We have an ERP, yet everything still runs through Excel. Are we doing something wrong?
No. It is not unusual, and it is not your people’s fault. Excel almost always appears alongside an ERP for one of three reasons: the ERP cannot do one specific thing the company needs; the data in the ERP is out of date because it is entered late; or working in the ERP is so slow that people have created a quicker route. Excel is not the cause of the problem. It is a workaround that arose because something else did not work.
Why Excel appears
I see this pattern repeatedly in manufacturing companies. No one wakes up one morning and decides to bypass the system. What happens is this:
On Monday morning, a foreman needs to know what should be manufactured. The ERP shows the information, but only as it stood on Friday afternoon because the weekend’s production completions will not be entered until Monday afternoon. So the foreman keeps a spreadsheet alongside it with the current status. Within a month, decisions are being made from that spreadsheet and the ERP is consulted only for invoicing.
Within six months, the planner, foreman, quality team and dispatch each have their own spreadsheet. Every one is different. The company now has four versions of the truth.
How to identify which of the three cases applies
The ERP cannot do something. Ask people what they calculate in the spreadsheet. If it contains a formula or calculation that the ERP does not offer, there is a functional gap. The answer is to add that function, not replace the system.
The data is out of date. Ask how old the ERP data is when a decision is made. If the answer is ‘from yesterday’ or ‘from last week’, the problem is not the system. It is when and how the data gets into it.
Working in the ERP is slow. Measure how many clicks and seconds it takes to enter one routine operation. If it takes more than a minute for something that is done fifty times a day, people will find a shortcut. Always.
Why replacing the ERP usually does not solve this problem
I often encounter requests to replace an ERP, and I almost never recommend doing so. The reason is simple: if data is created late and the process has not been designed, the new system will inherit the same problem. You will spend several million, and two years later there will be new Excel spreadsheets alongside the new ERP.
Replacing an ERP makes sense when the existing system genuinely cannot do something essential to your industry, or when the vendor is ending support. It does not make sense when you are using it differently from the way it was designed.
What to do first
The cheapest first step is to take stock. Who in the company maintains which spreadsheet, what do they calculate in it, where does its data come from and who makes decisions based on it? Almost no company has ever compiled this list, and simply doing so reveals two or three places where the same work is being done twice.
Your next step
If you want to see the whole picture rather than just one spreadsheet, the manufacturing company Digital Business Review maps it. I spend a day on site, examine the operation and systems, and document how information actually flows.
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