Why is Microsoft Excel still so heavily used in business and is it such a bad thing?
Big Data has become the buzzword of the past few years. An increasing number of businesses are finally seeing the value of data and utilise it to improve their internal processes, from customer and market research all the way to HR analytics. When it comes to data reporting and visualisation, MS Excel remains the king: according to Irish Tech News, the software is used by 750 million people worldwide. Surveys suggest that 20% of businesses use Excel spreadsheets as their main tool to report or communicate data internally and externally, but is this really keeping up with the times?
Why is Excel so popular?
First, let’s take a look at why MS Excel still rules businesses’ data communication efforts. Microsoft products have been around for quite some time, so most of us have been trained to use them, and reaching for MS Excel is just a matter of habit and convenience. The software also allows for quite easy data manipulation and organisation, and accessibility is a major selling point. The application can be installed virtually anywhere, as long as you have a license key. It’s clear that businesses still rely on MS Excel heavily, but as accessible as Microsoft’s solution might be, it’s far from the best option for companies. Here’s why:
The important data is hidden… or lost
The main problem with using MS Excel to report data is interpretation. A spreadsheet shows you all the raw data at once, and this abundance of information makes it incredibly hard to interpret what’s important and what’s not.
Visualisation might help to highlight the key aspects of a data set, but unlike other tools, MS Excel doesn’t allow you to create interactive visual dashboards. Excel’s visualisation tools are static, showing high-level trends only, and can provide a conclusion rather than serve as a starting point for exploration. The lack of dynamic insights makes it difficult for your team to understand what’s driving a particular trend. “Hidden” data isn’t the only disadvantage businesses should be concerned about. Spreadsheets, by nature, aren’t designed to store historical data. This means that to remain manageable, they’re updated on a regular basis. The result? Your company loses invaluable historical data.
Excel isn’t as accurate as you might think
But your business can still make use of Excel’s functionalities for data reporting, even if the presentation and visualisation of information are lacking, right? Well, a recent study by MarketWatch found that almost 90% of all spreadsheets contained errors: this number includes human errors, capacity limitations, as well as programming bugs. Even with data visualisation, using MS Excel’s functions to create pie charts, tables and graphs might be a problem as these distort the data.
Entering a single wrong number in one cell can wreak havoc on the entire data set and compromise any insights you might try to reach by looking at the data. This issue is particularly pronounced when it comes to analysing financial data and creating financial models and in turn, these often serve as the foundation of your company’s future strategy, so inaccuracy really shouldn’t be something you are willing to risk.
Still using Excel to compile financial reports or analyse business KPIs? You might be putting your company at risk: the inaccuracies, problems with data visualisation and analysis are already encouraging thousands of businesses to make the switch, so it might be time to reconsider the feasibility of MS Excel and look for a more reliable solution.