Errors in Excel are more likely than you think
According to F1F9, approximately 88% of spreadsheets contain significant errors, while in large companies, 50% of these spreadsheets also contain incorrect data. The problem doubles when minor errors can easily lead to catastrophic decisions, for example those that occurred in JP Morgan, where one error in Excel caused a total loss of $ 6 billion due to the interdependence of sheets.
90% of CEOs experience similar 13 problems using Excel
For the last two years, conducting analytical projects in dozens of companies, we found that 90% of the CEO has always experienced similar problems using Excel 13. According to the leading technological CIO portal, Toyota eliminated Excel’s problems and cut shipping costs twice, resulting in savings of up to USD 820,000 with the help of Business Intelligence tools.
Let’s get acquainted with these problems.
1. Lack of clear knowledge about the condition of the organization
Each managing person wants to learn about the condition of his organization in a few minutes. This is what the KPI (Key Performance Indicators) are for. For this reason Excel is not intended for storing historical data. It’s impossible in excel to calculate the main KPI’s, such as comparison of sales year to year, month to month, growth rate divided into products, etc.
2. The information is presented in an unreadable manner
Often a CEO or CFO should present company results to shareholders or board members. All numbers can not be easily transferred from Excel to the presentation, so usually the results are presented directly in Excel, which is not the best tool for this. Reports often look disorderly and a large amount of information causes that they are completely unreadable.
3. The data is not properly secured
Excel secures the sheets with the password so people can either see the whole document or it is completely blocked for them. This is not a good solution in situations where users require different degrees of access, such as read permissions or the ability to edit. In addition, because Excel has no way of knowing who is accessing the spreadsheet, all you need to do is pass your password into the wrong hands and your data will be hacked or stolen.
4. It takes too long to search for important information
Because you see all the data at once, it is difficult to understand what is important and what is not. You can use visualizations to highlight the most important results, but they do not look great in spreadsheets and each graph only applies to a specific data slice. For this reason, your team is very difficult to identify how these data relate to their daily work.
See how other companies have solved problems 1-4 using Business Intelligence
by clicking on the sales analysis dashboard below.
5. Insights may be incorrect
Excele can be difficult to analyze. What’s worse, a large amount of presented data may lead to misinterpretation and your team may make bad choices or take wrong actions based on this misinterpretation. In addition, people who only know about excel usually make graphs that often distort data, including pie charts and 3D charts.
6. Lack of the possibility of analyzing historical data
Spreadsheets are not designed to store historical data, they are usually only updated. That’s why companies are losing historical data. That makes difficult to see trends in time, compare data in longer time horizons, and predict what will happen in the future.
7. The data in Excel may contain errors
Analysts in the company spend a lot of time to prepare an executive board report in Excel. The preparation mainly looks like that every time the analyst should manually make changes because the reports in Excel are not completely automated. That may cause some results to be calculated incorrectly and this in turn exposes the manager to making wrong decisions based on incorrect data.
8. Sales forecasts are not precise
To be able to better plan the budget, expenses and costs, you should forecast the future very precisely. Nowadays, machine learning models give the best effectiveness of forecasting, which on the basis of history and many other factors generate high-quality forecasts. Excel is not the best tool for this type of prediction due to the fact that it is not specialized for that. It’s better to use programming languages R, and Python for that.
See how other companies have solved 5-8 problems using Business Intelligence
by clicking on the sales forecasting dashboard below.
9. It’s difficult to control expenses
Expenses are not always collected inside the company. A large part may be located in other systems, for example: Google analytics, CRM, TPS (Transaction Processing Systems) and other systems. Excel is not integrated with them, which means that someone should manually paste newly downloaded data into already standardized spreadsheets. If there is a need to track expenses from day to day, it requires daily downloading and pasting of these data, which is not a rational use of employees’ time and additionally increases the risk of data errors.
10. It’s difficult to share information
It’s difficult to share a spreadsheet with multiple team members. In addition, due to the possibility of accidental deletion or change of data, the spreadsheet is rarely provided with real-time updated data. In the best case, it can be sent by e-mail once a week – which creates a problem with the loss of historical information in the mailboxes.
11. Lack of clear knowledge about customer feedback
Social media has completely changed the way consumers communicate. Excel does not allow you to download and visualize data comments from social networks in which included opinions about your products or services. Without analyzing this data, you are not able to take care of the brand’s image, keep existing customers and adjust products to their needs.
See how other companies have solved 9-11 problems using Business Intelligence
by clicking on the marketing expenses analysis below.
12. You do not know exactly combination of products or services sell best
Without knowing the baskets of customers you are not able to match your offer and as a result increase sales. Advanced analytics is used for this type of analysis, which is not cortical functionality of Excel if you want to analyze these results in a quick and easy way. For this reason you are not able to analyze all possible strategies for selling products and precisely match your offer.
13. Many people do not analyze the sent Excel
Excel has a bad reputation, especially among employees who do not use it often. Therefore, by sharing important information from the beginning you eliminate a large part of your recipients. Some people will not even open an Excel attachment in an e-mail, let alone an analysis to draw conclusions.