What is ERP?
Before talking about an ERP spreadsheet, let us understand what is an ERP. The concept of ERP, which stands for Enterprise Resource Planning, according to Wikipedia: […] category of business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many business activities […]
A “suite of integrated applications” does not necessarily refer to the development of an all-encompassing software package. Instead, it refers to applications that collect and store operational data. And the possibility of the integration of that data. So that this data can be interpreted by managers and used for decision making. Some of the better known ERPs are Microsoft Dynamics, SAP, Sage, Oracle ERP, Totvs, Infor, Kronos, Lawson ERP, etc.
What about an ERP spreadsheet?
When we speak about spreadsheets most people think of them as a limited and risky platform for business use. They assume that anything at any time can go wrong. This view probably comes from bad experiences with spreadsheets: older versions, old data, incorrect manual inputs, broken links, etc.
It’s possible to resolve a large portion of these problems because it increases the useful life of spreadsheets (e.g., spreadsheets which previously were used just to perform an analysis or generate a report at the moment can now become updated and useful at all times). Also, It reduces the necessity to insert data (e.g., when someone needs information from your spreadsheet they don’t have to request it from anyone, the data will come automatically).
Integration of spreadsheets makes it possible for any employee to develop spreadsheets that meet the first level need for collection, storage, and analysis of operational data. Bring this data automatically to a second level so that managers can monitor the information. And finally, bring managerial spreadsheets to a third level to create dashboards and indicators. This can consequently be used by executives for decision making based on accurate, updated data.
In theory, this could work, but in practice?
It’s easy to theorize about the possibilities without ever experimenting with the challenge of developing an ERP spreadsheet. However, a Brazilian real estate developer has already done this. The system, which was developed internally, helped to drive it’s 30% annual growth. This is the case of Abramar Inc. This medium-sized company of 30 employees, led by the CEO of Sheetgo (from 2009-2015), built an ERP spreadsheet 100% based on Google Sheets.
It met all of the company’s needs: Operations (quality, scheduling, KPIs), Commercial (leads and market management, contracts, client registering, KPIs), Finance (accounts payable and receivable, cash flow, KPIs), HR (employee database, performance reviews, incentive programs, salary payments, KPIs) and finally, the executive team. Managerial information for each department was combined in a dashboard for quick strategic decision-making.
Can this be applied to all companies?
It depends. For small companies, a customizable ERP spreadsheet makes perfect sense. However, for medium to large companies, the likely answer is ‘no’. This because of the volume of data and the need to integrate pre-existing, automated processes.
However, just like for small companies it makes a lot of sense for medium to large companies to use spreadsheets. Spreadsheets are used to create systems for specific processes. The cost and speed of implementation are much less compared to adopting off-the-shelf software to perform these functions.
Recently, Abramar needed to migrate its financial management software to another platform. This was necessary because of the volume of data and requirements of the department. The data was beyond what could be processed in spreadsheets. This was an expected step for the company to meet its growth. However, all other departments still run completely on integrated spreadsheets until today.