In the current dynamic market, businesses need to constantly plan and monitor business performance in real time so they can be ready when the market takes its next sharp turn. This relies on the ability to instantly access live data insights so that decision-makers can easily identify where to focus their efforts, and areas that need to be downscaled or retired completely.
Many small and medium-sized businesses continue to use Excel spreadsheets to crunch numbers, develop plans and monitor performance. The problem with this approach is that spreadsheets weren’t originally designed with this use in mind.
Spreadsheets were purely designed to record, calculate and categorise data. This may work well for very small businesses as they are just starting out however quickly proves unsustainable for ongoing budgeting, planning, reporting and monitoring purposes as the business grows or changes.
In the post-pandemic world, business survival depends on the ability to rapidly scale and pivot into new areas where the organisation may not have traditionally done business. Spreadsheets can’t scale to meet the changing needs of business and don’t provide real-time business insights. In the fast-paced digitised business environment, this makes spreadsheets redundant for planning and monitoring business performance.
There are four key reasons why spreadsheets don’t work for business planning, monitoring and reporting:
- Spreadsheets rely on manual data entry. Spreadsheets don’t automatically generate business data, which means that data is often outdated. Even a one-day delay in data being entered into a spreadsheet can mean that it doesn’t correlate with actual business performance, which shifts quickly in a volatile market. Manual entry also comes with a high risk of data errors. Simply having a zero in the wrong place, or omitted completely, can dramatically change the business outlook, making strategic decisions based on the wrong numbers.
- Analysing spreadsheet data is time consuming. This results in employees being taken away from revenue-generating activities to conduct process work generated by the spreadsheet. Depending on the size and complexity of the business, this can take days or even weeks of work. Businesses cannot afford to lose even half a day of revenue-generating activities driven by employees, so spreadsheet analysis can be costly to the business, especially in a highly competitive market.
- Spreadsheets kill collaboration. Spreadsheets don’t let employees collaborate in real time causing issues with version control and increasing the risk of spreadsheet errors. Particularly with geographically dispersed employees, organisations need real-time, online collaboration tools that let employees across different teams access information and provide input for planning purposes. Automated tools take away the issue of version control through centralising data and continually delivering updates in real time.
- Spreadsheets are not secure. They can also be easily shared and manipulated to change the business performance outlook. This puts the business at financial, reputational, compliance and competitive risk.
New secure, automated and cloud-based technologies are helping businesses reduce time, cost and risk when it comes to business planning, budgeting, monitoring and reporting. They take the headache and guesswork out of spreadsheet processes, which lets the business focus on its core revenue-generating activities. To find out the most cost-effective way to replace spreadsheets in your business, download our checklist or contact the Planning Systems Group team today.