When the spreadsheet first arrived, it helped transform the way business was carried out, saving companies time, money and headspace. As the business world has evolved, so have the tools needed to efficiently run a business. While it might be a familiar window on every office desktop, spreadsheets are no longer the must have tool for your business. Saying that, old habits are hard to shake, and the familiarity of spreadsheets can outweigh the benefits of switching to new tools that seem daunting and overwhelming. However, alarm bells should start ringing in the ears of all decision makers when they realise that spreadsheets can do more harm than good.
Efrat Nakibly, VP Marketing & Strategy, Priority Software, looks at 4 ways spreadsheets can hold your business back:
1 – Spreadsheets are the Nokia 3310 of the business world
There once was a time when spreadsheets would have been a time-saving, efficient way to manage your business. Compared to running your business with pieces of paper, ring binder files, and calculators, spreadsheets are a big step forward. But the great thing about technology is it keeps on developing, and spreadsheets are no longer the crème de la crème of business software solutions. Yet people still have a soft spot for spreadsheets, probably because they’re familiar and easy to use.
For small businesses who don’t have a dedicated IT team, upgrading to a more sophisticated business management solution might seem like a daunting task. However, there are now a range of affordable, easy to use, tools available for businesses of all sizes. These include enterprise resource planning software (ERP), CRM, and financial management software. So, there’s no longer any need to assume spreadsheets are the only way you can run your business.
2 –Spreadsheets: a breeding ground for mistakes
Spreadsheets are by their nature, risky. One wrong decimal place or a cut-and-paste mistake (however unintentional) can go unnoticed for a long period of time, until it eventually causes havoc to formulas and results throughout the entire document. Depending on the amount of data contained in the spreadsheet, identifying where the original error was made is like hunting for a needle in a haystack.
Not only is this annoying, but it also takes time to correct and hampers productivity. Time is money, so when employees are spending unnecessary hours manually updating spreadsheets and correcting errors, they’re also costing your business. Freeing employees from spreadsheets will allow them to focus on higher value tasks.
At worst, a mistake in a spreadsheet that’s used for recording transactions, can also have serious financial implications on a company that aren’t realised or rectified until it’s too late. Thankfully, there are now a range of financial management tools available for businesses of all sizes, such as accounting software and invoicing software.
3 – Insecure and costly
Mistakes aren’t the only way spreadsheets can have financial implications on your company. Spreadsheets are notoriously insecure documents. They can be copied, shared and accessed easily, which can compromise confidential data. The easiest way of protecting a spreadsheet is to add a password.
However, the creator needs to share the password for each spreadsheet with each user, which is an onerous and insecure task. Further, with multiple spreadsheets come multiple passwords, which can be difficult to track. If the password then needs to be changed for any reason (an employee leaves the company), the problem is compounded. Even if you’re the sole user accessing a password protected spreadsheets, there are simple password crackers available for Excel, which would break the protection.
By adopting more sophisticated tools, such as ERP software, business leaders will have greater confidence in the security of information. With GDPR regulations coming into force, it’s more important than ever that companies of all sizes aren’t at risk of sharing customer data or breaches.
4 – When it comes to forecasting, spreadsheets can be as unreliable than the weather
If all the formulas are correct, spreadsheets are great at giving a snapshot of data. However, while Excel contains sophisticated modelling techniques including pivot tables it delivers a single view of the data, even if updated automatically. This means that spreadsheets often have multiple tabs with different views of the data, each crated manually, and often still not the perfect view.
At the other end of the spectrum, it’s also not always easy to find data for a specific sub-section of your business. Because of this, it can be hard to predict where your company is going, what’s holding it back, and what’s propelling it forward. In turn, this can make it hard to steer your business in the right direction. With market analysis becoming increasingly important, it’s vital that businesses are equipped with the right business analytics software to make informed business decisions.
Spreadsheets aren’t going to disappear overnight, but they’re no longer the must have tool for businesses. The cracks are showing, and they’ll only get wider as technology advances and business models change. In the changing and evolving business world spreadsheets are no longer the right tool for the job. Cloud based software enable business leaders to better run organisations through improved insights, with less risk and a lower total cost of ownership. And with so many alternatives available on the market, businesses still clinging on to the familiar spreadsheet need to jump ship if they want to remain competitive in the digital age.
Priority Software empowers businesses of all sizes by providing the most comprehensive, flexible and affordable ERP solution on the market. Founded in 1986 with the mission of making ERP easier, today, Priority‘s business software solutions and robust technology platforms deliver flexible, scaleable and highly intuitive ERP solutions. Our customer roster boasts over 8,700 companies across a wide range of industries in 40 countries who rely on Priority to manage and grow their business.