Digital Transformation » Technology » Happy 30th birthday Microsoft Excel – what next?

Happy 30th birthday Microsoft Excel - what next?

Flexible, agile and easy to use, Excel dominates the market in a way no other tech product does - but its time to revaluate its use, suggests Robert Gothan

THIS AUTUMN, Microsoft Excel celebrates 30 years of existence, giving users across the globe the chance to reflect on its success and importance. Truthfully, we don’t know where the corporate world might be today had Dan Bricklin and Bob Frankston not invented VisiCalc on the Apple II in 1979. Six years later, Excel was born and the rest is history.

For any application to have claimed an unparalleled share of the corporate market is an outstanding achievement. Rather than allowing this major milestone to pass unnoticed, businesses should use this as an opportunity to consider their ongoing relationship with Excel.

The fact is, we can’t live without it, yet we are fast coming to the realisation that we can’t live with it particularly well either, especially in larger organisations. However, on this anniversary, let’s start by focussing on the benefits that Excel has brought us over the years, empowering staff at all levels to complete otherwise impossible processes with ease, as well as the extent to which our day-to-day activities are now dominated by it.

Why Excel?

Excel is attractive to end users because it is one of the few tools with which we can simultaneously process data and present information. As a result, firms typically prefer to manage their data in a spreadsheet, rather than relying on business intelligence. The problem, however, is that using Excel in this way puts too much focus on presentation and not enough on process.

It’s easy to see why this happens; business change requires rapid intervention, especially within finance functions, and the agility of Excel is hard to beat in this regard. Excel has enabled finance departments everywhere to manage ever-larger details, records and plans – allowing them to cope affordably with the increasing demands from the business.

Another key element of Excel’s popularity is ownership. As users, we not only own various problems or business challenges, but also the responsibility to solve them. Excel gives us a way to complete a particular job in exactly the way we want to. This level of flexibility enables us to individualise our processes and presentation, something that is not always available when using other tools.

Spreadsheet stress

Spreadsheets will always play an important role in finance, but issues sometimes occur and processes don’t work quite as well as expected. Spreadsheets are at their best when used either as a tactical tool, or as a prototype for a more formal process design. The flexibility of Excel allows users to create a template very easily, but there is a danger that problems will occur if the program is relied upon too heavily.

A recent poll by YouGov found that 72% of medium and large businesses use spreadsheets for budgeting and/or forecasting, yet 17% of large businesses have suffered financial loss due to poor spreadsheets.

The problem here does not lie with the program, but with users relying too heavily on Excel to perform important tasks, without taking into account its limitations. This is the real reason for many process glitches for businesses and key finance functions, yet YouGov’s survey revealed that only 41% of companies had invested in spreadsheet training in the last six months.

Another issue found when using Excel is that what starts out as a tactical solution to an immediate problem can quickly result in a set of workbooks that are difficult to manage and maintain. As such, without clear governance features like version control and traceability, spreadsheets can represent an unwanted risk to your organisation.

Moreover, spreadsheets are not replicable, and it is now widely accepted that most spreadsheets will be redesigned when a staff member leaves. This is due to the wide variety of ways that a single team might approach a common task – at task, design and execution levels. It stands to reason that many errors are found within the different parts of a spreadsheet , which reflects the lack of consistency and control between the variety of users.

Providing solutions

Nobody can deny the advances that spreadsheets have brought to the finance function, but with recent industry reports highlighting the potential for errors (and subsequent risks) with large and complex spreadsheets, organisations are increasingly looking to address this vulnerability.

The larger the company, the more spreadsheets are deployed, and the greater the issues and headaches that occur. While Excel is clearly a central tool in many offices, businesses must also consider finance-friendly alternatives that address these risks whilst also respecting the need for flexibility.

New technological advances are boosting the popularity of more sophisticated programs that eliminate version control issues while offering greater consistency, built-in back-up, and compliance support. To stay ahead of the competition and ensure compliance to industry regulation, businesses should therefore consider how they can best use Excel in combination with new software that allows user to manage large numbers of complex spreadsheets and reduce the risk of errors that result in wasted time and effort.

The enduring relationship that most businesses have with Excel certainly has its advantages, as it has allowed many key processes to evolve significantly. However, in today’s rapidly developing world, 30 years is a long time and business demands change by the day. While Excel celebrates three decades in existence, now is the right time for businesses and finance functions to re-evaluate how the tool is being used, determine the best ways to maximise its offerings, and consider how business processes could be improved.

Robert Gothan, CEO and founder of Accountagility

Comments are closed.