Excel v SAP

[carlmack]

A thought occurred to me and I was just wondering if there is anybody here who would like to knock it about ?

I’m a management accountant but currently mainly working as a supply chain consultant. Over the years I have been involved in many ERP implementations. I have also used spreadsheets since Lotus 123 v1 arrived on a single floppy disc.

I have seen companies benefit enormously from ERPs as they removed the drain of coping with fragmented systems and gained from a bank of built in functionality. However, each year the ERPs have grown, adding more functionality that I believe few understand and even fewer actually work out how to switch on.

Some years ago I strated to use big spreadsheets to try out solutions for a while, work out what we really wanted, then go look for a “proper” solution. Looking back, I think the biggest problem with spreadsheets was when you poured in the data, the calc came on, stayed on and stopped you going further.

Now we have more speed I am wondering if the scale is tipping. Maybe the new way forward is to have a very simple, robust and fast transactional system to do only the very basics (record the movements, print invoices etc) and to have Excel (+maybe Access) do the rest ??

If this all sounds far fetched let me tell you what started me thinking more seriously. I have the responsibility for the SD, MM (Sales & Distribution, Materials Management) side of SAP implementation in a distributor which sells tens of thousands of parts. Last year I spent weeks working with a consultant switching on and testing SAP's amazing array of forecasting and MRP (material requirement planning) functions. Unfortunately, just after go-live we hit a problem with automatically suggesting purchase orders. I had to quickly downloaded the data and write a spreadsheet to fill the gap. With a fix in place and in the heat of a go-live the SAP solution took time so I started to refine the spreadsheet to last longer. A few weeks of late nights later, I was learning much more about the real business and changing and adapting the spreadsheet to capture the experience and intelligence of their purchasing managers. After five or six versions even I was suprised at what the spreadsheet could do.

Now we have fixed SAP but I am beginning to realise that the work involved in getting the SAP monster to match the intelligence of the spreadsheet is just too much.

The distributor's purchase ordering process controls his stock and his customer service levels. What can be more important ? We have spent a small fortune and will tip toe out leaving a spreadsheet at the heart of the business !

It feels like whilst the ERPs strife to be all things for all people, Excel can be only, exactly what you want.

Are the ERPs about to meet their match ?

 

[NateO]

No way, and it's not even close.

Spreadsheet <> DB. You need a DB to hold Gigs of normalized information (you wouldn't want to, nor can you, attempt this in Excel), then you turn around and cut select data with your spreadsheet product.

SAP/ERP are the front-end of huge DBs, far too big for even Access to handle.

Think DB as your back-end, Spreadsheet as your front-end. They don't compete with one another, or serve the same purpose, they work together.

 

[carlmack]

Thanks for reply. I totally agree Excel/Access could never cope as a main DB.

My point is a little different. It is not that you can replace your main system with Excel. You will always need “the Gigs” in the basic transactional system.

The question is are the ERPs the best tool for things like Sales Forecasting, Material Requirement Planning, Activity Based Costing, Profit Forecasting, Multi Channel Sales Analysis … The ERPs like SAP all do these(and market themselfs around the new toys) but because they have to cater for everybody, they end up being incredibly complicated. In my experience only the really big companies have the resources to make the sophisticated stuff work. Many others fail or just pretend that it works. On the other hand it is getting easier and cheaper to do these things on the desktop.

It is more about where you draw the front end/back end line. I have spent many years implementing heavier and heavier ERPs and I just beginning to wonder if we need to turn round and go the other way.

 

[NateO]

Hello again,

In my opinion you use your DB to structure and hold your data and Excel to analyze the data with, so taking your list, here's how I'd approach this:

Sales Forecasting - Spreadsheet
Material Requirement Planning - Spreadsheet
Activity Based Costing - DB
Profit Forecasting - Spreadsheet (if your forecast is the result of an analysis)
Multi Channel Sales Analysis - Spreadsheet

The historical data comes from your DB and you upload your new analysis-generated data points into the DB so that you can roll it all up and house it together.

 

[carlmack]

Ok. Basically we agree. The masterfiles and transactions in the DB, all the clever stuff in Excel. These days I would probably try ABC in Excel too.

I take your point about loading the results back. Give the results security, accessibility and keep a single info source.

So, why should I spend a fortune on a bloated ERP full of tools I don’t need ? Should I not buy the most simple DB I can find ?

Carl

 

[NateO]

Hello again Carl,

Well, ABC Cost Accounting is simply a matter of setting up the appropriate table and field definitions and corresponding journal entries, transactions as you say; it's a matter of feeding the DB, just in a different manner than you might otherwise.

In my opinion, yes. Get a SQL Server and you're up and running if you can set it up and maintain it properly. Although, the average user of an ERP needs a simple interface, which is where you get some value out of these ERP systems.

There might be some built-in business intelligence that works for you. But, it's probably pretty generic analytics that aren't easily customized, which is why I would prefer to create them myself in a flexible tool; the spreadsheet.