Since the 1980s when spreadsheets were developed for recording and reporting data, organizations have relied on this marvelous invention for making strategic business decisions. With the advent of spreadsheets, performance trends became more evident as well as the bottom line. Most companies today still rely on spreadsheets to take the pulse of their company regarding sales, inventory, budgets, revenue, losses, and other extremely important information.
However, the information in spreadsheets often takes a long time to gather from different sources, and then it needs to be manually entered into rows and columns. It is only after this drudgery has been completed that finance and operations departments could analyze the data and report on the results. And then this laborious effort needs to be repeated again and again.
Here are five main reasons that the over-reliance of spreadsheets is hurting your company rather than helping.
1.) Spreadsheets are not easily consolidated – Aggregating different budgets, for example from Sales, where spend is broken down into different workbooks and tabs (e.g. travel & entertainment, tradeshows & events, list purchase, and advertisement), and allocated to different lines of business (e.g. CRM software, ERP software, data back-up, security & anti-virus, and infrastructure) is not easy. This makes 20 individual spreadsheet matrices that have to be aggregated everytime a change is made or a new report is needed.
2.) Spreadsheets are prone to error – Because the data in spreadsheets may be compiled from different sources and the spreadsheets are used to bridge the gap, they need to be manually entered, leading to typos, inverse digits, etc. And when the numbers are modified incorrectly, this leads to further mistakes that are difficult to track and correct.
3.) Spreadsheets are not agile – The modern business landscape is fast-paced and ever-changing. The information a company needs now or tomorrow may be completely different from what was required yesterday. Oftentimes, spreadsheets are created in a repeticious manner with pre-set formulas and links to other fields and workbooks, and a lot of thought and planning need to take place to change the structure of the spreadsheet.
4.) Spreadsheets do not lend themselves to quick decision-making – Extracting and collating data from different departments and summarizing the information for company decision-makers can be very arduous. Everyone involved in processing the information must tediously ensure the integity of the data. And double-checking the numbers, although important, takes additional time. In the end, the information may not be reported in a timely enough manner for decision-makers to act quickly, or they are forced to “fly blind.”
5.) It is difficult to track information in spreadsheets – Various people may be working on different spreadsheets which may be interrelated data scattered across a number of teams, offices and even geographies. Spreadsheets may not always total up to what has been submitted. Who changed what, and where was the change, makes auditing difficult indeed.
What if this data could be more easily obtained, and it was more timely and accurate? And what if you could use your valuable time where it counts – analyzing and reporting on the data instead of mostly performing wearisome “leg-work?” In the end, you could make a bigger and more strategic impact on your company.
Growing businesses need synthesized information at a moments notice to be nimble and react to market changes more quickly, and spreadsheets are not always the answer.