A 2010 paper – “Growth in a Time of Debt” – circulated by Harvard economists Carmen Reinhart and Kenneth Rogoff posited that once government indebtedness exceeded 90 percent of gross domestic product, economic growth drops off sharply. However, other economists could not reproduce the results with the same 90% tipping point. Several University of Massachusetts professors found a coding error in the authors’ Excel calculations that omitted several countries when forming averages over time, throwing the data out of whack.
Another recent report noted that 88% of all Excel spreadsheets contained some error. The inaccuracy problem has become so widespread that whole organizations – such as the European Spreadsheet Risks Interest Group – have been formed, dedicated to raising awareness of database and spreadsheet errors.
“Errors in spreadsheets are pandemic,” said Ray Panko, a professor at the University of Hawaii and an authority on bad spreadsheet practices. “Spreadsheets, even after careful development, contain errors in 1% or more of all formula cells. In large spreadsheets with thousands of formulas, there will be dozens of undetected errors.” Despite these common statistical inaccuracies, Excel remains the most popular sales analytics and reporting option for many smart businesses. Here are three lame excuses from companies still using Excel for sales reporting and analysis, as well as our counterpoints.
Excuse #1 – It’s familiar and affordable
Excel is the industry-standard, winning the spreadsheet market early on and continuing to dominate it. With its familiarity, companies choose not to go out and purchase a new database or reporting program. This sort of familiarity has created an Excel culture among generations of computer users, many of whom have grown up knowing nothing but Excel in their lives. Excel is not just a tool – it has evolved into a culture.
Counterpoint: You know what was once the industry-standard? Fax machines. You’d be hard-pressed to find any company regularly using them today. Implementing a new tool is a lot easier than developing a new culture, but the most successful companies today are ones that embrace a counterculture. Challenge your employees to think outside the box, push their boundaries and find alternatives that provide a host of powerful new capabilities in sales analytics and reporting. As far as costs, companies are typically wary of expensive legacy Business Intelligence solutions. However, the spreadsheet world has changed dramatically. We now live in a world with millions of apps, app stores, app exchanges and Software-as-a-Service products. The world of desktop PC apps for business use is being superseded, with many affordable alternatives available.
Excuse #2 – It’s easy to learn
For the most part, Excel is fairly intuitive. Users can simply fire up the program, open up a new document, define their header columns, and enter data and formulae to their heart’s content. If they are unsatisfied with these basic intuitive features, users can turn to the wealth of Excel resources available. Many libraries offer classes, there are hundreds of Excel For Dummies-type books available and, of course, many Excel users are ultimately self-taught, through a process of trial-and-error.
Counterpoint: Excel, like chess, is easy to learn but extremely difficult to master. It’s true that Excel users can basically begin operating from the get-go. Unfortunately, many of these features are surface-level, barely scratching the true analytical power of having all that sales data. To delve further, Sales VPs must spend their time taking classes or reading complicated tomes to teach themselves, through a process of trial-and-error that is potentially dangerous. Some errors are not worth the trial process – an inaccurate forecast or faulty pipeline analysis caused by Excel could have serious repercussions for your business. Additionally, sales reports cannot be intuitively built within Excel, requiring a time-consuming export-and-adjust process or a more advanced third-party report builder.
Excuse #3 – It’s versatile and convenient
Excel is often used as more than just a database. Some users rely on it to run complicated calculations. Others run financial, accounting or sales reports on it. Many users leverage the graphs and charts on Excel to deliver professional-looking presentations. Additionally, many users like the fact that they can keep practically all their information in one place. Excel is often used as a spreadsheet, an information organizer and a formula-running calculator at the same time. Most users don’t have the time to move data around and into new storage systems, or are afraid of losing their historical data.
Counterpoint: Versatile can also be read as “okay at a bunch of things, not great at any.” One aspect that this versatility is hamstrung by is the fact that there is a lack of portability between Excel users. Reporting transitions are difficult to accomplish, and there is typically very little consistency between spreadsheets produced by different employees. It can be difficult to understand the logic of a spreadsheet created by someone else. Many presentations are often wrongly done on Excel when other better presentation options exist – partly due to the difficulty in moving or copy/pasting data from one source to another. Finally, a lack of portability from one user to another makes reporting and collaborative discussions difficult, as a lot can be lost in translation. These drawbacks eliminate much of the versatility and convenience. We laid out our case, point by point. Why have you stuck with Excel? Did we miss something? Let us know what you think in the comments below.