White Paper: Outgrowing Spreadsheets: Why Business Modelers are Moving to Quantrix
Introduction
For decades businesses have relied on spreadsheets to complete all their modeling needs. While spreadsheets can be suitable for some use cases, they have a variety of limitations. These limitations can make it difficult to expand, scale and audit models. When business modelers and planners face these types of challenges in their work, they are forced to either create a workaround or search for an alternative solution. Workarounds can be time-consuming, error-prone and unmaintainable. Not surprisingly, many users end up researching other options. This paper describes why modelers and planners might outgrow spreadsheets, and why they are consistently moving to Quantrix, a multi-dimensional business modeling platform.
The Limitations of Spreadsheets in Business Modeling
According to an article in Forbes that reviewed multiple studies, “nearly 9 out of 10 spreadsheets (88%) contain errors. A majority of these errors were from human error (and could have been avoided).”* This statistic indicates a couple important things. One, many business models may be relying on incorrect data – and two, spreadsheets are not offering the features and safeguards necessary to prevent errors.
How are Spreadsheets limiting their users?
Scalability
There are a variety of reasons that a business model may need to expand. For example, a sales model may need to add a new region, or a forecast model may need to add a new year. These types of changes can cause problems for spreadsheet users. When users copy and paste formulas and structure, there’s a chance that new errors can be introduced into the model. This process can also be time-consuming, taking people away from other vital business tasks.
Model Size and Calculation Time
As a model grows, so do the number of calculations. Excessive calculations and complex formulas can bring a model to a crawl. In fact, it’s not unheard of for spreadsheet users to wait minutes, hours or, in extreme cases, days for their calculations to complete. When these types of delays occur, there can be costly consequences, including lost productivity and stalled decision-making.
Formulas and Structure
Even the most advanced modelers and planners can run into spreadsheet limitations. One of the most obvious limitations is the two-dimensional nature of the platform. Unlike multidimensional tools where the formulas are separated from the overall structure, spreadsheet formulas are written and stored right in the cells. Not only does this make it more difficult to trace calculations, it also can make the formulas incomprehensible. The cell coordinates (ex. B53, D28) used in many spreadsheet formulas can add to this confusion.
Auditability and Control
Sharing business models is a crucial part of every organization. Key stakeholders must be able to review data and conduct analyses. Although this is such a common practice, the process is not without issues. Sending models via email or distributing models to a shared space online can result in accidental changes to formulas, structure and even accuracy. Without a single source of truth, decisions can be made relying on incorrect or outdated information.
Quantrix Overview
Traditional spreadsheets are known for their agility. Enterprise planning tools are known for their scalability. Quantrix is known for both. Furthermore, Quantrix is designed to be maintainable, even as the models become more complex. With Quantrix, users are able to build a structure that matches their business and easily scale it over time.
There are a variety of features that allow Quantrix to be agile, scalable, and maintainable. This paper will cover the following topics:
Natural Language Formulas
Quantrix utilizes natural language formulas. These types of formulas can calculate entire rows and columns and are separated from the structure. This results in fewer total formulas needed in a model, faster calculation times, and easier auditing.
It’s much simpler to understand Gross Profit = Revenue – COGS than it is to understand = B27 – C29.
These types of formulas allow the models to grow over time. For example, when a new year is added to a model, the Gross Profit formula (shown above) will continue to work.
Resolve Formula Issues Quickly
Quantrix has a feature called the Problems Pane, which helps users identify and locate possible formula issues. For example, a formula may reference an element that doesn’t exist in the model, or a formula may contain a circular reference. The Problems Pane will provide a description of all the errors and warnings and guide the user directly to their sources. From there, users can easily make corrections. This type of safeguard helps to remove human error and keeps a model calculating accurately.
Dependency Inspector
The Dependency Inspector allows users the ability to visually trace a calculation from beginning to end. By following the dependencies between calculated cells, users can see how a calculation flows throughout a model. This feature in Modeler is perfect for troubleshooting formulas.
Scale Models Easily
Once the structure and formulas are set, expanding a Quantrix model becomes incredibly straightforward. For instance, if a user wants to add a new year to their forecast, they can select the latest year in the model and simply hit Enter. Not only will a new year be added to the model, but the formulas will also continue to work.
