Head of Touchstone Business IntelligenceMore
The spreadsheet’s appeal is understandable – it’s allowed all levels of employee within an organisation to start organising, processing and communicating data without complex training.
However its accessibility is also its downfall. As spreadsheets grow in number and complexity organisations are relying on an increasingly unstable ‘house of cards’ of documents to monitor information that is often critical to the health of the organisation.
I’m reminded of the tally stick – although not from personal use I might add! It was just two hundred years ago that the Exchequer was using them to collect taxes. A stick was marked with the income gained and acted as a receipt. The sheriff who collected the taxes kept half which was his receipt while the Exchequer took half which was then how tax receipts were recorded. This process happened twice a year so that’s when the Exchequer got visibility of how much tax was being received as the tallies were added up from across the country.
We’ve made progress – data is more complex than a few nicks on a stick and we more readily have access to that information. But businesses are still locking data up in spreadsheets within their business units and waiting for them to be submitted by their sheriffs before processing it to gain the information they need. It may not be limited to twice a year, but it’s also far from instant.
With added complexity comes added risk. One version of a spreadsheet can turn into many making it hard to know which offers the truth. One small cell error can cause a cascade of errors. Combining all these sources is a burden and prone to mistakes.
Spreadsheets require someone to operate them, so a sickness or resignation could leave a blind spot in a company’s financial data. Plus with increased acquisition and merger activity many businesses are operating multiple P&Ls with differing reporting formats making it increasingly complex to get the intelligence that businesses desperately require.
The answer is to combine multiple data sources with data warehousing – the ability to bring together disparate data sources in a meaningful way. That data can be analysed, brought into a dashboard and still if necessary accessed via a spreadsheet. However that spreadsheet will be working from a unified stream of data rather than trying to combine sources on the fly.
It doesn’t have to be rip and replace, it’s more about understanding what you have and what you need and bringing it together. Spreadsheets will always be used in business but they shouldn’t be the backbone of them. Only then can decision makers receive the intelligence they need to accelerate their businesses and gain competitive advantage.