Errors and problems while using 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. Problems with Excel double when minor errors can easily lead to catastrophic decisions, for example like the one 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 problems using Excel
For the last two years, while conducting analytical projects in dozens of companies, we found out that 90% of the CEOs have experienced similar problems using Excel 13.
According to the leading technological portal CIO, Toyota eliminated problems with Excel and cut shipping costs twice, resulting in savings of up to USD 820,000 with the help of Business Intelligence tools.
Let’s move on to these issues.
List of most common problems while using Excel
1. Lack of clear knowledge about the condition of the organization
Every manager wants to learn about the condition of their organization without wasting too much time. This is what the KPI (Key Performance Indicators) are for.
The fact is, that Excel is not intended for storing historical data. In Excel, it’s impossible 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 – one of the most common problems with using Excel
Often a CEO or CFO has to present company results to shareholders or board members. Unfortunately, all numbers cannot 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 them to be completely unreadable.
3. The data is not properly secured
Excel secures the sheets with the password and as result, people can either see the whole document or it is completely blocked for them. This is not an effective solution in situations when users require different degrees of access, such as reading or editing.
Also, since Excel has no way of knowing who is accessing the spreadsheet, all you have to do is hand over the password into the wrong hands and your data will be hacked or stolen.
If you find this topic interesting, try reading Business Intelligence Product: Which one to pick for your team?
4. It takes too long to search for important information
Since you can see all the data at once, it’s hard to understand what’s important and what’s not. You can use visualization to highlight the most important results, but they don’t look good in spreadsheets, and each chart only applies to a specific slice of data.
For this reason, it is very difficult for your team to determine how this data relates to their daily work.
See how other companies have solved these problems (1-4) using Business Intelligence technology by clicking on the sales analysis dashboard below.
5. Insights might be incorrect
Excel might not be the best tool to run the analysis. Often, the large amount of data presented can lead to misinterpretations and your team can make the wrong choices or take wrong actions based on these misinterpretations. Also, people who only know about Excel tend to create charts that often distort the data, including pie charts and three-dimensional charts.
6. Historical data cannot be analyzed
Spreadsheets are not meant to store historical data, they are usually only updated. Therefore, companies are losing historical data. This makes it difficult to observe trends over time, compare data over longer time horizons and predict what will happen in the future.
7. Problems with data while using Excel – it may contain errors
The analysts in the company spend a lot of time preparing an executive board report in Excel. The preparation has such form that the analyst needs to make changes manually every time because of the problems with reports made using Excel – they are not completely automated.
This can cause some results to be incorrectly calculated, which in turn exposes the manager to making wrong decisions based on incorrect data.
8. Sales forecasts are not precise
In order to be able to better plan your budget, expenses and costs, you must very precisely forecast the future. The most accurate forecasts these days are provided by machine learning models that generate high-quality forecasts based on history and many other factors. Excel is not the best tool for running this type of forecast because it is not specialized for that. It would be more efficient to use the R and Python programming languages.
9. It is difficult to control expenses
The expenses are not always collected within the company. A large part may be located in other systems, for example, Google Analytics, CRM, TPS (Transaction Processing Systems), etc. Excel is not integrated with these systems, which means that someone needs to manually paste the newly downloaded data into already standardized spreadsheets.
If you need to track expenses on a daily basis, it requires daily downloading and pasting of this data, which is not a rational use of employees’ time and additionally increases the risk of data errors.
Unfortunately, problems with using Excel do not end here.
10. It is difficult to share information
Excel makes it difficult to share a spreadsheet with multiple team members. In addition, due to the possibility of accidental deletion or alteration of data, a spreadsheet rarely has real-time updated data. At best, it can be emailed once a week – which creates a problem with the loss of historical information in mailboxes.
11. No clear knowledge of customer feedback
Social media has completely changed the way consumers communicate. Unfortunately, Excel does not allow you to download and visualize data coming from comments from social networks which include opinions about your products or services. Without analyzing this data, you are not able to fully take care of the brand’s image, keep existing customers and adjust products to their needs.
12. You don’t know exactly what combination of products or services sells best
Another problem that you can experience while using Excel is related to what you know about your customers. If you do not know your customers’ baskets, you will not be able to adjust your offer, and thus increase your sales. Advanced analytics is used for this type of analysis, which is not Excel’s cortical functionality if you want to analyze these results quickly and easily. For this reason, you are not able to analyze all possible product sales strategies and precisely match your offer.
Would you like to increase the customer retention rate in your organization? Read this article – Best Client Retention Strategies – How To Prevent Customer Churn.
13. Many people do not analyze the sent Excel
Excel has a bad reputation, especially among employees who don’t use it often. Therefore, by sharing important information from the very beginning, you eliminate a large part of your audience. Some people won’t even open the Excel attachment in the email, let alone the analysis to draw conclusions.