Despite its versatility and popularity as a number crunching and analysis tool, Excel is likely also the world’s most popular database application, something never intended by its original creators. Leaders of companies of all sizes rely on Excel capabilities to handle many of their most important business functions. While they can use this software for a wide array of tasks, including creating and publishing charts, many are finding that company needs eventually outgrow this tool’s functionality. As a result, business leaders are turning to create proprietary software — systems designed and created for specific company needs.
Whether your business has already outgrown Excel, or it’s on the horizon, creating a custom solution for your data management and reporting may be the best fit. Relying only or mostly on spreadsheets can be a dangerous way to handle data and can limit your business. Consider the following when considering whether or not your business is ready for a custom software solution:
Using an out-of-the-box system such as Excel may work initially, but when is it time to stop using basic spreadsheets? Some questions to consider when deciding include:
- Are employees spending more time working on spreadsheets than they really have?
- Do you have to hire in-house Excel experts?
- Does Excel limit what your business can do, hurting your bottom line, and lessening your ability to move your business forward?
- Is Excel unable to provide the company data you need to make solid business decisions?
- Does Excel provide the kind of output that your internal and external stakeholders can effectively consume?
If your answer is “yes” to one or more of these questions or if a “yes” answer is likely in the near future, a custom solution may alleviate some of your frustrations.
Business leaders can achieve a tremendous return on investment (ROI) when they have the tools in place to scale and grow more effectively. With added visibility and transparency in a custom solution, executives have the data they need to make sound decisions and can eliminate labor-intensive processes that prevent valuable employees from focusing on other tasks. Often, business leaders are limited in the ways they can grow their companies when using Excel, but a custom solution may provide the growth options they require.
For example, when professionals from my company, The Intellection Group (TIG), first met members of one investment management company, who ran day-to-day operations completely on Excel, the largest fund the investors had raised to date was nearly $300 million and in a single currency. Soon after their custom-built software system launched, they made plans to raise their first $1 billion fund and went on to be able to work in many different currencies simultaneously. With the use of the new system, long-term partner investors had no fears in increasing their participation. Without leaving Excel behind to move to a custom system, this growth would really never have been possible.
Centralized Data and Rules
Perhaps the biggest challenge is that Excel creates a distributed data model rather than a centralized data model, meaning data isn’t stored in one central location that everyone accesses. Instead, all employees can download the data to their own spreadsheets and manipulate it. The source data — or the hard-copy — is immediately obsolete to everyone else and there ceases to be a canonical data source for the company. This leaves company leaders at risk for missed, overlapping, or inaccurate data. Custom solutions can allow for centralized data systems with distributed access, safeguarded data and streamlined processes.
Excel also knows nothing of the rules and boundaries that define your business’ unique operations. It will take any data you type or paste in, regardless of whether it’s good or bad, intentional or not. Formulas may define some business rules and constraints, but they are not centralized and are subject to the same human error potential. Frequently copying and sharing inaccurate spreadsheets quickly multiplies the problem, and most of the time these errors go unnoticed until it’s too late. And errors are not uncommon, whether you are a novice or an expert user, and there are many examples of simple errors causing catastrophic results.
Excel doesn’t support the idea of role-based permissions like you would see in mission-critical software systems. Spreadsheet security itself is low and hackable (sometimes through third-parties), even when password-protected. Assume that anyone with the spreadsheet in hand can make whatever changes they want at any time.
Your competitors are not sitting still and, like you, constantly looking for ways to gain an advantage. Many have already recognized the shortcomings, inefficiencies, and insecurity of Excel and have moved on to scalable, custom systems that provide significant advantages in the marketplace.
Custom Software Advantage
As businesses grow, custom software solutions begin to make more sense than Excel. You likely already make use of off-the-shelf systems such as customer relationship management (CRM), sales tracking, inventory management, and others. A custom software layer, using technologies such as .NET, Python, Java, Highcharts, etc., can leverage existing and new system API’s to tie everything together with a user-friendly query and reporting engine, even extending this to mobile devices, to help business leaders reduce organizational risk, ensure long-term survival, and offer novel ways for executives to achieve company goals.