Don’t run your business on Excel
Excel is incredibly popular, and with good reason: it’s cheap, it’s useful, and it’s easy to use. You still shouldn’t run your business with it.
Because some colossal blunders have been due to Excel:
- JP Morgan lost $6Bn(!).
- A UK government organization massively overrated the economic outlook.
- Barclays spent millions on worthless contracts.
- 16,000 positive COVID tests were lost.
These mistakes were due to manual errors in large organizations. But the same mistakes happen in mid-market business as well. Or a mid-market business will get stuck in a kind of Excel circular reference — over time, simple spreadsheet solutions become gradually more complicated and time-consuming, demanding more and more manual fixes, creating bottlenecks that inhibit efficiency and growth.
It’s also dangerous:
- Excel is easy to change. This allows for continuous tinkering. And it can be very difficult to assess the impact of changes and to identify errors.
- Excel files are a cybersecurity risk. People send them via email or put them on shared drives, which is a recipe for data theft and confusion.
- Excel is a dead-end. There is no way to formalize an Excel process into a more managed system with proper controls, an audit trail, security, data management, and error-checking. Nor is Excel a sound basis for automation or integration. Good systems go hand-in-hand with good processes, and Excel encourages neither.
See also our ERP and integration knowledge center for more on smoothing out systems and processes
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.
So how does a mid-market business avoid an over-dependence on Excel?
- Use Excel only 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.
- 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 $150k per month.” Or: ‘We always ring alarm-bells when someone starts using Excel’s built-in coding platform’.
- 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 your downfall
If your company needs help replacing Excel with an affordable integrated system, we have a lot of experience helping mid-market businesses streamline their systems, and we’re always up for an informal chat.