The Hidden Costs of Spreadsheets
June 07, 2018
According to a survey of over 100 medium to large manufacturers, 92% of companies use complex pricing structures and 100% of them manage pricing fully or partially in spreadsheets. This is just one example of manufacturers’ continued reliance on spreadsheets. It makes sense. They are easy to use, everyone knows how to use them, and they are cheap. However, relying on spreadsheets for complex reporting is more expensive than you think.
Missed opportunities from reacting too late
In the same survey, 95% of companies admitted that they do not have access to a current consolidated exposure and coverage report and spend at least two days, and up to several weeks, creating one. Why is this a problem? In the time it takes to create current reports on position of contracts, the market shifts, and you can miss opportunities of possible new favorable market conditions.
For example, if a company requires to procure and manage $200 million of sugar contracts, and each is worth an average of $2 million, missing out on an opportunity to capture better pricing of even one deal per year can seriously impact the bottom line. This lack of real-time insight increases spend dramatically based on time lost on creating reports and the inability to strategically secure deals that could impact profits.
Poor contract execution and trade options management
Financial executives and traders that rely on spreadsheets to manage positions and risks must contend with spreadsheet error, a known problem with combining multiple spreadsheets manually. Not only is the data inaccurate, but the time spent manually correcting for errors results in outdated insights. Error-prone and outdated data result in unreliable insights and lost opportunities executing options.
If a trader holds a book of $300 million and misses just 1% of opportunities due to spreadsheet errors or inaccurate data, they can miss $3 million of market driven opportunities. These are opportunities that are missed solely because traders did not have the right information at the right time to execute the right trades.
Time lost to data aggregation and cleansing
Manually aggregating and analyzing data is extremely time consuming. Data must be cleansed, checked and rechecked to ensure all relevant data has been collected, and any errors have been resolved, before you can begin analyzing it. Moving off spreadsheets allows this process to become accurate, actionable and efficient. For example, Renewable Energy Group (REG) implemented Eka’s solutions to improve reporting efficiency. Using Eka, REG reduced reporting time from a four-day, manual reconciliation process into a 30 second task.
Imagine a four-day report that is generated once a quarter. Creating that report consumes 16 days every year. This totals more than three full work weeks spent on manual report creation. Using an automated system like Eka’s, reports are generated quickly with minimal manual effort, enabling people to spend those 16 days on advantageous and impactful activities. You can devote those days to developing value-add analysis insights, evaluating new market opportunities, and seeking efficiency in costs and positions.
If you are struggling with the time and effort spent on manual reporting talk to us. We have the solutions you need to eliminate all that manual effort and create valuable insight in seconds. Don’t just take our word for it, watch this customer testimonial to learn more.