The death of the spreadsheet

Spreadsheets are commonplace in the property industry for recording and analyzing asset data but companies should consider using centralized data systems for better efficiency and security.

When recording information about an asset, most asset managers will fire up Microsoft Excel and start tapping figures into a spreadsheet. And, why not? Spreadsheets are ubiquitous, easy to use, small enough to attach to an email that can be pinged back and forth to keep colleagues up-to-date, feature rich and the software is cheap.

Spreadsheets are great, so much so that the developers at Taliance are all huge Microsoft Excel fans, but when it comes to managing the efficient flow of data they make for a flawed solution. Ultimately, this is about making the correct management data available to you and your colleagues at the right time, so that investors consider your company an attractive proposition. Chances are, if you are still using spreadsheets, then you are falling short.

The dangers of building a business that is reliant on spreadsheets to disseminate data fall into two camps: strategic risks and operational risks. While it's true that some of these risks are little more than inconveniences, many can prove catastrophic.

So what's the alternative? Savvy businesses will relegate spreadsheet use to non-critical areas of data collection and analysis and replace them with a centralized data system, like Taliance's FinAsset and Global Fund products, which are both efficient and secure.

Strategic risks

One of the problems with spreadsheets is that they prohibit the free flow of information from just above the asset level to higher levels of management and beyond. While on the face of it, this sounds like nonsense – what could be easier than attaching a spreadsheet to an email and sending it on to colleagues - think for a minute about how that data has been collected, how it will be analyzed and what management and investors aim to gain from it.

It is quite likely that the data journey starts with a property manager collecting basic information about an asset from a variety of sources. That spreadsheet will probably be emailed to colleagues for their input before being sent on to the analyst team for data modeling.
Across the company, other property managers will be doing something similar, perhaps using variations of the same spreadsheet template because they better suit their local needs.

When these spreadsheets reach the analyst team the data will be fed into a more sophisticated consolidation spreadsheet, but the fit won't be perfect so there will probably be some re-keying of information involved. Finally, once the data is massaged into shape it will be analyzed to help the management team makes informed critical business decisions. Some of this information will also be used to positively influence or provide reporting to their bankers and investors too.
The problem is that this process can take weeks or months, so the data is out-of-date before it has even reached the end of its journey. This is disastrous because post-financial crisis, investors and the banking community have demanded accurate, timely reporting before they will even consider supporting or providing continuing support for an investment project.

"The demand for reporting has accelerated dramatically," says Guillaume Fiastre, CEO, Taliance . "Whereas previously companies could get away with publishing yearly accounts, internal and external pressures have forced them to release figures on a quarterly basis. Some retail funds even have to publish financial statements every week."

Investors have also become very picky about the quality of data and its provenance. "Reputation is everything now," says Guillaume. Companies need to post figures that are consistently accurate; data that investors can trust and see being updated regularly from trusted sources. The financial crisis was partly due to a lack of trust in the market. When you don't trust, you don't lend."

Replacing a mass of spreadsheets with a centralized data system such as Taliance's FinAsset and Global Fund overcomes all of these problems. Data is easily fed in from the bottom and its journey upwards and onwards can proceed unhindered with a level of accuracy and timeliness that has been impossible in the past. Reporting time will be cut dramatically - it is likely that some figures will be available instantly.

Operational risks

Data security and data integrity pose the greatest areas of operational risk when a workforce becomes reliant on spreadsheets. Portability is one of Microsoft Excel's great strengths, but it can be a serious weakness too. Spreadsheets are easy for rogue employees to distribute to competitors via email or usb memory sticks. But, a more realistic risk comes from loyal but inattentive colleagues who misplace laptops loaded with sensitive data on the commute home.

Data integrity becomes an issue when figures have to be rekeyed because one spreadsheet cannot be easily imported into another more complex file. Who is to say whether that complexity has impacted accuracy? Probably not the analyst who spent his evenings authoring the original spreadsheet, with a liberal sprinkling of his best-loved but obscure functions, because he left the company six months ago. Anyhow, it has been probably been altered by a number of people since then because it has been doing the rounds via email, so nobody will remember which version the company should be using.

Productivity is greatly enhanced when everyone involved in supplying and analyzing data has access to a centralized data system. All users have access to the same up-to-the-minute information (although privileges can be set to restrict reading and writing of sensitive data), and since a single version resides on the server, there won’t be any confusion about multiple versions of the same document. Backup strategies are simplified, so users won’t need to worry about losing important data in the event of a system failure or a lost or stolen laptop.

Of course, it is an exaggeration to claim that the spreadsheet is dead, but if you care about performance it should be retired in favour of a centralized data system.

Taliance Ltd

Southbridge House | Southbridge Place
Croydon Surrey CR0 4HA
United Kingdom
Phone: +44 (0) 208 240 4499

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