Spreadsheet applications and organizational objectives

Spreadsheets and Their Use in Attaining Objectives

The value of spreadsheets has grown in direct correlation to the breadth of their adoption, and the creativity users have applied to using these software applications in solving problems. From the very simple tasks of calculating a series of figures to the complex calculations required for defining and simulating lean manufacturing strategies (Shannon, Krumwiede, Street, 2010) spreadsheets are now the cornerstone of how many companies measure their progress to their goals. The intent of this paper is to explain how spreadsheets enable employees and entire companies to attain their objectives.

Spreadsheets and Objectives

Spreadsheets were originally adopted through companies who needed to manage finance and accounting tasks, including Accounts Payable and Accounts Receivable. Over time, spreadsheets have grown in sophistication and depth of calculation capability, and as a result today are used for cash flow analysis and cash projections across divisions of companies (Stephenson, Porter, 2010). The use of spreadsheets for defining financing options within a company are now commonplace as well (Jelen, 2010). Spreadsheets have as a result become indispensible for many of the professions in accounting, finance, operations and executive management. The ability to model complex finance transactions and define the scenarios where one investment will be more profitable than another is also possible using spreadsheets. The definition of entirely new businesses is also possible using spreadsheets as well. All of these factors have contributed to spreadsheets becoming the most popular application in organizations, as the analyses they contain often define the direction of companies in the short- and long-term.

The four functional areas of management are planning, organizing, leading and controlling. Over time, spreadsheets have become integrated into each of these four functions of management. In the area of controlling organizations, the tasks of analyzing why strategies achieve objectives is critical for the future growth of an organization. Spreadsheets are often used to measure this variance between a strategic goal and the results achieved (Larson, Hsu, 2010). This type of analysis, called variance analysis, is invaluable in measuring each factor that contributed to a goals' attainment. The use of spreadsheets to isolate the factors that led to the success of one strategy vs. another often becomes the cornerstone of future successful growth by companies as well.

Conclusion