The Problem with Spreadsheets

It is amazing to consider how the number of companies that are reliant on spreadsheets to run their organization. Too many businesses have become dependent on spreadsheets to manage key business processes including contracting, payment calculations, inventory, sales, data management, and invoicing.

Companies very often feel as though they don’t have much of a choice but to use spreadsheets. Often, organizations need to use something to manage their business operations, but their existing system is unable to handle the operations they need it to do. The fact that organizations have needs beyond what spreadsheets have to offer is not terribly surprising as many businesses are surprisingly unique and have very specific requirements.

Now, that being said, spreadsheets certainly have their place. They are terrific for the storage of small data sets, the creation of simple models, and the formatting charts and graphs. However, companies may not be aware of the major challenges they face in their dependence upon on Excel…

Top five disadvantages to using spreadsheets to run your business

Reporting

Spreadsheets lack the ability to allow you to view data across multiple spreadsheets. Sorting through these multiple spreadsheets and countless numbers to compile the data can be confusing, not to mention time consuming. It is a real struggle to provide meaningful reporting without being able to combine and make sense out of the data you need. Ultimately, it is difficult to run a business successfully without full control of your data. This is particularly true of companies who must adhere to state and or federal compliance regulations.

Fraud

Fraudulent manipulations in Excel files have already resulted in Million-Dollar losses. The primary underlying reason behind spreadsheet vulnerability is the inherent lack of controls. This makes it incredibly easy to alter formulas, values, or dependencies without being detected.

Human Error

While fraud will always be a threat to spreadsheets, there is a more significant threat that should make you seriously consider getting rid of these outdated systems. That is, their its extreme susceptibility to even trivial human errors.

Missed negative signs and misaligned rows may sound harmless, but those errors can damage investor confidence or cause a considerable loss of opportunity amounting to billions of dollars.

Difficult to Troubleshoot

What about testing spreadsheets to mitigate the risk of human error? Spreadsheets just are just not built for that. It is common to have interrelated spreadsheet data scattered across different folders, workstations, offices, or even geographical locations. Even if you are able track down the locations of every related file, tracing the logic of formulas from one related cell to another can take forever.

Scaling

As an organization grows, data in spreadsheet-based systems get more distributed throughout the company and, subsequently, compound the issues outlined above.

For more information on custom-based solutions built uniquely for your business, fill out the contact form below or visit the Treehouse Technology Group website and check out their recent case-study.

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