Is Your Use of Excel Losing Your Business Money?
Anyone who has met me will know that I am a tad enthusiastic about data, and that I absolutely dislike the phrase “I have an Excel database”. Microsoft Excel is not, and never has been, a database! Don’t get me wrong, Microsoft Excel is incredibly easy to use, however it is also incredibly easy to make mistakes, it therefore should not be the main tool that is used to drive all business decisions.
Microsoft introduced Excel for Windows in November 1987, in 1993 it superseded Lotus 1-2-3 as the industry standard for spreadsheets. Over the next 20 years the software product introduced support for VBA (VisualBasic), the paper clip office assistant, clipboard to hold multiple objects at a time and continued improvement on graphics. It is then not surprising that businesses today use Excel.
However, businesses large and small store critical data, such as HR and payroll, in spreadsheets, embedding complex queries and macros to make them function like a database. According to a survey of 500 SME owners, conducted by Xero, 26% use Excel spreadsheets to manage their businesses. Gary Turner, CEO of Xero expressed that previous studies indicated that “88% of all spreadsheets also contain errors of some kind. This means that billions of pounds inside the UK economy are at risk because of a failure to embrace technology, potentially limiting the UK’s ability to sustain the current economic recovery”.
You and your staff are likely to be spending excessive time maintaining these spreadsheets each week. In fact this stance is supported by an infographic produced by SAGE, where it reported that 50% of UK SMEs waste between 30 minutes and 6 hours per week on spreadsheet issues like:
- Data input errors
- Maintaining version control
- Misuse of built-in functions
- Incorrectly copied formulas
- Failing to understand formulas
- Duplicating data on multiple spreadsheets
Yet from experience, individuals within business have a real reluctance to move away from Excel. Some of the reasons I have come across include “we do not need a database, we simply do not collect enough data!” or “everyone in the business knows how to use Excel”. The question has got to be, if you are collecting data in multiple spreadsheets, in disparate locations, can you really be confident that your business data is accurate, stored securely and not costing you additional staff time to maintain?
F1F9 commissioned a YouGov report into the use of Excel and found the following:
- 33% of large businesses report poor decision making due to spreadsheet problems.
- Spreadsheets are used in the preparation of British company accounts worth up to £1.9 trillion.
What is more alarming, is that the majority of staff within organisations today using Excel have received no formal training, and companies do not invest in Excel training. It is no wonder that there are significant number of errors contained within them. Below are some true horror stories…
Spreadsheet horror stories:
- JP Morgan Chase lost £1.3billion because of a spreadsheet cut and paste slip-up in 2013
- A George Osborne report showing that countries with public debt of 90% see their economies shrink by 0.1%, should in fact have shown growth by 2.2%. The cause: missing a few essential rows of data.
- London Olympic synchronised swimming tickets were oversold by 10,000 because of a simple typo!
- During the Barclays acquisition of Lehman Brothers, they ended up buying 179 contracts they did not want because of a reformatting issue!
At Databasix our view is that people and data are an organisation’s most valuable assets, and they should be treated as such. You cannot have high quality, robust data if your staff do not know what they are collecting and why, and more importantly have not been trained in how to gain the most insight from the business data you are harvesting. We suggest businesses consider the following:
- Reduce your reliance on Microsoft Excel, invest in alternative software solutions that meet your business need.
- Introduce quality assurance processes to reduce the risk of human error.
- Provide meaningful feedback to all users of the system, whether this is in the form of a report or through data visualisation.
- Most importantly, invest in staff training.