IT Architects and Excel Don’t Mix. (Or Do They?)
As Software IT Architects, we used to promote a belief that Excel is evil and that spreadsheets should be banished from the face of enterprise software applications (which, after all, is our world) and certainly never be a business calculation solution.
Any IT Architect who embraced Excel would be “ex-communicated” and “shunned” by their peers.
It had somehow become a raison d’être, a divine goal of the IT Architecture community to eliminate spreadsheets from within the organisation; converting them to database-driven applications where possible.
Eliminating Spreadsheets Totally May Not be Possible
More than 15 years ago however, we had encountered a unique situation whereby converting a spreadsheet into a database application was not going to be easy.
There was one particular spreadsheet. An Excel-based, transport rate calculator doing seriously complex business calculations that had a lot of clever IT folk stumped.
The spreadsheet was actively being used by the company because it worked!
They were able to produce accurate car transport quotes for their business and with annual revenues exceeding $20 million.
But it’s a SPREADSHEET!
A few of our peers proposed to redevelop the spreadsheet. Turning it into a complete ERP system by encapsulating the spreadsheet’s rules.
The spreadsheet was unravelled. Rate calculations decoded and rules formulated in ways that would better fit a relational database model. From this the new system would be built.
When all the costings and calculations were done. They placed a multi-million dollar price tag on it. Just for delivering this final business calculation solution.
Interestingly, even with the enormous price tag, some continued to consider the project worthwhile.
In the end the project did not proceed for 3 main reasons:
- The proposed cost (after factoring risk) was going to be more than 25% of annual revenues;
- The same execution of rating logic to the business could not be guaranteed;
- The IT department would need to be intimately involved in pricing decisions to ensure the new system could accommodate changes in pricing models.
Also, IT licensing and operational costs would go from hundreds of dollars per year, to hundreds-of-thousands of dollars!
Disrupting a $5M ERP Project with an Excel Spreadsheet
Businesses often find themselves disrupted by the introduction of new technology. On this occasion, instead of proceeding with the redevelopment of the spreadsheet into software, the company chose to continue with it’s use.
And, in the process it, unknowingly, also chose to become a Disruptor.
Eight years later, in 2013, more evolved and more mature as a consequence of our own experience. We had begun to recognise that Excel provides a real and unique value proposition to businesses in the space of business calculation solutions.
The Same Excel Challenge Viewed With a Different Set of Eyes
As a result, we revisited that same spreadsheet with a different set of eyes. This led to asking a completely different set of questions…
- What if, instead of replacing the spreadsheet, we found a way to make the spreadsheet enterprise-grade?
- Would it be possible to apply a growth hack and SaaS mindset and actually adopt the spreadsheet as the Source System of Record (SSoR) for rate calculation information and run it in a secure and infinitely scalable way?
- And if we succeeded at doing this, could we be seeing a future of spreadsheet-driven lead generation and conversion rate optimisation?
At the time, our Client was using the spreadsheet to create approximately 30 quotes per day. Each quote involved a series of manual steps and would take each operator 7-8 minutes to complete.
The first iteration we developed and built in Calc123 delivered our Clients first business calculation solution. It ran that same complex spreadsheet and made it securely available to a private community of our Client’s customers.
Fast-forward 3 years later (to 2016) and our Client has been able to leverage Calc123 and expand their business. With a capacity of more than 50,000 quote calculations per month and an average calculation time of less than 200 milliseconds.
That’s what an IT Architect is capable of when they use their intellectual might to overcome their prejudices!