As we help our clients through their selection processes for an integrated ERP system, one of the first things we do is work to get a solid understanding of how their business operates on a day-to-day basis. One common thread we see with nearly all of our customers is a heavy dependency on Excel spreadsheets. Shockingly enough, Ultra has worked with companies who rely on over 100 spreadsheets just to run their daily business! This blog entry will explore the main reasons why companies use Excel and some reasons why relying on spreadsheets can be a risky way to run your business.

The Dangers of Running a Business on Excel

In our experience, one of the main reasons companies use Excel is because their existing systems don’t allow them to view and understand data while providing the information they need to make timely business decisions. There is no doubt Excel is an extremely powerful tool, but below are five top reasons why relying on spreadsheets is a dangerous way to store information:

1. Studies have shown 80-90% of spreadsheets contain serious errors. We have all heard stories of spreadsheet typos or oversights costing companies millions of dollars (Eight of the Worst Spreadsheet Blunders). Spreadsheets are easy to use and can be created by anyone. Unfortunately, errors are very easy to make but catching them can be very difficult.
2. Version control becomes a big issue when spreadsheets are emailed back-and-forth or stored on individual computers.  It doesn’t take long before there are multiple versions floating around and your company is not working from one version of the truth.
3. Analyzing data that integrates across multiple departments becomes very challenging. Typically, each department may have its own spreadsheet containing different information about the same customer. One might hold sales data, while another might hold billing data. Another might hold completely different data on the same customer. Trying to analyze all of the data related to that customer becomes extremely difficult.
4. Spreadsheets can become corrupted very easily. As spreadsheets grow, more and more changes occur, usually adding more and more data. As these changes occur and data gets added, spreadsheets become unstable. The more unstable they become, the greater the risk for data loss.
5. It is not uncommon for different groups within an organization to create very similar, even identical spreadsheets. Typically, controls are not in place to prevent a third group from creating the same report. This duplication of effort is a clear waste of resources and a significant hidden cost of manual reporting in Excel.

The Benefit of an Integrated ERP System

Ultra is a big proponent of integrating all information into one ERP system, therefore eliminating the need for external spreadsheets. Having one system would help eliminate some of the pitfalls companies run into from working with multiple spreadsheets. It also provides one version of the truth and visibility to the same data throughout the company, which is important for a lot of reasons.

If your business still runs on Excel and you seek to streamline your information systems, contact Ultra Consultants today.