Managing Spreadmarts through SAP EPM
Thanks to Chris Pauxtis, who introduced me to this term, I thought this is worth a blog for all our BPXers. Another new (realized it is not new, existed from 2002, I got to know this now) term in the software world, but definitely a meaningful one.
What are spreadmarts?
As defined by wikipedia, a spreadmart is a concept describing the tendency that spreadsheets go havoc in organizations. Typically spreadmarts is created by individuals at different times using different data sources and rules for defining metrics in an organization, creating a fractured view of the enterprise. The concept was coined in 2002 by Wayne Eckerson at The Data Warehousing Institute (TDWI) in his article Taming Spreadsheet Jockeys. A more detailed definition is ‘A spreadmart is a reporting or analysis or planning system running on a desktop database that is created and maintained by an individual or group that performs all the tasks normally done by a data mart or data warehouse, such as extracting, transforming, and formatting data as well as defining metrics, submitting queries, building planning models, coordinating planning process and formatting and publishing reports to others. Spreadmarts are data shadow systems in which individuals collect and massage data on an ongoing basis to support their information requirements or those of their immediate workgroup. These shadow systems, which are usually built on spreadsheets, exist outside of approved, IT-managed corporate data repositories, such as data warehouses, data marts, or ERP systems, and contain data and logic that often conflict with corporate data. Once created, these systems spread throughout an organization like pernicious vines, strangling any chance for information consistency and reliability. You’ll find them in all industries, supporting all business functions. According to TDWI, over 90% of organizations have spreadmarts
Perils of Spreadmarts
Inconsistencies – The users create different views with different assumptions, data, calculations and naming conventions. This results in complete inconsistencies in planning, forecasting, reporting and analysis. This make it difficult to create an enterprise wide view, with each group having its own version of customers, products, sales, profits, and so on Time consuming – managing spreadmarts is time consuming, since each user group gets data and does a whole bunch of tasks to apply their own thing before getting into the results they need. Instead of analyzing data (their main job), they spend more time as a mini information system professional, managing all the data.
Risk of faulty decisions – Due to working in silos and lack of effective tools that work across a trade off between flexibility and control, often there is the risk of taking faulty decision based on faulty data. This is due to the fact that the main stream systems are very complex for the business users to understand and they use their own logic to derive results out of their own models in a spreadsheet. When they do such things there is no audit trails to track the traceability of change in data.
Can an organization argue that they can get away completely from a spreadmart. Why organizations (especially business) always think spreadmarts is necessary
Lack of alternative – this could be primarily because of lack of alternative for users to do all of their tasks from a data mart. For example, if a sales strategy person wants to plan for a forecast, he may want to consider the competitors/market data as a factor for forecasting revenue. This does not exist in the data mart, and he definitely needs a combination of the information coming from his transaction system + some external unstructured data to fulfill his needs.
Quick and easy – another important element spreadmarts solves in the ability for the business users to model what they want very quickly and easily using spreadsheets. It is better than having to wait for IT to build a comprehensive system over several weeks or months, and most importantly does the job on hand for them Right tools to manage spreadmarts The right set of tools to solve spreadmarts would be is to manage and store data and logic centrally in a uniform, consistent fashion and then let business users access this data using their tools of choice e.g. Microsoft Excel or easy to use web application. The goal is to transform spreadmarts into managed spreadsheets or application. This lets IT do what it does best—collect, integrate, and validate data and rules—and lets business do what they do best—analyze data, identify trends, create plans, and recommend decisions. Per TDWI, today, the best integration occurs between Excel and OLAP databases, where users get all the benefits of Excel without compromising data integrity or consistency, since data and logic are stored centrally.
SAP EPM solutions are the best in class tools to solve and manage spreadmarts. With SAP Business Planning and Consolidation, you get a tool that has the familiar Excel interface with the data coming from OLAP databases (MSAS or BW). In addition it is easy for the users to bring the unstructured data also into the equation for them to perform some of the tasks that cannot be done through just the data coming from their transaction systems. With features such as audit trail in built, it allows IT to trace the changes made into the system and it is a marriage of flexibility and control together. Check out other blogs posted that helps understand how managing spreadmarts is made easy. How How are EPM solutions better than spreadsheets?, Empowering the business user to implement business change with CPM and Finance Owned and Managed SAP CPM – Part V.
Another example of such a solution is SAP Spend Analytics, which addresses the pain points of managing spreadmarts, allowing buyers/purchasing department to build their own reports and analysis instead of having to rely on IT. This ensures consistency of data on the one hand and the flexibility on the other hand, check out the SAP EPM extends solutions for Office of Chief Purchase Officerson this. Other SAP solutions in the EPM space such as SAP Strategy Management, SAP Profit and Cost Management etc are all focused towards business users, and allows great amount of flexibility with control – and solves different use cases for different business user base – and with a common theme that allows managing of spreadmarts in a better way. With acquisition of Business Objects, SAP is going towards a more broader approach to solve the problem of managing spreadmarts, with different tools such as Xcelsius or Voyager, for different needs.
Beyond the tools, things required to manage spreadmarts
Change management – having tools alone does not change habits, processes, perceptions of people. Changing a spreadmart-dependent culture usually requires top executives to both communicate the importance of having unified, consistent, enterprise data, and to apply incentives and penalties to drive the right behaviors. Ultimately, change takes time, sometimes a generation or two, but the right organizational levers can speed up the process.
Business and IT collaboration – Another dynamic driving spreadmarts is the lack of communication and trust between business and IT. The business doesn’t adhere to the architectural standards and processes designed to support its long-term interests, while IT doesn’t move fast enough to meet business needs. To reverse this dynamic, both business and IT must recognize each other’s strengths and weaknesses and learn to work together for the common good. IT must learn to develop agile information systems that adapt quickly to changing business conditions and requirements. The business must recognize the importance of building sustainable, scalable solutions. IT must learn about the business and speak its language, while the business must not blame IT for failures when it continually underfunds, overrides, and hamstrings IT so that it cannot possibly serve business needs
Many of the information above are based on the article published by TDWI for spreadmarts with modifications to meet the needs of SAP BPXers to highlight how the SAP EPM solutions allows managing spreadmarts.
Spreadmarts cannot be eliminated, Business users use them and are familiar with them – and will continue to do that for years to come. Advice to IT – choose a solution (e.g. SAP EPM) that balances business and IT priorities and yields greatest business value