How Much Damage Can a Spreadsheet Do to Your Company?
Billions. Without exaggerating, a single spreadsheet error cost Fidelity $2.6 billion. The root of the cause? An employee forgot to add a minus sign, indicating a loss of $1.3 billion. Instead, the value went in as a profit and the company paid out shareholders.
Spreadsheets are so awful that there’s an actual group of experts that meet every year and discuss the issues and risks they pose for organizations. While spreadsheets have their purpose in business, many companies over-rely on them. And if you’re not careful in how your business uses spreadsheets, you could end up ruining your business.
Human Error Leads to Costly Mistakes
As already mentioned, spreadsheets regularly fall victim to human error. With all the cells and rows, and columns, data can be hard to track and manage. Add complex formulas into the mix, and you’ve got the perfect storm for data entry errors to occur. All these variables make it incredibly easy for people to put information into the wrong field, resulting in massive errors.
If you run a small business, you may be able to recover from the mistakes and losses. But what happens when your business expands? Issuing more spreadsheets to fill the gaps will only open you up to a greater possibility of error.
These mistakes may not all end up in the headlines, but when they do, they damage a company, its employees, and its future prospects.
Problems with Spreadsheets Aren’t Easily Fixed
There’s no update you can install to remove human error from manual entry. Even if you could properly train everyone on policies and procedures while packing more people onto teams for data entry, there’s still a chance for error.
Fixing problems with spreadsheets often comes too late. That’s because spreadsheets work in data silos. There’s no way to connect them directly to the various platforms existing throughout an organization. Instead, you have to manually look over data, then copy and paste it into the appropriate places in the specific spreadsheet. And this poses a problem as well.
How do you know if the data is in the right field or not? Especially if you didn’t write the formula, it becomes very hard to audit spreadsheets. As a result, you have to ask the person who created it to look it over. But if you’ve ever edited your own work, you know how problematic that can be…
Goodluck Collaborating on a Spreadsheet
The very nature of spreadsheets makes collaboration tricky. This leads to employees simply sharing spreadsheets over email. And if your organization does use Google Sheets, then you can collaborate somewhat. But that process can still lead to data entry errors, deleted values, and duplicate entry. The UX isn’t great either. And new data has to be regularly imported. Manually. This means you could be working data in an outdated spreadsheet without knowing it.
Spreadsheets Reduce Transparency
Most spreadsheets compile data from generated reports. This means departments usually run and submit these reports and then someone has to compile the information. However, that’s a time-consuming process. It also prevents real-time reporting. So, if an IT department needs a week or 2 to run and compile the reports, for instance, the data points discussed could already be out of date. How can you make key-business decisions in real-time when so much time has passed since the original pull?
Spreadsheets Use Data Inefficiently
Spreadsheets are the business version of Hoarders. Companies collect and collect and collect customer data, but then they silo it into spreadsheets where access is difficult. Finding relevant spreadsheets and inputting the necessary details manually tends to be a hassle. And employees add a different element to the mix. They often cut corners, letting information falls through the cracks.
The result is an incomplete picture of your business and your customers. Some departments will have more data than you know what to do with, data you’ll most likely have to sort through to find anything of use. Other departments will have fractured, incomplete snapshots. This makes it hard to do anything useful with your data.
Spreadsheets Are Often Overused
The main function of spreadsheets is to capture data. Their advanced functions allow them to compile data streams and output results. But, they’re not made for business monitoring, auditing, detailed reports, or any kind of high-level business process management. Using them like such is kind of like using a hammer to fix everything. It’ll work great on nails, but you’ll start running into problems the more complex the task becomes.
Spreadsheets Hide Information
Employees waste a lot of time each day simply looking for information. And it’s hard to blame them. With data spread out all over various reports, scattered across files and hard drives, it’s a wonder anyone can find the information they need. Data is valuable, as long as you can access it and leverage it to grow your company. But without a clear way to do that, your organization is missing out on a clear advantage.
Spreadsheets Have a High Learning Curve
Most people have a general understanding of what spreadsheets do. But to use it for high-level business tasks, you need to know how to create and use complex formulas. These formulas aren’t easy to learn. And they vary from company to company depending on the task at hand. That means onboarding new employees and training them on spreadsheets for your business will take additional time and run up additional costs. Keep in mind that there’s also a high risk of turnover if you have too many inefficient processes…
Spreadsheets Create Security Concerns
Spreadsheets aren’t usually password protected. And if they are, the passwords typically aren’t that effective. (They can be pretty easily cracked). Additionally, spreadsheets (and their passwords) get shared haphazardly in most organizations. One simple mistake in an email address can send your data spiraling out of your organization. It’s also difficult to see who edits spreadsheets, making it hard to hold people accountable for mistakes. Without accountability, fraud can run rampant.
Spreadsheets Provide a Horrible UX
Let’s be real here: no one likes looking at spreadsheets. They provide a generic, bland version of the data. And while looks aren’t everything, the interface matters if you want to remember the information. That’s because you’re more likely to pay attention to the data if it’s in a form you can understand. People tend to process information visually. So, the more visual the data can be presented, the more potential it has to make an impact.
Spreadsheets Are More Expensive Than Other Solutions
Yes. You can purchase Microsoft Office for your office at a relatively low cost. And yes, you can access Google Sheets for basically free. But even if MS Office was free, it would still be more costly than other automated solutions. Even if your employees entered in every single piece of data into these sheets and never once made a mistake, Spreadsheets would still be more expensive than other solutions.
Because you have to factor in the labor. Once you start adding up all the time your employees spend looking for spreadsheets, hunting down information, transferring data, fixing mistakes, and even just learning how to use the software effectively, the costs explode. You’ll pay far more on labor for clinging to the past and over-relying on spreadsheets in your organization.
And once you account for the numerous errors, costs will only continue to climb.
Avoid Spreadsheet Errors with Low-Code
You won’t get rid of spreadsheets in your business completely. In fact, they’re efficient tools when they’re used for limited purposes. But if you want to fully connect your business with transparent workflows and seamless integration, then you need low-code.
Quandary Consulting Group leverages the power of Quick Base to help organizations build the low-code applications needed to streamline their business. We focus on your business, mapping out a plan for workflow optimization, then building the efficiencies your company needs. And with a 100% approval rate, our results speak for themselves.
Contact Quandary Consulting Group today for more information on how you can reduce the risk of errors and runaway costs from spreadsheets. Breakfree of these dated tools and prepare your business for competition in the digital age by contacting us today!