Standalone Spreadsheets vs. Enterprise Processes: A Micro-Explainer

The Two Worlds of Spreadsheet Use

There are two fundamentally different ways in which spreadsheets are used in business: the standalone, single-user approach and the enterprise process approach. While both involve working with spreadsheets, they differ significantly in terms of scalability, collaboration, and efficiency.

The Standalone, Single-User Spreadsheet

Consider Tim, an individual working with spreadsheets. Tim receives data in CSV files, imports them into Excel, and performs his analysis using tools like Power Query. He is highly productive and happy with his workflow. As long as Tim’s work remains within his own scope and responsibilities, there is no issue.

However, the problem arises when multiple people—let’s call them Tim, Tom, Ted, and Tessa—each receive separate spreadsheets, process them independently, and then exchange spreadsheets with each other. This results in what is known as a point-to-point collaboration model, where spreadsheets are manually shared, updated, and recombined.

This approach quickly becomes chaotic—akin to a Jackson Pollock painting—because:

• Multiple versions of the same data exist in different files.
• Collaboration depends on email attachments or shared folders.
• Errors multiply as manual changes are made to each version.
• There is no central source of truth.

This scenario might work for an individual, but when scaled across a business, it creates inefficiencies that management does not want.

The Enterprise Process Approach

An enterprise process, by contrast, is designed to be company-wide, structured, and automated. Here, the goal is not manual work, copying, and pasting, or reliance on keyboard shortcuts. Instead, management wants systemized, scalable, and efficient processes where:

• Data is centrally stored and updated in a hub-and-spoke architecture.
• No physical spreadsheets are exchanged—only data flows between front-end spreadsheets and a centralized back-end database.
• Everyone across the organization is working from a single source of truth, ensuring consistency and accuracy.
• Manual interventions are minimized, and processes can be automated for reliability and efficiency.

The Industry Perspective

This issue has been highlighted in multiple industry discussions. The Wall Street Journal published three articles—one in November 2017, a follow-up two weeks later, and another in 2020/2021—stating that spreadsheets don’t work for enterprise-wide processes. They were referring to the point-to-point Jackson Pollock mess, which indeed is not suitable for large-scale business operations. However, what they failed to highlight is that a hub-and-spoke architecture, which eliminates the need for physical spreadsheet exchange, is both easier and cheaper to implement with Excel than with many other technologies, including cloud-based FP&A tools like Workday Adaptive Planning and Anaplan.

The Misconception Around FP&A Tools vs. Excel

Industry figures like Paul Barnhurst and Christopher Argent inadvertently support the hub-and-spoke client-server model when they promote FP&A tools. Yet, they often dismiss Excel without acknowledging that Excel itself is the most powerful tool for implementing this architecture. The real issue is not Excel, but how it is used. When designed correctly, Excel can serve as the front end to a fully scalable enterprise data system.

Demonstrating the Difference

The difference between standalone and enterprise spreadsheet processes can be easily demonstrated. Consider:

• Budgeting models: A single-user spreadsheet might be fine for one person’s calculations, but enterprise budgeting requires real-time collaboration across departments.
• Account reviews: Instead of manually compiling spreadsheets, a centralized system allows teams to review data in real time with automated updates.
• Call center operations: Instead of reconciling multiple reports from different teams, a structured database can provide a single view of performance.

The Challenge: A Benchmark for Comparison

To settle this debate, we can conduct a simple challenge:

1. One group uses advanced Power Query, dynamic arrays, and XLOOKUPs to process enterprise-wide data.
2. Another group uses a hub-and-spoke architecture with Excel as the front-end and a database as the back-end.

Comparing the results will highlight the inefficiencies of the point-to-point spreadsheet model and the advantages of an enterprise process approach.

Conclusion

The key takeaway is that standalone spreadsheets and enterprise processes are two entirely different things. Techniques that work for Tim as an individual do not scale to a collaborative enterprise environment. Management wants structured, systemized processes—not a tangled web of manually updated spreadsheets.

The solution? Move from a point-to-point spreadsheet mess to a streamlined hub-and-spoke architecture using Excel as a powerful front-end tool.