Many businesses use Excel spreadsheets for a variety of needs. They are a great way to organize information, and if used correctly, can add value to an organization in a number of ways. If spreadsheets are used as a source of business intelligence information, however, challenges often arise. A comparison of Excel versus business intelligence is always a useful exercise and helps people to rethink their manual work practices and what they can achieve with a more powerful, accurate and robust system.
Pros of using spreadsheets
Using spreadsheets is relatively inexpensive. Most of the time, spreadsheet software comes with an office computer as part of the Windows package, or alternatively, there is free software offering spreadsheets. This is great for small businesses with small budgets.
Spreadsheets allow you to insert text, numbers, link and even images. This makes spreadsheets ideal for gathering research or storing information that requires both numbers and images in a structured format.
Spreadsheets allow you to work with formulas, and substitute numbers to perform ‘what-if’ analyses. Providing calculations do not become too complex, this is a way many smaller companies provide estimates of, for example, revenue given X amount of products are sold.
These are just a few of the benefits of spreadsheets. However, when spreadsheets become a business’ source of data analytics, the cracks start to emerge.
Cons of using spreadsheets
Spreadsheets are often used to combine data from different reports and data sources. When using formulas in spreadsheets, it is easy to make a costly error. In addition, errors are incredibly hard to identify in spreadsheets. As a result, you may be working with incorrect data without knowing it for a long time.
Spreadsheets, while easy to use at a basic level, can get incredibly complex when they are used to gain insights from company data. So much so, many companies end up employing a staff member with expert excel skills for this purpose, eliminating any financial benefit of using spreadsheets. Therefore, the larger a business becomes, the more data, and the more complex the spreadsheet.
Security can be a concern when working with spreadsheets. Spreadsheets containing sensitive information can be sent in emails, put on USB sticks and otherwise shared in manners that make them prone to security threats. You are able to lock most spreadsheets with a password, however, these may not be difficult to crack for someone with malicious intent.
Version control is an issue with spreadsheets. Staff within your organization will no doubt be using different versions. They may send you an XLS file – how will you know if you have the latest version? Perhaps they have modified the file. How can you have consistency in your decision making when different staff members are using inconsistent information?
Make your business’ use of spreadsheets go from good to great
We are not advocating your business stops using spreadsheets or Microsoft Excel altogether. Rather, we are proposing a few simple steps you can take to ensure your business does not lose out due to errors made when analyzing company data.
By using a purpose-built business intelligence solution such as Phocas, you can help ensure your data is presented correctly. Phocas can combine data you have stored in different locations, such as your ERP system, CRM system, and spreadsheets. By allowing Phocas to take care of this combination of data, you eliminate any scope for human error, such as an error in a formula or the omission of a digit.
Better still, using Phocas allows your end users to perform their own analyses quickly and easily. Phocas’ interface is intuitive and easy to use for even those without a technical background. It also updates automatically so you will always be working with the latest company data. These benefits come in addition to greater security. Phocas has internal security restrictions, meaning that an employee’s account can be set up so he or she only sees data relevant to their role. External security measures are also put in place to protect your company data from outside sources.
Upgrade financial statement creation from Excel to Business intelligence too
If you're reading this blog and you're an accountant - you'll be pleased to learn Phocas has Financial Statements software that works in tandem with its core business intelligence product and Excel.
What the Phocas solution has concentrated on is removing the limitations of Excel and used the power of the business intelligence solution to carry out data consolidation, analysis and customization, so the preparation of the financial statements is straightforward and replicated quickly and efficiently.
Phocas financial statements are also designed to work with Excel and have an extension into it, as required. When exporting to Excel, all Phocas hierarchy's are maintained, and formulas remain intact for seamless integration enabling additional modelling such as cash flow forecasting.
To learn more about getting the most out of the partnership between business intelligence and Excel, download a free copy our eBook by clicking here, or on the button below.