Permissions and Roles
As organizations grow it can become markedly more difficult for them to manage their spreadsheets. In many instances, these types of difficulties can be traced back to human error. The larger the organization, the more people who need to view, edit and analyze the information. Although human error cannot always be prevented, having the right safeguards can dramatically reduce the chances that they occur.
Model Accessibility
With Quantrix, the model owners are able to create roles and set permissions. This means, for example, that a global sales director would be able to see more detail in a model than a regional account manager. Additionally, the roles can prevent people from editing cells and formulas. In fact, if the model is shared online using Quantrix Qloud, the formulas will not be visible. When these roles and permissions are working together, end users will only have access to what they need.
Track Every Change with the Audit Trail
Business models are constantly changing and rarely considered a static document. Although many models are created by an individual or small team, they are frequently altered and updated by others. This can lead to confusion about who made an update and when.
What is the Quantrix Audit Trail?
Quantrix has a feature called the Audit Trail which records the changes made to data and structure. When this feature is turned on, the model owner will be able to see a running log of the operations that were performed, the user who performed them, and the time they were performed. This type of insight helps to ensure accuracy in the model. The Audit Trail will also keep track of these records when changes are made online with Quantrix Qloud.
Adding Widgets
Quantrix makes it easy to add widgets to any dashboard. For example, users can add sliders, radio buttons, gauges, toggle switches, drop down menus and more. These types of additions can take a static dashboard and transform it into an interactive presentation. As a result, “what if” questions can be answered immediately. This is perfect for any meeting with key stakeholders.
Quantrix Qloud: A Single Source of Truth
Whether a model is shared internally to another team, or externally to a client, it’s important that users are only viewing one version of the truth. When models are shared via email or using a shared space online, there’s an increased chance of unwanted edits. With Quantrix, users can share models using Quantrix Qloud. Qloud is a platform that allows users the ability to share models with varying levels of access and visibility. This ensures that all users are viewing the same source of truth, and provides protection against unwanted changes to a model.
Share Models Online
Share your models securely online with Quantrix Qloud.
Custom Views
Quantrix makes it easy to configure custom views and workspaces of a model for different people based on their role.
Considerations
Switching to a new software solution should not be a headache. Quantrix offers features and services to help users make an easy transition.
FAQs
Does Quantrix offer training or support?
Yes! We offer a coaching program called the Accelerate Program. Accelerate is a 6-week, hands-on coaching program designed to help your team build their first model faster. In each week’s workshop, new users will receive tips and best practices on the most common (and crucial) topics that new Quantrix modelers should know. Additionally, Quantrix has a global network of partners who are able to provide trainings and model creation.
Can Modeler be used on PC and Mac?
Yes, Quantrix can be used on both PC and Mac.
Is there a Quantrix Function Library?
Yes, there is a function library that can be accessed directly in Modeler. Many of the functions will be similar to Excel.
Can companies use a mix of Modeler and Qloud?
Yes, each use case can be different. Some Quantrix customers prefer everyone to have access to Modeler. Other customers will only have a few model builders who share the models online using Qloud.
User Testimonials
Quantrix customers come from just about every industry and represent just about every use case. No matter where the users come from, they all share similar themes when talking about Quantrix products: agility, clarity, speed, and resilience.
“Each time I’m thrilled to see how easy it is to incorporate a new element into the model. The model still calculates very efficiently and is very clear and understandable.”
Gilbert Hangartner, Risk and Business Modeling Specialist
“We needed something that could handle all of that data and do it effortlessly and some of the standard spreadsheet tools just couldn’t keep up.”
Nikki James, Global Director
“I can step through a formula to see what is being manipulated, and understand the impact of any change I will make. Thanks to category relationships between matrices and dimensional linking through formulas, even my most complicated models only need a few hundred formulas to calculate tens of millions of cells!”
Jason Klinghoffer, Director
“We are receiving updates on over 7,000 accounts – GL (general ledger) accounts – and with Quantrix we’ve reduced the process of updating our financials from something that used to take us approximately 10 hours now takes us about 15 minutes.”
Rich Lopez, Financial Modeling Manager
Want to learn more?
Get in touch with us to find out how Quantrix can work in your business!
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