Host Analytics has introduced AirliftXL, a new feature of its cloud-based financial performance management (FPM) suite that enables its software to translate users’ spreadsheets into the Host Analytics format. I find it significant in three respects. First, it can substantially reduce the time and resources it takes for a company to go live in adopting the Host Analytics suite, lowering the cost of implementation and accelerating time to value. Second, it enables Host Analytics users who have the appropriate permissions to create and modify models and templates that they use in planning, budgeting, consolidation and reporting. This can enhance the value of the system by making it easier to maintain. Third, it can make it far easier to routinely collect and connect planning and analytical models used by all departments and business users as it has outlined in its planning cloud offering. Although it has limitations in its initial release, AirliftXL gives corporations a workable alternative to stand-alone spreadsheets and has the potential to substantially increase productivity and effectiveness of an organization in the full range of budgeting, planning, consolidation and reporting functions.
AirliftXL addresses a fundamental issue that diminishes the productivity
AirliftXL enables ordinary users to create spreadsheet models and reports in Microsoft Excel and then quickly convert these to the Host Analytics enterprise system. Those that “own” a model, analysis, report or process can control these in Host Analytics. This speeds the process of setting up Host Analytics because there’s no need for someone to “translate” the company’s current set of spreadsheet models, analyses and reports. This cuts the time (and therefore the cost) of setting up the new system.
It also means that whenever changes need to be made, those responsible can make the changes themselves. Allocations and analytical models used in planning and consolidations can become part of a company’s system almost immediately. These alterations can be effected by “exporting” the Host Analytics object to a spreadsheet, modifying it and uploading back to the system. As well, users can create new models, analytics and reports in Excel and import them into the Host Analytics system. There’s no need for resident expertise or consulting time to make such changes. AirliftXL provides an organization with the best of both worlds: first, the up-front productivity that comes from enabling the author, a subject-matter expert, to quickly translate his or her ideas into a spreadsheet and, second, the ongoing productivity that is achieved when the plan, analytic model or report is kept in a centralized, easily accessible and controlled environment. These same authors can update and expand their analytical models or reports. Host Analytics can render models back into an Excel spreadsheet and the owner – not a consultant or trained IT person – can make the necessary changes and then upload them back into the system. This is an important capability because change is a constant in businesses and these changes must be reflected in financial performance management systems.
Organizations have hundreds, sometimes thousands, of spreadsheets circulating that support a multitude of processes and users in every department and business unit. AirliftXL can help incorporate them into a controlled enterprise software environment. Information that today is kept in one part of an organization can be viewed and used by others. Budgets and integrated business plans can quickly incorporate the most up-to-date information. Complex models now held in spreadsheets can be more controllable, consistent and safely accessible to a wider group of users. Creating links across individual spreadsheets (say, sales forecasts prepared by the sales organization and a company income statement forecast prepared by Finance) is straightforward, although linking to external data sources (say from a spreadsheet to a relational data store) is a little trickier. As well, Excel’s built-in financial, statistical and logical functions are all maintained in Host Analytics.
AirliftXL has the potential to be an important differentiator for the company. IBM Cognos has had something like this in Cognos Insight but from my analysis it is not as easy to use as the Host Analytics feature. Some corporations have finance IT professionals with deep subject-matter expertise as well as IT systems skills, but even their presence does not address the root cause of the misuse of spreadsheets. Most people who understand the needs of the business lack the IT skills necessary to use their company’s systems. They default to using spreadsheets because it is more expedient than trying to transfer their knowledge to someone who understands IT systems.
While AirliftXL is an important first step in taming the spreadsheet problem, it has limitations. For one, it’s not possible at this point to create a dynamic model such as an integrated income statement, balance sheet and statement of cash flows. This is a snap in a two-dimensional spreadsheet grid but much harder when working with a relational or multidimensional database. Moreover, there’s no guarantee that the spreadsheets imported into Host Analytics will be free of formulaic errors or even if it is well constructed. Thus, companies will need to put quality control processes in place, especially if a spreadsheet can have a material impact on the accuracy of financial statements or could defeat controls for fraud. It also would be handy if some vendor would create a product that could automate the digestion of masses of spreadsheets floating around companies as described in this patent for extracting semantics from data.
Despite these reservations Host Analytics’ AirliftXL provides an
Regards,
Robert Kugel – SVP Research