Outgrowing Excel: For some it's half-baked

By Sandra Gittlen, CFOWorld.com

When Joel Feldman first was brought into bakery goods maker Otis Spunkmeyer three years ago, his charge was to implement a new budgeting tool. Feldman, a former finance manager at Clorox before becoming Spunkmeyer's senior director of financial planning and analysis, chose a cloud-computing software-as-a-service offering to replace the “siloed” Excel-based process.

Currently, 100 people, out of the San Leandro, Calif., company's soon-to-be work force of 2,000 have access to the SaaS tool.  

Feldman recently discussed the reasons for this switch and other technology issues with CFOworld.com's Sandra Gittlen.

What’s the environment like at Otis Spunkmeyer these days?

It’s busy. Right now we’re a half-a-billion-dollar business, but we’ll soon be just under a billion as we’re integrating Pennant Foods, our recent acquisition.

You made the bold decision to move away from Excel for budgeting and planning. Why?

When I got here three and a half years ago, the budgeting and planning process had reached its breaking point in Excel, and needed to be revamped. We had hundreds of Excel-linked spreadsheets so that made going deep into the data for our sales planning difficult. I considered the bigger players like SAP, but we don’t have a large IT group. So I looked at options that wouldn’t take up a lot of their time. It was clear finance would be administering this tool so we chose Host Analytics’ SaaS approach vs. an in-house product.

What were you hoping to accomplish?

We wanted to be able to dig down into the information based on three dimensions: channel/customer; product category/SKU; and direct store delivery operations. We needed to be able to examine details such as how our fundraising and catering were doing; how pastries and bagels were selling; and the intricacies of running our 50 mini-warehouses. We couldn’t do this in Excel.

Also, we needed a reliable data repository. No matter how good someone is at keeping up a spreadsheet, having that information siloed causes problems. We wanted a solution that would allow for broader participation in the process and enable the appropriate people to directly input data.

For instance, we wanted the regional sales managers, who are on the road a lot, to be able to update the company’s [centralized] sales models. That’s hard to do without a Web interface.

What is your budgeting process like?

It’s pretty complex. Annually we set targets for the company and individuals. This is the whole shebang: a full set of financial statements, including a balance sheet and profit-and-loss, with targets for each salesperson. Commissions are fed off this plan. We start there, and then go out to the supply chain, manufacturing and distribution.  It’s an incredibly detailed process.

Was IT involved in selection of the SaaS tool?

They were involved from the start. Together we met with vendors and did demos. We wanted IT to be comfortable with the outcome, and to guide us with more technical issues such as SLAs and security.  They blessed our decision.

Do you think they minded you going with a SaaS? No. They know they have their hands full with other infrastructure. They never had ownership over a budgeting tool so it wasn’t like we were taking something away.

What about integrating it with your core SAP system?

We do take data out of Host Analytics and put it into the SAP ledger/ERP system and vice versa so folks can look at actual vs. plan. This lets users do reporting and analysis where they are most comfortable. We decided not to go with SAP’s planning tool because we didn’t want to sign up for another major implementation. Sure you get the integration, but there were also obvious downsides for us [as compared to the SaaS approach] such as the high complexity and the fact that it’s time consuming.

Are you worried about subscribing to too many one-function services?

That is something we talked about. There are trade-offs outside of the lower cost of implementation. And it’s something we’ll continue to monitor.

This was a case of finance making a technology decision. Do you find that finance is becoming more of a leader in this regard?

There is definitely a tight finance/IT connection. I work with IT, and I can’t believe the technology terms I’m using sometimes. Sure you still have a wide spectrum of knowledge, and some resistance from finance. But there is more involvement overall.

Is that ever bad?

I do think we try to automate too many things. In fact, sometimes it’s to the point where it takes longer to set a task up for automation than to just do it. For instance, we all want beautiful canned reports to do analysis. But we waste more time prepping the system to get the answers. I still see a lot of value in having a financial analyst pull the data, and apply thought to it. 

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