I see this call to action everywhere – newspaper and magazine articles, pop-up ads, on LinkedIn – “Dump the Spreadsheets!!!”  Are they serious?  Yes, they seem to be.  I googled the term and got 196,000 results.  To be fair, not all returns were anti-spreadsheet, but the top results were straight out of listicle heaven – “9 Signs You’re Ready…”, “6 Steps You Need To Take…”, and the even better “7 Steps You Need To Take…”

What’s Wrong with Spreadsheets?

There is nothing wrong with spreadsheets.  Spreadsheets are a great tool for analysis, but there are some drawbacks if you try to make them a one-size-fits-all solution.

1. Spreadsheets are not databases. You can try to keep track of your accounting, inventory, production, personnel, and customer data in spreadsheets, but it will be cumbersome at best.
2. Spreadsheets have very few controls and are therefore extremely susceptible to human error.

What Are You Supposed to Use Instead?

Since many of the “Dump the Spreadsheets” articles are written by software companies, or by consultants who want to help you select and implement your new software, the answer is simple.  They want you to use their software.  Their software will revolutionize your business!  It’s true.  Upgrading certain business functions from a spreadsheet to more specialized software can absolutely be the right choice.  (But don’t get rid of your spreadsheets!)

First and foremost, please invest in an accounting software with appropriate functionality for your business.  Your finances are too important to be left at the mercy of formula errors, bad links, and unbalanced entries.

The rest of your business functions may soon follow.  A good CRM system (Customer Relationship Management) can revolutionize your sales team effectiveness.  HR and SCM (Supply Chain Management) systems can also be very beneficial.  At some point, your business may be of the size and complexity to justify investing in an ERP system (Enterprise Resource Planning) or BI tool (Business Intelligence, aka Decision Support), or both.

Then Why Keep the Spreadsheets?

Reporting – The systems you purchase will most likely come with some sort of reporting module – a predetermined set of canned reports.  For example, your accounting software will give you a balance sheet, an income statement, and a transaction detail report.  Problem is, you may not like their account groupings or their font or their format.  Depending on your software, you should have at least two options:

1. Create new customized reports in the system. Sometimes this task can be a bit technical, so you may need the help of your IT department or a consultant.  Costs include
   1. Your time to spec out the report.  IT or consulting time to create the report (once it makes it to the top of their to-do list).  Your time to test the report.  Back to IT for final corrections and publishing to the production environment.  This could take weeks.
   2. Consultants rarely work for free.
2. Export the pertinent data into a spreadsheet and customize your reporting from there. I’ve yet to encounter a software package that does not have the capability to export data to an Excel or .csv file.  Hmmm, the software that is supposed to allow you to #dumpthespreadsheets allows you to export to spreadsheets…Interesting!

Analysis – As you know, this is the big one for me!  How can you possibly put your Blank Page Vision™ to work with nothing but canned or standardized reports?  A BI tool’s dashboard may keep you up-to-date on your KPI’s, but you need the ability to analyze why a key performance indicator is changing.  Chances are, you will need to export sales and customer data from your CRM system to a spreadsheet before you can map it.  You must always have the flexibility and power of a spreadsheet at your fingertips.

Key Takeaways

YES, software solutions are powerful.  They can also require a significant investment of money and time.  Be diligent to find the right fit for your business.  Understand that if your business is going to thrive, you may reach a point where it will cost you more to NOT have the right system.

NO, your new software system will probably not automatically generate all of the reports you want, nor will they be formatted to your satisfaction.  Make sure you cover this point in-depth with your system sales rep.  They can create every report you’ve ever thought of, but it will cost you.

NO, you cannot expect to live a spreadsheet-free life, no matter what the software people tell you.  You should be able to publish your standard reports from your new system, but your ad hoc analysis belongs in a spreadsheet.

YES, #keepthespreadsheets.

At Reporting Dynamics, we work with your systems, whatever they may be, to conduct targeted analysis, create customized reporting, and facilitate better decision-making.  If you’d like our help to achieve your financial goals, please don’t hesitate to contact me at pat@reportingdynamics.com.