We hear a lot about the power of new technology in various forms, from Blockchain to AI to Big Data. Whilst these are all different and with different goals, they share a clear message: the way we use information should be more sophisticated if you really want to succeed. In the finance world, we have seen the beginning of this with the adoption of more modern accounting systems which will contain some reporting functionality but are always going to be slightly compliance focused.
We have also seen to some extent the development of BI tools which, depending on how they are implemented, may look at more operational items, but these can be perceived as out of the reach of the smaller business. All of this means many businesses are still using Excel to report on various items or have data and visit multiple systems when reviewing business performance. There are a lot of reasons to use Excel; it’s incredibly flexible, many people will have some knowledge on it so it can be transferred and there are endless help forums for those that wish to learn. With that being said, there are also reasons not to use Excel for reporting.
Errors
Things always change in business and this normally means that your reports will need updating so that new items are captured, or new requirements are introduced. These updates are normally performed manually which means that mistakes can be made, especially as the person building it might not totally understand the reason behind the new requirement. As such, a spreadsheet is only as good as the individual that builds it and therefore, only they will have the intimate knowledge as to how it works. This can also be a risk to the business if this person decides to leave as they would be heavily reliant on their knowledge.
Also, if items are updated and then changes are needed upon review, this can lead to multiple spreadsheets and versions, possibly resulting in confusion and incorrect data being sent. It is best to have a single version of the truth and for Excel to provide this, it relies on clear methods and communication.
Data
Whilst Excel can store a large amount of data and has some similar properties to a database, it is not an actual database. As the world of BI moves forward, there is a desire for businesses to understand more and more about their performance across a wide range of metrics. Another challenging task might be to integrate various systems into Excel, not to mention that these links also need to be maintained.
If you are able to build these links, you can end up creating quite large data sets which are then manipulated via formulae to provide the required insights. All of this can lead to a large Excel file which can start to creak at the seams or run slowly if not built in a way that uses this information efficiently. These files will then start to crash as you use them, possibly losing work, or needing data to be archived which will result in hard typed information that could eventually become outdated and incorrect.
It is also true that achieving a higher level of functionality in Excel requires a high level of expertise when building in complicated items like drill-down functionality. This can be invaluable if upon seeing a number, you would like to interrogate it. That is if you can decrypt the complicated formula. The probability of having this knowledge in a smaller organisation are high which often means you would outsource to a provider. This can result in piecemeal charges for each excel update. A system will usually be a fixed price and developments are included in that price.
Security
Quite often Excel files are not protected via password or locked cells which means small manual adjustments can creep in, new versions not being saved or ultimately, the data could be extracted and placed somewhere else out of your domain. The good news is that the information will likely become outdated anyway but ultimately, it is difficult to control the security of your information in Excel. Also, as changes are made, you may have to continually turn certain security restrictions off and on again and this will require manual maintenance, lost time and mistakes.
When using a system, there are modern techniques to either encrypt or protect access to a system via dual authentication. You can also restrict access via certain roles within the application and restrict the ability to extract information. Also, when a user is removed, they no longer have access to that data so you can rest assured that someone who shouldn’t have your information is not using it to their benefit.
Excel can be very useful in certain situations, but as the world progresses, there are maybe more efficient and integrated solutions that better suit your needs. At 4PointZero, we work with businesses of all shapes and sizes to integrate systems, automate processes and produce insightful analytical reports. If you would like to know more about possible solutions that could increase efficiencies, lower costs and make your business more profitable, get in touch with us today at www.4pointzero.co.uk.
Frequently Asked Questions (FAQ)
What are the key benefits of using Excel alternatives for reporting?
Opting for alternatives to Excel in reporting offers advantages such as improved data visualization, enhanced collaboration, better automation, and specialized features for specific industries. These tools cater to modern reporting needs and often provide better integration with other software.
Is it possible to transition from Excel to reporting alternatives seamlessly?
Yes, transitioning from Excel to reporting alternatives can be smooth with proper planning. Many of these tools allow data import from Excel, making it easier to migrate existing reports. However, some adjustments might be necessary to make the most of the new tool’s features.
Why is Excel commonly used for reporting?
Excel is widely used for reporting due to its user-friendly interface, flexibility, and powerful data manipulation capabilities. It allows users to perform calculations, create pivot tables, and design custom charts, making it a versatile tool for generating insightful reports from diverse data sources.
Are there any limitations to Excel reporting?
While Excel is a powerful tool, it has limitations when handling large datasets, complex data relationships, and collaborative workflows. It may not offer the same level of data governance and security as specialized reporting tools designed for enterprise-level reporting.
How can I improve the accuracy of Excel reports?
To enhance the accuracy of Excel reports, ensure data integrity by validating input, cross-referencing data from multiple sources, and using built-in Excel functions to perform calculations. Regularly review and update formulas, and consider implementing data validation rules to prevent erroneous entries.
