• Brendon Koh

The problem with excel spreadsheets

Businesses everywhere overutilize excel spreadsheets – how often have you walked through a process that involved opening one, two, three, or more excel sheets? It is not uncommon for a company to rely on excel to track and manage customer data, invoices, quotes, and other important information.

These spreadsheets are very inefficient in managing business functions and processes, and this can cause further issues for your organization down the road. Here are some of the problems with excel sheets and why you should move away from them.

Why are Spreadsheets Ineffective?

Excel is a ubiquitous business tool, but spreadsheets are often overused. This can cause many problems for your business, ranging from time wasted with data processing, unscalable practices, and data degradation.

Inefficient Data Processing

If your business relies on excel spreadsheets for a variety of business processes, ask the employees who work with them how much time they spend crunching numbers and formatting files as compared to performing value-added tasks. The answer is likely too much time!

Although spreadsheets do serve an important function, relying on them too much can lead to a lot of wasted time “crunching numbers” or “copy-pasting” data from one excel sheet to another. This inefficiency is like a snowball – the more you rely on excel, the more time it takes to process and the more difficult it becomes to manage them effectively.

A study by Ventana found that 54% of companies considered themselves to be substantial spreadsheet users. These companies also took about a week longer to perform their monthly close than those who had automated business processes in place. The same study found that employees waste an average of 12 hours per month just checking spreadsheets – and this does not guarantee that there are no errors!

Unscalable Processes

Relying on excel spreadsheets instead of integrated and digitalized business processing creates problems with scaling your processes in the future.

Individual spreadsheets are often not sustainable, and generally do not survive moving from one owner to the next. How many times have you inherited a spreadsheet and couldn't figure out how to use it or why it was built that way – only to rebuild it yourself to your liking?

Sure, you may have “automated” it a bit more in the next iteration with a macro or some new formulas, but really what you’ve done is waste company time and resources to recreate another spreadsheet with a limited lifespan.

Likewise, the improved spreadsheets start becoming complicated, with formulas and VBA code that are prone to errors. Not to mention they can break entirely if someone accidentally deletes a cell!

This poses a major challenge for scaling your processes as your business grows. Excel spreadsheets lack two major aspects that are necessary to scale processes: integration and automation.

Data Degradation

Perhaps the biggest issue caused by relying on excel spreadsheets is the lack of data integrity and reliability.

Once you move data into a spreadsheet, you basically lose all fluidity. Sure, you can organize information and create some basic charts, but now a separate analysis has to be done to understand the data.

The reality is that the visualization tools in excel are just not enough. It is difficult to determine what is important and what isn’t since you are seeing all the raw data at once, and relationships between the data points are not automatically highlighted.

There is no collaboration or relational database element to excel, so all links have to be manually created.

The less tabular data becomes, and the more polluted it gets with subtotals, “sumifs”, and other empty lines, the more unworkable it is. Now the end-user must try to figure out the logic behind what the creator of the spreadsheet intended, and the data integrity begins to degrade with each level of customization.

Lack of Data Security

When it comes to data security, let’s face it - it just doesn’t exist when it comes to excel spreadsheets. There is no ability to encrypt critical data like sensitive customer information or payment methods.

You can password protect your spreadsheets, but a simple macro can break that lock in a matter of minutes. This means your financial data and customer information is extremely vulnerable to theft if you maintain it in an excel sheet.

Perhaps a greater threat than theft is the potential loss of data from a simple mistake like deleting the wrong file version.

The worst thing that could happen is that your entire company’s financials and historical records are wiped when an employee deletes a file they shouldn’t. Similarly, if all of the information is kept on a computer and it crashes, you risk losing weeks of work and important data.

Although you can back up your spreadsheets and make copies, it does not eliminate the risk posed by the fact that data is not secured automatically. An enterprise solution is required to make sure that your data is safe and secure.

Breaking Away from Spreadsheets

So, are you ready to finally rip the band-aid and break away from problematic spreadsheets? If the answer is yes, it is time to consider a custom database application that is the perfect tool for handling your business processes.

A custom enterprise solution allows for system integration and digital transformation of your business processes – eliminating the inefficiencies and data degradation associated with spreadsheet-based processes.

At Automate Labs, we work with you to build a custom software system that will meet your unique business needs. We pride ourselves in creating solutions that are user-friendly, cost-effective, and can be easily integrated into your company.

No-code development also provides an opportunity for customization without the need to hire an expansive team of developers and data scientists. Our projects can be up and running in just a few weeks – so you can accomplish digitalization and automation in no time!

We will also work within your budget to avoid the financial waste you may find with generic applications. You only pay for what you need, and we won’t waste resources on unnecessary features that don’t make sense for your business.

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