Why spreadsheet reporting is killing your business
Microsoft Excel is frequently referred to as the number one business intelligence (BI) tool because it is one of the most commonly used applications. For smaller businesses, Excel is a useful tool for simple calculations and analysis. However, as your business grows and customers are harder to keep, your need for sophisticated data analysis will outgrow Excel's capabilities.
At this point, the limitations of Microsoft Excel are, at best, inefficient, and at worst, potentially dangerous. In today's article, we'll examine the the drawbacks of spreadsheets for data analytics and how BI can offer a more reliable solution.
Downfall 1 – spreadsheets are susceptible to human errors
As your business grows, so too will the amount of data you will analyze. Because entering and manipulating data in Excel is a manual process, spreadsheets are extremely susceptible to human error. A broken calculation in a single cell will cascade throughout your data. Compromised data integrity can lead to considerable lost opportunities which may damage your business. No company can afford to rely on an outdated tool that is potentially rife with errors when accurate decision needs to be made fast.
Downfall 2 – spreadsheets are difficult to troubleshoot
The ability to troubleshoot spreadsheets would mitigate the problem of human error. However, spreadsheets aren't built for unscrambling because interrelated data is often scattered throughout various folders, departments, and branches. Even if the location of every related data file could be located, pinpointing error in a formula through related cells is extremely time-consuming. This inability to troubleshoot can be quite dangerous if a critical business decision is made using questionable data.
Downfall 3 – spreadsheets are not agile
Spreadsheets are designed to evaluate two-dimensional data. To gain a more in-depth insight, other dimensions must be manually created. As the spreadsheet accumulates more data, it becomes slow and cumbersome. Additionally, reports must be manually updated to reflect the most current data. Precious time and productivity are lost while waiting for important answers to queries.
Downfall 4 – spreadsheets are not collaborative
When using spreadsheets, the fastest way to exchange the relevant data is through email. This method is subject to duplication or erroneous data. With so many files being sent around, it is difficult for team members to keep track of them all and mistakes happen. For instance, outdated versions may be sent inadvertently.
Downfall 5 – spreadsheets are not supportive of quick decision making
In data analysis, your data is extracted from different departments and is consolidated to provide an overview. When using spreadsheets, this process is very time-consuming as it can take several days for IT to generate a report. Oftentimes the data in the report is obsolete by the time it reaches your desk. As a consequence, it is nearly impossible to engage in the rapid-fire decision making necessary to keep up in a dynamic marketplace.
Downfall 6 – spreadsheets are not intuitive for the everyday business user
The majority of spreadsheet users find it difficult to create complex formulas. Their knowledge is limited to simple functions like "sum", "average" and "sort." For advanced applications, the average users must turn to co-workers with advanced training in Excel. Excel lacks the intuitive nature of a BI tool, making it a complex and time-consuming process to update, refresh, or merge data.
Downfall 7 - spreadsheets have security risks
Since spreadsheets are commonly shared through email or taken off-site with a thumb drive, your data is at risk of security breaches. Password protected spreadsheets can be compromised with free third-party software. Unprotected data can be exposed to fraud or can be sent to your competition. Because there is no built-in audit trail, there is no way to record who made the changes or why. There is also no roll back capability or archive to rely on.
When spreadsheets are used in place of a more appropriate BI tool, your company is exposed to a number of risks and can miss out on potential opportunities. With a quality BI tool in place, you are able to manage large volumes of data from disparate sources without the risk of human error.
Your data is instantly converted and viewable as visual charts, graphs and tables. BI is very intuitive and dashboards can be customized quickly by nontechnical users. Employees from each department are able to collaborate, customize reports, and share information within the software, eliminating the security risks. With a single view of the truth, actionable insights are quickly revealed, increasing opportunities to reduce costs, increase sales, streamline operations, and identify new opportunities.
Mike works with Sales, Finance, IT and Business Leaders who are keen to optimize their business intelligence and data analytics capabilities. He has helped many businesses drive sales and find opportunities within their data.
The Importance of Effective Cash Flow Management
Cash flow is vital for businesses. It is the money coming in and going out of a business. It’s like fuel for a car. Without enough fuel, a car can't move forward; similarly, without enough money, a business can't operate or grow effectively.
Financial statement analysis: what's changing?
Financial statements are scorecards for businesses, allowing the finance team to interpret and analyze financial performance.
How to improve your business budgeting processes
It’s no secret that completing the annual budget is a headache for CFOs.
Phocas secures 37 top rankings in BARC's 2023 BI + Analytics Survey
The voice of the BI and analytics community has officially spoken following the release of The BI & Analytics Survey 23 by software selection and strategy experts, BARC last week.
Find out how our platform gives you the visibility you need to get more done.Get your demo today