- What is actually blocking your rationalization?
- What the spreadsheet already does
- What the software actually adds
- From diagnosis to decision
- When should you buy the software?
- When is the spreadsheet the right answer?
- How to run it on a spreadsheet
You are asking which tool to use. The question that decides it is different: is your rationalization stuck because nobody can do the analysis, or because nobody will make the decision? Those have different answers, and only one of them is a software problem.
Almost every stalled SKU project I have seen was stuck on the second. The list existed. Somebody had built it. What was missing was agreement on the rules, an owner with the authority to sign, and a plan for the customers involved. No tool supplies any of those.
What is actually blocking your rationalization?
Ask where the last attempt died. If it died at the spreadsheet, because nobody could assemble the data or the analysis took a month and was stale on arrival, you may have a tooling problem. If it died in a meeting, you have a decision-rights problem, and buying software will give you a better-looking list that dies in the same meeting next quarter.
There is a third failure that looks like tooling and is not. Sometimes the analysis was fine and nobody trusted it, because the cost allocations were obviously wrong or the data had gaps everyone in the room knew about. That is a data quality problem. Software will read the same data and produce a more confident version of the same doubts.
What the spreadsheet already does
Everything the analysis actually requires. A year of invoice lines with customer, product, quantity, and net price, joined to a cost per product, gives you the customer and product grid, the contribution ranking, and the exposure estimate that the decision rests on.
It is also the tool that gets built in a week by someone who already works there and understands why the data looks the way it does. That last part matters more than it sounds: the person who builds it knows which segment codes are unreliable and which customers are really the same customer, and that knowledge is what makes the output believable to the people who have to act on it.
What the software actually adds
Repetition, scale, and traceability. If the analysis has to run monthly rather than annually, across tens of thousands of active part numbers, with an audit trail showing who changed which assumption and when, a spreadsheet becomes a liability rather than a tool.
| What you need | Spreadsheet | Software |
|---|---|---|
| First honest look at the portfolio | A week, by someone who knows the data | Weeks of implementation before any answer |
| Annual or one-off review | Adequate, rebuilt each time | Overhead you use twice a year |
| Monthly or continuous review | Fragile, depends on one person | Genuinely better |
| Tens of thousands of live SKUs | Slow and error-prone | Built for it |
| Audit trail and shared assumptions | Weak | Real advantage |
| Agreement on what to cut | No help | No help |
From diagnosis to decision
The table tells you what each tool is for. What follows is the call itself, in the two situations that cover most businesses.
When should you buy the software?
When the review is continuous rather than occasional, when the catalog is large enough that a spreadsheet cannot be checked by a human, and when several people need to work from the same numbers without emailing versions around. Those conditions are real and they do occur.
Buy it after your first manual cycle, not before. A business that has run one rationalization by hand knows what its data is missing, which allocations it argues about, and what the output needs to look like. That business buys the right tool and configures it correctly. A business that buys first is paying a vendor to teach it what its own data means.
When is the spreadsheet the right answer?
Most of the time, and particularly the first time. If you have not yet completed one rationalization, if the review is annual, if the catalog runs to a few thousand parts rather than tens of thousands, the spreadsheet gets you to a decision faster and for nothing.
The honest reason this answer is unpopular is that buying software is a visible action and building a grid is not. A purchase looks like progress, involves other people, and creates the comfortable sense that the problem is being handled. Six months later the tool is live and the same products are still in the catalog, because nobody ever agreed the rules or named the person who signs.
How to run it on a spreadsheet
- Export a year of invoice lines. Customer, product, quantity, net price, and date, straight from the ERP, with no pre-aggregation.
- Attach a cost per product. Use your best available figure and note which ones you distrust rather than stopping to fix them.
- Build the grid. Customers down one axis, products across the other, contribution in the cells.
- Rank and mark. Sort products by contribution per hour of your constraint, and mark every candidate bought by a top-tier customer.
- Take it to a decision. Agree the rules, name the person who signs, and set retirement dates.
Steps one to four take about a week. Step five is where the project either happens or does not, and no version of steps one to four makes step five easier.
What to do Monday morning: export the invoice lines before you book the software demo. If the grid is built by Friday, you will know which question you are actually trying to answer.
About the Stagnation Assassin
Todd Hagopian is a Fortune 500 transformation executive who has generated $3B in shareholder value across Berkshire Hathaway, Illinois Tool Works, Whirlpool, and JBT Marel, where he serves as Global VP of Product Strategy and Marketing. Known as The Stagnation Assassin, he is the author of two published books: The Unfair Advantage: Weaponizing the Hypomanic Toolbox and Stagnation Assassin: The Anti-Consultant Manifesto. His blog is published in 15+ languages and read by operators worldwide. Bring him to your stage via his speaking page or connect with him on LinkedIn.
If you want a second opinion before the purchase order goes in, request a free 15-minute 80/20 Portfolio Performance Audit and I will tell you whether your problem is analysis or agreement.