Let’s be honest, most of us are creatures of habit in many aspects of our lives. When it comes to spreadsheets and dashboards, we are no different: each of us has our own go-to tools where we feel competent and comfortable. Excel has been around for over 30 years and remains the largest spreadsheet software in the world. It is not surprising that it takes a lot of effort and courage to explore other avenues of database and spreadsheet management.
If we can define the main reasons why we use excel, we may be able to answer if we are ready to explore alternative options. Some of the more popular motives for using excel are tool familiarity, quick learning curve, accessibility, and affordability. The possibilities seem limitless: we can use excel as a database system, statistical analysis helper, visualization tool; we can create calorie tracking, bill reconciliation, weekend dating logs, and my favorite Tetris game below all in the same tool. How great is that!! Or is it?
In my opinion, excel works fantastically for simple spreadsheets that do not require a lot of collaboration or data manipulation. Creating simple graphs for a presentation or general performance dashboard where data volume is insignificant will work like a charm.
When it comes to visualizing data, maintaining security, creating interactive dashboards, or managing large and complex data sets, we may come encounter a few problems.
Time to Go
According to a MarketWatch study, almost 90% of all excel spreadsheets contains errors. That is a lot of bad data out there, with close to 1 billion active Office users (according to Microsoft) clicking along and spreading a wealth of erroneous information. Major corporations are not immune to these spreadsheet problems, either. Recently, JP Morgan Bank announced that they have lost around $6 billion dollars based on errors on the excel spreadsheet finance model made to capture market risk…
Excel has very few safeguards for data governance or data quality. If data is being shared or advanced computation complexity is required, many potential breakdown points can be exposed. Also, code review is difficult and unreliable often with copy-and-paste programming.
Size is also a consideration. As my own rule of thumb, I don’t like working in excel if my data exceeds 100 thousand rows. Any logic or formula changes will bring this software to its knees. If you see this message below appearing on your screen more than once a month, it is time to look for alternative solutions. You are overpowering excel processing capacities. Show off…
Excel is definitely not a good database solution, either. First, you cannot easily connect multiple tables that can easily be achieved within any database solution. Secondly, workflow is not well defined and has to be linear–any extra complexity is not recommended. Lastly, data security is simply not up to par, even protected worksheets can be unlocked fairly easily by a number of programs or tips readily available for anyone with internet access.
When it comes to data computation and statistical analysis, I would go with an R, SAS, SPSS or a similar tool. It allows for an easier automation, much faster calculations and advanced statistical capabilities. Ability to use the code and reproduce the results consistently is a huge advantage. Excel works great with small scale models and it allows you to learn your data in every step of algorithm process from input to output. But like everything else in life, you grow up and it is time to move on; at some point, those cute little shoes don’t fit any longer.
There are many database software solutions out there, you can pick and choose according to your business needs. The key is to understand the problem at hand and the needs of the company at the particular moment in time. One database may be suitable now but once the data changes or a company grows, so does the need for different software applications. Elements that should be put into consideration when considering a software change include size of the company, amount of data, adaptability, visualization and data consumption preference, personnel and so on. You can take the best and most sophisticated tool out there but without the right infrastructure in place, it is utterly useless.
Transforming data into Insight and actionable recommendations are the keys to any data visualization tool. Excel falls flat in this aspect due to real-time data limitations, lack of interactive dashboard capabilities, and management of huge metadata demands. Utilizing BI tools like Tableau, Spotfire, or Qlikview will greatly enhance the process of business decision making and provide an instant feedback loop into various performance indicators. Excel and Big Data cannot even be used in the same sentence, but that is another topic for another time.
At the core, excel is a spreadsheet tool. It works great as that. For a database, data visualization or computation software, look elsewhere. The cuteness and addiction of a Tetris game aren’t going to cut it.
Stay sharp. Innovate. Move forward.