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Excel Spreadsheet Use and the Strategic Corporate Plan

 

Introduction
In years past, every well-run corporation undoubtedly had a written
business plan. Oftentimes, these plans were considered by many to be an
exercise in frustration, as they were laboriously considered, written,
then stored on the company's library shelf until the next business
planning cycle. The last few decades have seen a radical change in the
way companies do their planning. More often than not, the "old"
business plan - though still produced and of value in its own right -
is given less attention than the newer Strategic Plan. Unlike the
Business Plan, which tends to be a very short document, the Strategic
Plan is likely to be much more substantial and detailed. The Business
Plan provides the foundation and framework for the Strategic Plan.1
Senior business managers are often so occupied with immediate issues
that they can easily lose site of the long-term objectives of the
business - objectives upon which the business can thrive if attained or
fail completely if not. Because of this, a Strategic Plan today is a
virtual necessity. Most managers tend to see the Strategic Plan as a
'living' document; one that, with careful foresight, consideration and
development is written at the start of a business planning period, then
reworked as circumstances within the company and business climate
change throughout the planning period.2 The writing and preparation of
a Strategic Plan is an important effort, demonstrating that careful
consideration has been given to the business's development; however,
the ultimate goal of the Strategic Plan is its own realization. With
the advent of the personal computer and spreadsheet development, the
Strategic Planning process today is made easier with the many current
spreadsheet programs available to aid in the Plan' A Short History of
the Spreadsheet

The term "spread sheet" (nowadays "spreadsheet) has a
long history, beginning with the non-computerized
version, a reference to which was made in accounting
books from the early 1950's to describe a worksheet
providing a two-way analysis of accounting data (i.e.
an accounting matrix in which the columns and rows
constitute either debit and credit sides)3 In thinking
about the history of the spreadsheet, two important men
stand out. In the early 1960s, Richard Mattessich of
the University of California at Berkeley pioneered
computerized spread sheets for business accounting. As
the forerunners of today's spreadsheet programs for
PC's such as Lotus 1-2-3, Excel, etc., these spread
sheets contained use of matrices, (budget) simulation,
and, most important, the calculation to support each
matrix cell."4 Although Mattessich's work was
mentioned in economic and computer literature as well
as accounting literature, computerized spreadsheets
only became popular in the 1980's after the introduction.

In the late 1970's as computer manufacturers sought to sell their new
machines to the public, they had yet to convince anyone that the
machines would be useful to the average person. What real application
could the heavy metal boxes possibly have? Daniel Bricklin, often
referred to as "The Father of the Spreadsheet," thought the same and
went on to lead innovations in software development, which would
revolutionize the way businesses - and the world - would run.5 Using
Excel Spreadsheets in Strategic Planning Information systems have
driven the vast, relatively recent changes in how companies do
business. From software selection through full deployment, consulting
companies now thrive worldwide catering to a seemingly endless business
market. Though a wide variety of spreadsheet softwares are available in
today's market, including company-specific individualized softwares
written and tailored for a particular organization's needs, a popular,
common spreadsheet software widely used in the business community is
Excel. Excel is a powerful, easy-to-use software for preparing
financial spreadsheets and can be the primary software used in the
financial portions of any well-written Strategic Plan. Basic Excel
program add-ins such as Exl-Plan, a comprehensive financial projection,
budget, business planning software which operates from Excel for
Windows versions 5, 7, 8, 95, 97 or higher6, and Analyze-It which
includes 14 parametric & 17 non-parametric procedures for calculating
descriptives, comparing means, correlat In creating the detailed
Strategic Plan, the manager or planner can utilize Excel spreadsheets
to build a model first from the principles of the Business Plan. A
Strategic Planning spreadsheet should be developed to assess the
business's current internal strengths and weaknesses, and external
threats and opportunities. A long term vision for the company (3-5
years time) should be prepared, written in present tense and address
the following: * Vision: What will the business look like?

* Mission/Purpose: What will the business really be doing? What
activities will it perform, where, how, etc? * Values: Statement of
corporate values and beliefs * Objectives: Long-term objectives
(primary reasons for being involved in the business) * Strategies: Key
strategies for business and major functional areas (build on strengths,
resolve threats, exploit opportunities and avoid new threats) * Goals:
Specify major goals achievable over the next 3-5 years (quantify in
terms of sales, market shares, finances, operations, etc) * Programs:
Define strategic action programs (who, what, where, when, how - set
targets and prioritize)8

Excel spreadsheets can be the primary analytical tool for working with
nearly all Components- as laid out above - of the Strategic Plan. The
ongoing monitoring of progress, detailed analysis and other steps
absolutely vital to the successful execution of the Strategic Plan can
all be done using Excel and Excel add-ons. Carefully monitoring the
spreadsheet data will help with both financial projections and current
realities.

