The Time to Stop Relying on Spreadsheets Has Arrived

February 26, 2019Homefield IT

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Microsoft Excel is used for a wide variety of tasks, from visualizing business data, to tracking work expenses and managing books. But in the age of cloud-empowered productivity and pervasive mobile devices, is the humble spreadsheet keeping pace? While many accountants still seem to enjoy using them, there’s a huge number of tasks that spreadsheets are ill-suited for, like business reporting and project management. Let’s take a closer look at how spreadsheets may be hurting your business, and why custom software that’s powered by a robust database is usually the better solution.

Spreadsheets are Highly Error-Prone

Have you heard of “dueling spreadsheets”? It’s a term that describes when two different versions of the same spreadsheet contain conflicting data. This is an unfortunately common scenario that can arise in a few different ways.

The most common is when spreadsheets aren’t being stored in a centralized location. If one employee downloads a spreadsheet that contains today’s data, but the next day another employee downloads a copy with tomorrow’s data, then a conflict between these two datasets is likely. The problem of dueling spreadsheets is also common when people add or delete information to a single spreadsheet then share it with others via email or cloud file-sharing systems. Which version is which? It’s hard to know.

Because spreadsheets were not built with the security or integrity of data in mind, and offer no reliable way to audit changes, the problem of errors is extremely common. According to MarketWatch, as many as 88% of spreadsheets contain an error, a problem that’s grown so severe; it’s even led to the formation of an organization specifically to address the issue of spreadsheet mistakes.

Spreadsheets Waste Time

According to a report by research and advisory firm Ventata, 44% of businesses struggle with managing their spreadsheets. Their research found that the average employee spends 12 hours a month looking for and correcting errors in spreadsheets. You can read more about that in their blog post here.

In some situations, that 12 hours a month might even be low. Microsoft Excel is not just spreadsheet software, it is, in fact, a Turing complete programming language. If your employees are not experienced Excel users, then the time required to check Excel files for problems could be even greater. Compare these wasted staff-hours with the return of customized software, which provides increased benefits as your company scales, and the problem of spreadsheet error only intensifies.

Spreadsheets Can Lead to Catastrophe

Big businesses have lost enormous amounts of money because of mishandled spreadsheets. Take for example the 6 billion-dollar loss that JP Morgan Chase incurred during the “London Whale” incident, which experts attribute in part to the improper use of spreadsheets. There are many examples of poor Excel usage leading directly to financial losses, such as this 24-million dollar cut and paste error at Canadian power company TransAlta, as well as others.

According to the white paper, Capitalism’s Dirty Little Secret, by global financial modeling and forecasting company F1F9, 1 in 5 businesses have lost money because of spreadsheets. Any loss due to spreadsheet errors, even the relatively small ones that occur at SMBs, should be considered unnecessary and could easily have been avoided with custom software.

Custom Business Software Addresses All the Shortcomings of Spreadsheets

There’s evidence that shows as a business grows, it becomes more susceptible to financial losses due to spreadsheet errors. Instead of relying on spreadsheets, with all their inefficiencies and pitfalls, growing businesses must look to custom software and database solutions to provide the reliability and efficiency they need to scale. Let’s look at some of the most important benefits custom software can provide.

1 – Purpose-Built for the Future of Your Business
Software that’s specifically designed to improve the operations at your company does so much better than any off-the-shelf product can. Custom software not only responds to the workflows and business rules of your team, it also simplifies your employee training programs by reducing the number of applications your employees need to learn. These are key points that Excel lacks. Don’t adjust your company workflows or personal habits to suit your software — it should be the other way around.

2 – Empowered Data Discovery
The future of productivity points toward deeper integration between data from mobile, IoT, and cloud applications. Unlike Excel, which requires a great deal of skill to use, and doesn’t provide the power most businesses need, custom software sitting atop a database that’s tailored to your requirements can help tie all those sources together and provide a strong foundation for artificial intelligence and analytics.

3 – Security and Compliance Controls
Excel spreadsheets lack stringent access controls, so once your data is exported to Excel, it’s much harder to ensure proper security. The security weaknesses in spreadsheets can have important compliance ramifications for companies in regulated industries, such as finance or healthcare. In comparison, custom software can be built to meet even the strictest security requirement, ensuring seamless integration with your existing network and compliance controls.

4 – Custom Software is Cost Effective
Mentioning customized software makes people instantly think of expensive enterprise solutions that are available to only the largest businesses, but this is far from reality. Today, custom software solutions are readily available to SMBs and often provide cost savings over per-license commercial software. The software development division of Manhattan Tech Support, Exceed Digital, has developed an innovative payment model that allows companies to purchase software on a monthly subscription basis. Would you like to know more?

NYC’s Custom Software Development Partner

Manhattan Tech Support doesn’t just manage the IT and network infrastructure of businesses throughout greater NYC, we also provide world-class software and database development services to businesses throughout the United States.

If you want to streamline the flow of data through your company and empower your team with better, more intuitive software, we encourage you to call us at 212-299-7673. We’re always available to help businesses better understand the software development process, and provide them with the expertise they need to make the transition to custom software a success. We look forward to speaking with you!

See more:

Kaytuso – cybersecurity & regulatory compliance division of ManhattanTechSupport.com LLC.

Exceed Digital – custom software development and business intelligence solutions division of ManhattanTechSupport.com LLC