3 Ways Spreadsheets are Killing Your Business

Jan 20, 2014 4:19:00 PM

There has always been a huge disconnect in business between good process engineering and good process execution. In the good ole' days, this was solved through endless training and piles of paperwork.


Then came the "Rise of the Spreadsheet". Like a snake, he infilterated every aspect of your company's operations He was your financial model. He ran your sales. He managed your employee files. He even picked up your kids and  dropped off your dry cleaning. In absence of a better solution, the Spreadsheet became the go to solution to fill in the gaps in your nuanced business process.

But with the rise of platform-as-a-service software such as Intuit's QuickBase, the spreadsheet - your longtime best friend - has become an enemy that is destroying your business. Here's how:

1. Spreadsheets Give You a False Sense of Process

Spreadsheets offer a false sense of security. They make us feel as if we have a quality process in place because we can see information that we need in a single place. But think about what it took for your team to get that information into a spreadsheet in the first place. They had to interrupt their normal daily workflow to remember to update a spreadsheet. Rarely is the spreadsheet itself a source of workflow, but rather an annoying piece of double entry that a person has to fill out to report on the results of his or her own disparate process.

Almost by definition, a spreadsheet cannot create workflow. It can only present information about a process. It leaves your team to create their own processes - for better or worse - just so they can update your spreadsheet.

2. Spreadsheets Are Extremely Expensive Over Time

Spreadsheets are the "go-to" solution for managing process for most companies because people perceive them as being inexpensive and quick-to-implement. After all, most companies already have access to major spreadsheet software packages - no procurrement process, no headaches, right?

  However, over time, spreadsheets can be hugely expensive - both in real costs and opportunity costs. 

Don't underestimate the cost of maintaining a spreadsheet. First, there is daily inefficiency of sending spreadsheets back and forth via email. Moreover, most people don't realize the cost of errors in the spreadsheets themselves. Last year, Harvard economists found that 80% of spreadsheets have material errors in them leading to costs in the billions.

3. They Pigeon-Hole Your Thinking

Behavior researches have long-noted that biases take place in spreadsheet development.For example, people building financial models in spreadsheets often design the model so that the results support their personal beliefs. On top of this, individuals often get fixated on the data presented in a spreadsheet - never thinking "outside of the spreadsheet." They make the mistake that the spreadsheet provides a holistic view of a situation and do not think about the less concrete as

pects of a problem. This is behavior is reinforced when a spreadsheet is used repeatedly in, say, a regular meeting

A Better Way

Spreadsheets are not evil and certainly have a place in a business; however, web-based database platforms such as Intuit QuickBase, offer some strong advantages over spreadsheets. For example,

  • They allow you to build a process and workflow into collecting data which is useful to the user entering the data
  • They provide a single source of truth in real-time as information is updated
  • They force organizations to define their processes and compells employees to follow that workflow
  • They create efficiencies through universal workflow




James Cosman

Written by James Cosman

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