Since Excel is so widely used, it is highly dependable software
for shared data. This is important in larger or geographically
diverse organizations where information must be accessed and
shared by a variety of end users. Though spreadsheet programs
like user-friendly Excel are generally considered only as tools
for accounting and budgeting, this is a highly limited view.
Excel has advanced charting capabilities for producing graphs
of data, rudimentary database functions, and a macro
programming language for complex data manipulation tasks. 9The
adept user can utilize Excel to analyze and present data in
different and highly effective ways such as visually (through
charts and graphs) and illustratively (to describe different
phenomena). The ability to use the same spreadsheet many times
can produce cost savings because development time is shortened,
redundancy is eliminated, and man-hours invested are
shortened. Today's larger companies most often have employees
specifically assigned to data analysis and management. For the
Strategic Plan, these two roles are critical. For the Strategic
Planning points highlighted on the previous page, Excel software plays
a vital role: (Strategic Vision: Excel can help the manager/planner to
organize the data which will shape the vision of the what the company's
financial future will look like, projected cost of capital
expenditures, number of future employees, customers, shareholders, etc.
- advance knowledge of these are all critical to the Strategic Plan.
(Strategic Mission/Purpose: Excel can be used to help the
manager/planner decide how the company will decide which activities it
will perform, where and how by analyzing the data from all proposed
scenarios so that the company can decide which alternative is most
viable. (Strategic Objectives: Long-term objectives can be planned,
monitored and continuously analyzed for effectiveness using Excel
spreadsheet data. (Strategies: By using historical financial and
operations data, key Strategies for the business and major functional
areas (typically Financial/Operations/Human Resources) can be mapped
out with confidence. Collecting and analyzing data from competitors
can help the manager/planner to compare where the business is in
relation to its competitors. (Strategic Goals: In specifying major
goals for the long-term (3-5 years), Excel is an extremely valuable
tool for quantifying sales, market shares, finances, operations.
(Strategic Programs: This area is where Excel is an absolute must.
Setting and prioritizing realistic, achievable targets supported by
data is critical to the Strategic Plan.10 Conclusion Excel is a
10-year-old software well suited to any task requiring computations on
tables of numbers or any task, which requires the production of concise
reports from raw data. The charting and text manipulation features
make Excel well suited for producing attractive and informative
reports, presenting information visually and in a way most can
comprehend. In its own short history, Excel has helped transform the
way we work.

Works Cited
(Listed in order of importance)

Getting to Know Microsoft Excel, Client Services Group, University of Saskatchewan, 
1994 http://www.usask.ca/dcs/online_docs/excel.html#WHATIS 

"Developing a Business Strategy," Plan Ware Invest-Tech Ltd., 
http://www.iol.ie/resource/planware/strategy.htm#1.

>From interview with Consumers Water Company employee, Barbara Delage, Executive 
Assistant to the President and C.E.O. and Vice President and C.O.O.

Spreadsheet: Its First Computerization by Richard Mattessich-Professor, University of 
British Columbia

Biography of Daniel Bricklin, Adam M. Fleming-Virginia Tech, 1997. 

Exl-Plan Software, http://www.iol.ie/resource/planware/exlplan.htm

From: George J. Murphy,"Mattessich, Richard V., The History of Accounting--An 
International Encyclopedia (New York: Garland Publishing Co., Inc, 1997): 405.

1 "Developing a Business Strategy," Plan Ware Invest-Tech Ltd., http://www.iol.ie/resource/planware/strategy.htm#1.
2 From interview with Consumers Water Company employee, Barbara Delage, Executive Assistant to the President and C.E.O. and Vice President and C.O.O.
3 Spreadsheet: Its First Computerization by Richard Mattessich-Professor, University of British Columbia
4 From: George J. Murphy,"Mattessich, Richard V., The History of Accounting--An International Encyclopedia (New York: Garland Publishing Co., Inc, 1997): 405.
5 Biography of Daniel Bricklin, Adam M. Fleming-Virginia Tech, 1997. 
6 Exl-Plan Software, http://www.iol.ie/resource/planware/exlplan.htm
7 Analyze-It for Microsoft Excel, http://www.analyse-it.com/info/default.htm
8 How to Write a Strategic Management Case, Dr. Randall S. Hansen, Stetson University http://www.stetson.edu/~rhansen/strategy_case_writing.html 
9 Getting to Know Microsoft Excel, Client Services Group, University of Saskatchewan, 1994 http://www.usask.ca/dcs/online_docs/excel.html#WHATIS 
10 How to Write a Strategic Management Case, Dr. Randall S. Hansen, Stetson University http://www.stetson.edu/~rhansen/strategy_case_writing.html 
 



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