fein.
Fein considers Microsoft Office to be an "incredible tool," but said that the challenge in business valuation is that there are a great number of spreadsheets, as well as Word documents. "As soon as it gets complex, it is hard to manage," Fein explained.
Among the new VSP 4.0 features is a more intuitive interface designed to simplify navigation through the more than 230 schedules that make up a typical valuation workbook. The new "one-touch" navigator allows users to quickly find the schedules they need. And assumptions for a given valuation methodology are now located on a single worksheet, and grouped logically.
On a side note, Fein suggested that CPA firms take greater advantage of the tools that Microsoft Office has to offer. If no one inside the organization has a deep understanding of Office programs, firms should consider sending two or three people to a class.
"[Professionals] use as much of the tools as [they] need to get the job done today," said Fein. "It is just not part of the background and training, but [they] tend to focus on just enough to get the tasks done at hand."
Buying a familiar look
Companies that make reporting and analytical tools have been spending their way into the Excel-compatible market.
Within the last two years, three companies in this field have made purchases that brought them into the market with products that have the Excel look, and two of them used names that evoke the popular Microsoft application.
Last year, SAP acquired XL Reporter with the purchase of iLytix Systems; Business Objects picked up Infommersion, and turned its product into Crystal Xcelsius; and Global Software got an Excel boost with the acquisition of Seattle-based Timeline. As two of the names imply, the ability to work with Excel is part of the products' marketing appeal.
The official description of Xcelsius is that it lets users create presentations and visual models from Excel that can then be integrated into a variety of formats, including PowerPoint, Word and PDF, or published over the Web via SharePoint Portal Server 2003 and the Web.
Similarly, SAP said that XL Reporter offers an Excel-based budgeting environment that can integrate directly with Microsoft's four Dynamics financial products. And it has also been incorporated into SAP's own Business One. As the product description phrases it, use of XL Reporter can "avoid the error-prone and manual process of regular Excel spreadsheets."
Global Software, which already had Excel-based budgeting applications, didn't adopt a name evoking Excel with the Timeline purchase. But the Raleigh, N.C.-based company noted that the Timeline Analyst line automatically recognizes changes in ledgers and applies them to reports in Excel, so that information doesn't need to be re-keyed, reformatted or rewritten.
Antoinette Alexander is a contributing editor to Accounting Technology magazine.
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