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12/08/2010

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Sandy Richardson

Hi Jeremy:
thank you for your comment and the link. I will certainly take a closer look at your solution!
Regards,Sandy

Sandy Richardson

Hi Charley:
I appreciate your comments – I can see that you are extremely passionate about Excel! I hope that you noted that I was not making a generalized comment about Excel as a tool (there is no doubt that it has powerful capabilities) but, based on my years of experience, I, as you know, believe that Excel just isn’t up to the task when it comes to the BSC and strategy management. I guess that we will just have to “agree to disagree” in this regard!

I do, however, want to respond to a few of the statements you made in your comment:

The indicators selected for inclusion in a company’s BSC indicator set are purely up to the discretion of the company and users using the BSC. This can include cross-organizational internal data and external data – whatever the organization feels will help them manage their strategy optimally. As far as I have seen, these indicators can be easily added to most BSC applications.

Automated and manual data upload can usually be handled easily by most BSC applications. I have, however, found that there is great value in having employees interact with the BSC through manual data input – they appreciate the sense of ownership and accountability and it makes the BSC more meaningful to them. When you select data owners wisely, manual data input into the BSC application does not add significant work effort because these owners tend to handle the data as part of their regular work.

Forecasting and scenario planning are not usually expected capabilities for an organization’s BSC so I am not concerned when BSC applications do not do this – we have other applications to play this role.

I agree that many BSC applications cannot handle complex calculations but this is actually a good thing in my mind. The best BSC indicators are the simple ones because they are often more sensitive and are easy for employees to understand and take action on. The BSC is all about providing us with a sensitive early warning system rather than a robust diagnostic tool so complexity often isn’t required or desirable. If, however, you want to use an indicator that has a complex calculation in your BSC, you can simply run the calculation outside the BSC application and then input the result into the application. Combining complex results over time can be a challenge but most BSC applications have solutions to work with this issue.

I agree that there are some BI applications that are IT and consultant-resource intensive to implement – I am sure that this is the case with some BSC applications as well. However, there are just as many BSC applications where, with little consultant support, business people can create and implement a BSC database quickly and easily. I did this myself for a few of my own employers (one was a national company with 5 geographical regions and multiple application users and one was an international company) in as few as two database building days and I am hardly a skilled technical person! I have also seen my clients have the same experience with a user-friendly BSC application. With most BSC application implementations I have been involved in, ongoing use of the BSC application has been easily absorbed into the existing workloads of employees throughout the organization and has been streamlined when automated data upload has been used (leaving employees to focus and collaborate on the more valuable activities of root cause analysis, results commentary, solution generation, and strategic learning and improvement).

My actual experience is that many BSC changes can be made quickly and easily in many BSC applications. Of course, this is assuming that the required changes have been thought through and planned in advance of actually making the change. In my experience, it is not quite as easy to make similar changes in an application such as Excel.

Finally, don’t discount the value of an exceptional display and user-driven customization in gaining high levels of employee acceptance for an organization’s BSC and strategy – as you mention, this is where most BSC applications have a very big advantage over Excel.

Regards, Sandy

Jeremy

Sandy,

I completely agree! Excel is great because it's easy to use and organize data on. But there will come a day when alignment, refreshing, and multiple users stretch Excel to it's limits.

We have designed our Excel to Balanced Scorecard software transition easier. Readers are invited to try a free 60 day trial at:

https://www.clearpointstrategy.com/promo/index.cfm

And be sure to ask for help with setup - our team uses the scorecarding, dash boarding, performance management, and business intelligence software in hundreds of organizations - so we are ready to get your organization going to!

Thanks again for the great article Sandy.

Charley Kyd

Sandy,

Excel frankly CAN implement the BSC goals you specify. In fact, Excel can do so in ways that dedicated BSC software can't.

Taking my second point first...

...Particularly in difficult economic times, managers need to take off their blinders and pay attention to the environment around them. That is, they need to pay attention to external data from sources like the Federal Reserve Board, the Bureau of Labor Statistics, stock markets, and so on.

This is data that few BSC systems contain. But it's data that Excel users can download and display quickly and easily.

Similarly, managers often need to pay attention to data generated by internal data silos. Again, this is easy to do with Excel, but not with BSC software.

From a different perspective, measures of performance often require sophisticated calculations that most BSC software can't support. But Excel can.

Also, BSC software isn't known for its ability to assist with budgets, forecasts, assumptions, and other types of user-generated data. But Excel is.

Now, as to your points...

Costs...

I suggest you try to express your "Realty" paragraph about costs as a discounted cash flow analysis. Be sure to include the cost of consultants, new-hires, and training, along with the software costs. The ONLY way you could show a positive NPV for BSC software -- other than by imputing a difficult-to-justify cash benefit from BSC software -- is to assume that most or all Excel users will be laid off and that the number of Office licenses will plummet. And that ain't gonna happen!


Changes...

..."The fact is that all excel BSC databases..." Wrong. The fact is that no Excel BSC database is the same. So you're already heading in the wrong direction when you begin any sentence by assuming uniformity.

...You describe the changes that BSC software requires; you declare that Excel must work the same; then you conclude that because Excel has the same limitations as BSC, Excel is a bad solution.

...The fact is that good Excel implementations can support most changes in just a few minutes, which typically isn't true of BSC software.


Excel Programmers...

...Many implementations don't use Excel programmers at all. Instead, they're supported by Excel users...the Subject-Matter Experts themselves. That's a far better strategy than relying on IT people of any kind as an intermediary.

..."excel cannot display data dynamically..." Not true. In large installations, Excel formulas might need to link to Excel-friendly OLAP databases. But those are solutions that ENHANCE Excel; they don't try (and fail) to replace it.


Finally, you did overlook what is typically a weakness of Excel: its display technology. Typical Excel systems aren't designed as dashboards. This is one of the reasons I created templates like these:

http://exceluser.com/dash/samples08.htm
http://exceluser.com/dash/xbw2.htm

There's definitely a place for BSC, BI, BPM, and other such software. But the market is larger when the software works to enhance Excel, not replace it.

Regards,

Charley Kyd
Microsoft Excel MVP
www.ExcelUser.com

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