Every franchise relies on spreadsheets or printed forms, to some extent, to help manage its field operations. For example, to track field audit scores, benchmark franchisee performance, or collaborate on a store opening. Relying on spreadsheets during the early stages of a franchise system makes sense when it predominantly operates using simple spreadsheets being managed by small, tight-knit teams. As a franchise system matures, by adding new locations, its field audit team and reporting will grow in complexity.
As it grows, field operations will record and exchange more information to continually improve franchisee performance. No matter the stage of maturity of the franchise, the limitations that crop up because of the use of spreadsheets become warning signs to be addressed.
What are these limitations, and what do franchise systems need to consider?
Sign #1: Reduced data integrity and availability
While spreadsheets provide an easy way to template and collect information during field audits, one of the major signs it’s time to move away from the use of spreadsheets is when the information is unreliable or hard to access. Even if only a few people complete, edit, and use this information, there is still room for error. With an increase in the use of Microsoft Excel alone from 30 million users in 1996 to over 750 million users in 2015, the impact of those errors touches businesses no matter how large or small.
The impact of those errors has been studied for over a decade by a leading researcher named Raymond Panko. He has studied the impact and reasons for errors using financial field audits in his studies. He details his conclusion in the 2015 research paper, “What We Don’t Know About Spreadsheet Errors Today: The Facts, Why We Don’t Believe Them, and What We Need to Do”.
Three main outcomes from the research were:
- At least one incorrect bottom-line value is very likely to be present
- Errors are extremely difficult to detect and correct
- Spreadsheet developers and corporations are highly overconfident in the accuracy of their spreadsheets
The main reasons for these errors include rushing, inexperience, complexity, and stress. The higher the stress, the more likely the errors. The research found that even with a high level of experience, stress can increase errors five-fold.
What was found to decrease errors is software. Task-specific software, designed to achieve desired business objectives by eliminating manual steps.
Also, as a franchise system grows, so does the use and complexity of financial, operations, and supply chain systems. These separate systems create information silos, which limit the availability and exchange of information between departments. For example, by making field audit information available to development teams, they can spot their top and bottom-level performers within a territory. Development teams can also use field audit information to easily identify candidates for multi-unit franchisees based on their past performance and dedication to protecting the brand.
The ability to leverage information across a company has also become the norm. Financial, operations, and supply chain Information are aggregated into dashboard reports instead of repetitively copying and pasting information from several different systems into a single spreadsheet. This allows franchise systems to gain additional insights. For example, by comparing these additional types of information, beyond field audits, new opportunities can surface from financial information, mystery shopper scores, customer satisfaction data, online review sentiment analysis, and other third-party data sources.
If a franchise system is experiencing data integrity or availability issues, it should consider moving away from using spreadsheets. The software to automate manual processes and create franchise dashboard software is available. They can reduce errors and aggregate information from your franchise’s core data sources, and automatically present it in an easy-to-understand manner to both the franchisor and the franchisees.
Although perhaps this is the most important reason to move away from spreadsheets, once the franchisor knows its data can be relied upon, the franchise system can look to additional benefits of moving away from spreadsheets, which include recording and tracking accountability, as well as increasing engagement.
Sign #2: Reduced accountability
“Unless commitment is made, there are only promises and hopes; but no plans.”
Peter F. Drucker
Another additional benefit of moving away from spreadsheets and towards software when it pertains to field reviews and audits is to help build action plans and collect feedback from franchisees. Spreadsheets can be useful tools for field coaches to capture information during their visits. Franchise operations can then use the captured information to create action plans, which in turn can be used by franchisees to improve on their historical performance. Although spreadsheets can be used to report and collaborate to a certain extent, they cannot provide a reliable way to track and validate action plan follow-through or accountability.
If a franchisor cannot pinpoint and validate why things are falling through the cracks with its franchisee action plan follow-through or performance, it should consider moving away from spreadsheets. Solutions to facilitate the task creation and corrective action plans to address a franchisee`s weaknesses are available, and should be used to increase accountability.
Sign #3: Reduced engagement
“When people talk, listen completely”
Franchise systems today understand that growth relies on each franchisee’s financial success and how franchisees promote the system to other potential franchisees. Without their success and willingness to promote the brand, the franchise system quickly becomes undervalued or simply undesirable as an investment opportunity. Since field operations are at the front line with the franchisees, discovering what needs improvement, they can understand both the franchisee and franchisor’s perspectives.
Franchise systems rely on franchise business coaches and operations to collect, analyze, and communicate improvement plans to franchisees. This communication may be as simple as correcting compliance issues that affect the brand and customer experience or become more complex with personalized business and operational guidance. The support offered by a franchise system can help foster how a franchisee views the brand. Franchisors can deliver secure and easy-to-access personalized training, support, and franchisee resources.
To deliver this information in a way that can be tracked and acknowledged, a franchisor should not rely on spreadsheets and email. An email exchange with stale spreadsheets between two parties can quickly fall through the cracks due to overflowing inboxes which not only skew the importance (prioritization) of a message but also delays responses and actions from franchisees. Valuable feedback is also not contextualized or accessible by all stakeholders. Although email creates a paper trail, it can be cumbersome and difficult to assemble if needed at a future date.
If a franchisor is experiencing franchisee disengagement, it should consider moving away from spreadsheets. Both franchise collaboration and training software improve the bi-directional dialogue between the parties, and can sometimes even lead to healthy competition between peers.
The alternatives to spreadsheets
Today’s technology fills the gap for franchise systems who need a solution to spreadsheets and email systems when communicating with franchisees and others across franchise systems. Technology can give back time to operations by automating and streamlining workflows while ensuring that operational guidelines are followed. It can ensure that data remains reliable and that information is collected, aggregated, and reported in a timely way.
Field operations can use field audit and performance software to become and stay organized by scheduling their field visits, tracking tasks, centralizing files, and recording actions taken by the franchisor and franchisee. The franchise system can also organize its data through the use of dashboards, where operational, marketing, sales, and loyalty information can be aggregated to discover those new opportunities for customer upselling and franchise expansion.
Regardless of the solution, leveraging technology should ideally help a franchise through its growth challenges, as well as help align or even realign franchisor and franchisee goals for continual system-wide improvement.
Explore and discover more reasons why spreadsheets, as they increase in use, are exposing their limitations and risks. Read more about EuSpRIG’s Horror Stories, and consider what you might be overlooking in your own operation.