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why excel spreadsheets are bad for business

Why Excel spreadsheets are bad for business: data errors & solutions

Our TORCH team explain why Excel spreadsheets are bad for business (alongside other spreadsheet tools), why people continue to use them, and how to tap into affordable alternatives …

Spreadsheets became a business staple in the 1980s; a familiar tool that the majority of individuals feel relatively comfortable using to this day.

Type ‘Spreadsheets for businesses’ into Google and it’ll deliver page after page of management templates that are guaranteed to help, “streamline the speed and utility of your business”. These free tools and guides promise to enable businesses to organise and categorise their data into a logical format – thus, supporting in their growth.

However, as more and more organisations begin to understand the value that data can bring to their business (and the relative ease at which it can be collected), it’s become apparent that these tried and trusted tools are no longer up to the job. In a recent article discussing the best tools for data analytics, Forbes noted, “The biggest barriers to benefiting from advanced analytics are certainly now organisational, rather than technological.”

Why do companies use spreadsheets?

After decades in the marketplace, it comes as no surprise that organisations are still relying heavily on systems that may no longer be right for them:

  • Convenience and cost: Both factors play a large role in the dependence upon spreadsheets; most people already have the software on their PCs/laptops, meaning there is no need to factor in extra costing. Additionally, generations have been raised on Microsoft platforms, where Excel is familiar and most people already feel relatively confident.
  • Multiple uses: As well as the overall user-friendly feeling, spreadsheets offer versatility and flexibility. They allow individuals to perform hundreds of simple (and very complex) things with the same tool/software.
  • Existing skill sets: Businesses are often limited to the skills base that they have internally/around them. If they are working with an external account, for example, who provides them with a big spreadsheet, this will inherently become their norm. Qualified internal teams may choose/only have the funds or authority to operate within these platforms.
  • Urgency: Internal technical teams are often keen to make fixes to business processes, data-set, etc. Spreadsheets provide a quick solution.

So, why are Excel spreadsheets bad for business?

The ‘spreadsheet are bad for business’ discussion is not limited to Microsoft Excel. There are a great deal of alternatives. Competitors include the likes of Google Sheets, Numbers (Apple), Zoho, LibreOffice, etc.

Regardless of the system, users will encounter problems across all spreadsheet platforms when it comes to managing data sets.

The disadvantages of spreadsheets: Why Excel and spreadsheets should NOT be used as a database …

Vulnerable to Fraud

Spreadsheet systems were never intended to be enterprise-level tools and, as a result, the possibilities for fraud are plentiful. Concealed code, hidden rows or columns, and fallacious inputs are all too easy to disguise.

Multiple Versions of Files

Once spreadsheet documents are shared and individuals begin editing for their own purpose, it’s difficult to identify who has the ‘latest’/’correct’ version.

Prevents Quick Decision Making

Tracking changes accurately is very difficult, especially as the number of users grows. Tracing who changed what (and when) can often become impossible.

Human Errors & Data Quality Management Challenges

Spreadsheets platforms will accept most of what a user types, allowing for spelling mistakes and incorrect data input. Unless there is someone assigned to make thorough checks (which is costly & time consuming), these errors can lead to significant business failures.

Hard to consolidate

So tiresome, in fact, that many organisations offer full tutorials on ways to overcome this. Merging content usually requires the end user to collect and summarise data from each file before combining them.

They Don’t Link to External Data Source

Not only do spreadsheets struggle with external links, there is potential for data links to be used to access and share confidential information without your permission.

Size Limitations

There is a limit in the number of rows a spreadsheet can store, meaning that organisations must eventually work over multiple files (creating more room for error). It was this precise problem that caused an issue with large numbers of COVID tests not being recorded and reported in England in 2020.

Still need convincing? A 2019 article by Oracle provides harrowing examples of how spreadsheets have made for some infamous, costly mistakes. The disclosed losses in the article total over 10 billion dollars!

Why is Excel bad for data analysis?

In addition to the points listed above, sharing an Excel spreadsheet is a highly tedious affair. Spreadsheets create ample opportunities for accidental data loss, which makes it impossible to share crucial data and information. Most importantly, the data sets can’t be shared in real-time, which happen to be a severe disadvantage.

Furthermore, when compared to the newer, advanced tools such as PowerBI, Qlik Sense, etc. spreadsheets are particularly poor for data visualisation and generating business insights.

The alternatives to Excel for large data sets: Which data toolset is right for you?

There are literally hundreds of data technology options now available to businesses, but identifying which one is right for you and your goals can be overwhelming.
What is so exciting now is that there will be an affordable option that fits for you, that will remove (or at least massively reduce) the risks and issues identified above with (mis)using Excel.

At The Data Lab, our TORCH Business Advisory Experts regularly encounter organisations struggling to move forward with their plans due to spreadsheet limitations. It’s their job to identify the factors holding businesses back and make unbiased recommendations and introductions accordingly.  Learn more in our TORCH Case Studies.

If you need help understanding the business intelligence solutions available; or if you’d like impartial support with a new data project, then why not email our friendly team – and let’s see if your problem can be solved with data. Contact TORCH.

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