The spreadsheet… Perhaps the most prolific office tool since the dawn of electronic admin. It has a plethora of uses, can collate data in an easy-to-consume format and is versatile enough to still be in use after decades. Sometimes, however, it’s time to recognize when a ship needs to sail. As the future marches ever on, is it time to upgrade, kick spreadsheets to the wind and look for better tech?
The spreadsheet: not so useful
When business leaders want to leverage data for better and more strategic decision-making, it’s common for analysts to bypass IT and reach for their favorite spreadsheet. Spreadsheets are often the tool of choice to store, manage, analyze, arrange and present information for financial planning, data analysis, compliance and whatever else you might want; they’re just that versatile.
Ironically, for many business processes that involve managing data, spreadsheets can actually create the exact opposite effect – inefficiency. Unfortunately, due to the nature of spreadsheets storing organizational data in a readily sharable way, there is a high risk of exposing confidential information.
Many organizations manage multiple cloud and legacy back-office systems, making spreadsheets the lowest common denominator for executing on cross-functional data, analytics and performance management requirements across heterogeneous systems.
Why spreadsheets are so popular
At the most basic level, spreadsheets provide a great deal of user control – right down to the single-cell level. For example, spreadsheets have become a finance professional’s go-to application because of their ease of use, and because spreadsheets give the user a sense of control and ownership. When fewer people are involved, a user can easily collaborate through a simple email without worrying about the receiver not having the tools, skills or training to consume the information.
For these reasons, spreadsheets are here to stay, with many software tools seamlessly connecting to Excel in various ways that keep users happy. To minimize spreadsheet risk, however, a modern data and analytics architecture must provide the foundation for data integrity and efficiency, while offering the flexibility for spreadsheets to be an optional front-end interface to trusted data.
Why spreadsheets hurt organizations
Hidden within spreadsheets is an inherent risk and cost – formulas not repopulating correctly, “copy and paste” and merging records not done correctly, information hidden behind formatting, coworkers using different versions of a saved spreadsheet and other, seemingly benign, actions that create errors, wasted time and low data quality. Business decisions based on inaccurate data could negatively impact productivity, revenue, reputation, compliance and brand.
When handling money in a spreadsheet, a simple error can cost thousands, if not millions, of dollars. A misplaced decimal point, typing the wrong number, adding an extra zero – these human errors have wide-reaching effects and are, unfortunately, extremely common.
The situation is made worse since it’s impossible to securely encrypt confidential information in a spreadsheet, leaving critical financial information in danger and untraceable. Even password-protected spreadsheets can be hacked in a matter of minutes by a tech-savvy criminal. On top of that, storing information on employee computers means that you might lose data if the computer crashes; the more endpoints there are in a system can potentially exacerbate a cyber attack.
Common spreadsheet-driven processes that a modern cloud solution can replace
As part of their digital transformation efforts, organizations need to capture the value of replacing spreadsheet-driven processes with a modern data and analytics architecture. Adopting modern applications with automation improves access to information in real time. When applied to financial processes such as accounting, budgeting and forecasting, organizations can be more confident that information is accurate, up-to-date and consistent.
Here are the most prolific and important business processes that a modern data and analytics architecture automates and delivers more value, compared with spreadsheet-driven processes:
Budgeting and planning
Using spreadsheets for budgeting and planning across multiple departments and locations can lead to chaos, loss of control and security risks, but modern data and analytics tools offer a solution by centralizing and streamlining the process while maintaining spreadsheet flexibility and privacy.
Financial consolidation
Organizations often struggle with financial consolidation and reporting using spreadsheets, especially as they grow and acquire other entities. Modern data and analytics tools, however, simplify the process, ensuring accurate and efficient consolidation, reporting and compliance with various accounting standards, while also providing flexibility through spreadsheet interfaces.
Business intelligence and analytics
Organizations often face challenges with spreadsheets when IT controls data extraction and analysis, leading to outdated and inconsistent information. Modern analytics platforms with machine learning automation enable faster, more accurate reporting and analysis, empowering business users to make data-driven decisions without IT involvement.
Open and easy communication
Using spreadsheet-based approaches for sharing data with customers and suppliers can be manual and error-prone, hindering collaboration and real-time decision-making. Cutting-edge data and analytics solutions, with embedded APIs, enable organizations to provide direct access to real-time information, enhance collaboration and offer value-added services to foster loyalty and growth.
Auditing and controls
Organizations, particularly those undergoing mergers and acquisitions, often rely on manual spreadsheet-based processes for monitoring access and financial controls, which can be costly, error-prone, and lead to compliance issues. Some of the more modern data and analytics architectures provide out-of-the-box risk and compliance software to streamline audits, enhance control monitoring and improve operational efficiency.
Saying so long to spreadsheet silos and hello to modern data and analytics
Replacing spreadsheet-based processes with modern data and analytics architecture can save time and money, reduce risk and reallocate resources to higher-value activities, aligning better with your business priorities. The tech upgrade and transition enhances accessibility to information across the company, promoting innovation and insights while pushing towards automation in the face of digital transformation.
