Perhaps you’ve seen them. The solitary, overworked, and burned-out person who’s responsible for managing your company’s Excel database. They spend weeks at a time compiling reports, only to start from the beginning again with the next reporting cycle.
Microsoft’s Excel is immensely useful, highly flexible, and easy to amend. If you know what you’re doing, you can go from nothing to reports and graphs in less than an hour. These features make Excel an incredibly attractive business tool, but therein lies the problem. Excel is just that, a business tool. However, a high number of companies rely on Excel as their database storage – and that’s a recipe for trouble.
Overreliance on Excel is a tough habit to break, but with the right software solution, you can start to use data more efficiently. In this article, we outline the features you should look for in a software solution to release the hold your spreadsheets have over you.
Practical Solutions to Excel’s Problems
In 2016 the Enterprise Times reported on a survey that showed that over 60% of US businesses relied heavily on Microsoft Excel for financial consolidation. Things don’t seem to have changed much since then, and one of the respondents to this same survey highlighted two major problems: “Too time-consuming and error-prone…”
Seeking a software solution is one option, but you have to know what you’re looking for. With this in mind, here are the key problems with depending on Excel as part of your finance processes– and how the right software solution can overcome them.
The Bus Factor
What would you do if your ‘Excel guy’ walked out? Extensive dependency on a single team member is never a solid plan, but it’s even more problematic when they harbor specialist knowledge. The kind of specialist knowledge of how your entire spreadsheet-bound finance process works, for example.
The ‘Bus Factor’ describes a concentration of information in a single person. If they were to be hit by a bus, their projects and even entire organizations can go into disarray.
It sounds crude, but this is the risk businesses run by relying on Excel to do the work of an entire system. Spreadsheets take a lot of manual work to maintain and are often administered by just a handful of (if not one) individuals. It’s easy to see how things could quickly go wrong if their knowledge was suddenly lost.
Solution: Use a stable software solution that maintains itself and cuts out the manual work through automation. The right software can beat the Bus Factor by minimizing manual entry and making it easier to retrieve, view, and apply data.
Using Excel to log key data and run reports puts your business at risk of fraud. Since there is no reliable audit trail, changes made to the data can’t be traced. This makes it easier for bad apples to falsify data and influence the outcome of reports.
As a case in point, one business was deceived out of millions of dollars in unjustified bonuses when their sales team fraudulently changed historical data. With no way of checking that changes were being made, the company didn’t realize what had happened until it was too late.
Solution: Use a software solution with a clear and secure audit trail. Users should not be able to amend historical data unless they have the relevant permissions to do so.
High-Maintenance Mapping Tables
Typical businesses use multiple software applications to perform various functions. Each system uses its own names, codes, and schema to deal with the same data. This makes it difficult to combine that data. A common solution is to use so-called “mapping tables” in Excel, but this is labor-intensive and leads to unwieldy spreadsheets.
Solution: A Master Data Management (MDM) tool that allows you to easily integrate and manage data across different applications. Data will also become more accessible across different business centers since the MDM is a single source of information – uniting all data in a go-to location to be used as needed.
Trust and Dependability Issues
People make mistakes. That’s only natural, but an Excel “database” needlessly introduces human error into your business data. Just one broken formula or incorrect input could render your graphs and reports inaccurate. Such errors are notoriously hard to spot and even harder to fix.
There are many ways these errors can erupt and evolve as well. This causes a trust issue amongst users to believe the data is correct. They may even end up using their own numbers causing rampant inconsistencies throughout the organization.
All of this can lead users to distrust data in the spreadsheet as reports are not deemed reliable enough to inform major decisions.
Solution: Use a software solution that makes it easy to trace the source of data and allows manual corrections (by users with the correct permissions).
Ineffective Use of Data
Excel makes it easy to manipulate data, but it’s not well suited to storing that data. Since you’re working with files rather than a live system, it becomes very difficult for users across different teams and business centers to use the same spreadsheet. Version control is now a nightmare.
Organizations that want to become more data-driven must empower users to make effective use of the data they have. This might mean comparing metrics across different fields (such as HR statistics with sales figures), which becomes extremely complicated when calculated using Excel formulas.
Solution: Use a structured database to store your data, so it’s easily accessible with proper access authorization. Data transformations should be done with well-thought-out steps embedded in code; not ad-hoc in spreadsheets.
Escape Excel with Master Data Management
Excel is still an unavoidable part of modern business, but it’s very risky to run a company on spreadsheet software alone. Fortunately, many companies are now discovering the realities of managing reports and information in the age of big data. Building trust of this data is just the beginning.
Replacing your Excel database with a software solution that fits your needs will save time and improve the quality of your reports. The Cohelion data platform formalizes and automates the data management process. It provides a secure audit trail, unites the outputs of multiple systems within a single source of truth, and facilitates manual corrections.
Spreadsheets will always have their uses but breaking your Excel habit will pay dividends for your company.