Does Your Business Run on Excel? Undo!

For Americans, this may seem like a distant footnote. But bear with me.

One of the UK’s leading health agencies, Public Health England (PHE), has revealed a massive under-reporting of covid-19 cases due to an Excel blunder. The truth is that many mid-market businesses are too dependent on Excel. We’ve all become stuck in an Excel circular reference. The challenge is how to escape.

Excel has become ubiquitous for a reason. It is extremely simple to start and amazing what you can do quickly. But for some mid-market businesses, Excel has become an unplanned core back-office system. It is often the link between systems and processes; it is sometimes used to store critical data; and it is often used to present and explore data throughout the business.

Finance people can’t get enough of it. The rest of us can’t remember all its functions, but we still use it anyway.

But why is it dangerous?

1. Excel is fundamentally unstructured and easy to change. This makes it incredibly convenient. But it also allows for unending tinkering. And it can be very difficult to assess the impact of changes and to identify errors.
2. Excel files, passed between people by email, or shared in folders (or worse on USB drives!) are a recipe for error, confusion and unauthorized access. Good systems go hand-in-hand with good processes, and Excel encourages neither.
3. Excel is a dead-end. There is no “pathway” to formalize an Excel process into a more managed system with proper controls, an audit trail, security, data management and error-checking. Excel is not a sound basis for automation or integration.

In the meantime, see our ERP and Integration Knowledge Center for more on smoothing out systems and processes

In short, Excel can lead a mid-market business to the point where it is very difficult to scale and where the business is exposed to fraud or blunders like PHE’s. But since it works most of the time, and the cost of replacement looks high, the easiest thing is just to carry on with it.

But the bottom line is that to run a business well you need integrated systems that support efficient, agile processes, and deliver useful management information to enable decision making. You won’t get all that with Excel.

Your company’s systems strategy should have some principles to avoid an overdependence on Excel. What might they be?

1. Use Excel—when it’s appropriate. For example, new ideas, new opportunities, or an informal look at data. Use Excel as a personal tool for tackling problems.
2. Establish your business’s timeframe or scale-of-use for Excel. For example, “We won’t use Excel to manage this project for more than nine months.” Or: “It wouldn’t make sense to run a new business line on Excel once revenue exceeds $100k per month.” Or: ‘We always ring alarm-bells when someone starts using Excel’s built-in coding platform’.
3. Here’s the tricky part: you need an integrated set of systems and processes that can smoothly replace Excel when the time comes.

Excel is an amazing product; it is ubiquitous for a reason. But its convenience can be its downfall—or yours. Like all powerful tools, handle it with care!

If your company needs help replacing Excel with an affordable integrated system, get in touch. We have a lot of experience helping mid-market businesses streamline their systems, and we’re always up for an informal chat.