Why Excel will SAVE you millions

Yesterday I read this post called “Why Excel is costing you millions” by Gayle Ryan.  I have never seen a more misleading and ill informed post about Excel, and I was motivated to provide a response to this article here.

Ryan starts out by talking about static reporting, and how that is no longer enough for business – this is definitely true.  She correctly points out that businesses need more data discovery, user focused, dynamic reports.  But from that point on, Ryan completely fails to recognise Excel for its strengths, and she is completely misleading in attributing problem after problem to Excel.  Let me share just a few of these incorrect statements along with my experience.

Ryan incorrect statement: “… spreadsheets don’t allow decision makers to see the big picture as effectively as a dashboard”.
What a load of rubbish.  Excel is a very powerful tool with fantastic dashboard capabilities built in, specifically PowerPivot, Pivot Tables,  Slicers and conditional formatting.  Excel has an enviable suite of visualisation capabilities and can easily be combined with tools like SharePoint Enterprise to provide an enterprise strength dashboard tool at a fraction of the cost of many other tools.  I personally built such a solution at Coca-Cola when I worked there.  Excel has a distinct advantage over many other dashboard tools – that is most business users know how to use Excel, and they can participate in the development of the dashboards themselves without having to rely solely on user requirements and specifications handed over to a developer.

Ryan incorrect statement: “Excel reports are static, and take time to produce”.
Absolute garbage!  Of course some reports are static, but to attribute Excel as being a tool that can only be used for static reporting is so wrong that I wonder what her motivation is for making such a statement.  Modern Excel has a powerful suite of capabilities including PowerPivot, Power Query and Power View that allow users to connect to almost any data source, produce a data model, and then analyse the data using discovery techniques.  When the user has created a report that has the potential for longevity, it can be polished into a user friendly reusable report with drill, slice and dice capabilities using Pivot Tables, Slicers and conditional formatting.  All this at a fraction of the cost to to the same with many other data visualisation tools.  And much of this capability is not new – Pivot Tables have been included in Excel since 2000.

Ryan incorrect statement: “Dashboards are also interactive, unlike Excel, which means that if a certain data point is troubling, dashboard users can drill down to get more information”.
Excel is a very powerful desktop or dashboard interactive tool using standard Pivot Tables, Slicers and Conditional Formatting.  Excel has taken further big steps forward with the release of PowerPivot and Power View (although in my opinion Microsoft has a lot of work to do to make Power View a real competitor to other more developed BI visualisation tools).

Ryan incorrect statement: “Excel spreadsheets … are actually hindering our ability to understand critical information by being difficult to read”.
You have got to be joking – are you real!? Excel is the most ubiquitous data analysis tool in use today, and probably over the last 20 years.  Excel is a flexible, cheap and agile tool that can present your data almost any way you want to see it.  If Excel is difficult to read, then it has more to do with the report developer than Excel itself.

Why Excel will save you millions

Excel will save you millions

In my view, one of the best ways to burn money is to believe that your problems are all about your tools, and that if you could just buy “a shiny new tool” that all your problems will go away.  Nothing is further from the truth.  My experience is that problems with existing BI solutions are related to “how” the tools are used and deployed as well as problems with master data standards and reporting processes.  Any business that reads Ryan’s article may be tempted to think that they should abandon Excel as a BI tool and instead go out and buy some new BI “discovery” tool.  It is definitely true that high end BI tools have a significant and growing role in business, but they are not the only tools.  My formula for how Excel will save you millions is as follows:

  1. Understand your business needs of data and reporting.  If you don’t know this, then you need to work it out BEFORE you spend a bucket of money on a new tool.
  2. Determine why your current tools/processes are not delivering on those needs.  Is it really the tools, or is it the way the tools are used, the process and the lack of data standards?
  3. Use Excel as a prototyping tool and determine “how” you can make your data work for you – learn by doing.  If you have a data warehouse, use PowerPivot to build on the fly data models that deliver real time, dynamic reporting that you can slice and dice to provide insights into your business operations.
  4. Iteratively improve your PowerPivot Excel tools until you get to a point that you can do no more.
  5. Then and only then should you ask yourself “do I need to replace what I have got with something better”.  In many cases the answer will be no.

The prototyping process will force you to think about your real problems (eg availability and cleanliness of data, knowing what you really need) and help you solve these problems as part of the prototyping process.  The further you go through the journey, the better your data and tools will become, and the more you will learn about what you actually need.  At the end of this journey you are highly likely to discover that you know what you need, and that you already have robust tools that can be published in the organisation using tools like SharePoint Enterprise (Excel Services, PowerPivot Galleries etc).

Compared with the risk of failure by believing that somehow some new shiny BI tool will solve your data woes, my approach above using Excel with PowerPivot is highly likely to save you many millions of dollars.

Share?

Comments

  1. Hi Matt! I find your website in Rob’s post. I just finished your fist post and can’t agree more!

    I think the best thing about Power Pivot is that it enables non-IT people to handle very large data and share the result (BI) with the others. Compared with the other BI, Power Pivot is so easy to use and so powerful to interpret data.

    The BI developers can be freed from arranging data and writing program (so now they don’t have to be pure IT people). Now they focus on how the BI can help the users and provide meaningful information & knowledge.

    I have been learning Power Pivot for more than a year and now I am trying to implement a BI system based on Power Pivot in our company. I think your blog can teach me a lot! (Power Query things are too difficult for me, a management accountant… but I think it worth learning!)

    I also believe Power Pivot will be the future in this decade and best wishes for your business!!

    • Thanks for your comments Aden. I think one thing we all need to remember is that you still need solid validation and testing procedures to be successful. I hear a lot about Excel being “full of errors”. Excel has no more incidents of errors than any other software based solution – the only difference is people tend not to have testing discipline with Excel like they do with software. That doesn’t make Excel bad, that makes the process bad.

      Good luck with your own BI crusade.

  2. Matt, these are some solid arguments and I couldn’t agree more. Even just using Power Pivot and Power Query for prototyping data models and ETL designs can save millions!

  3. Hi Matt.
    Thoroughly enjoyed reading this since I totally agree with you.
    Learning things the hard way can be expensive, but in return the lessons really stick. I have over the years gained a lot of knowledge, but the most important one has been that the greatest challenge is to overcome my own ignorance and to always be suspicious of my first efforts, especially when it felt like a walk in the park. Excel has never let me down, but I can remember several instances when I have let Excel down by moving along too fast. Some past errors will now forever be past thanks to Power Pivot making VLOOKUPs, quadruple CONCATENATEs and nested SUMIFs obsolete.
    I am still in Power Pivot infancy, but so far the journey has been exciting and satisfying and I am convinced that DAX is the greatest language on earth.
    Having read your article I also realized that I can stop buying new golf clubs every year!

  4. These people who run down Excel usually have one thing in common: buy my solution.

    I am learning Power Query, Map, Pivot, DAX, Cubes and so on. I have just started to look at Power BI and there are some startling things in there as we all know.

    The reality of Excel is not in Excel itself, although there are some limitations; but in the way that people use it. I spend a lot of my professional life working with Excel as a playarounderwithit, author and as a trainer. On every training programme I meet people who claim to be an accountant or statistician or scientists … you name their profession … and they work with Excel all day every day in some cases. So far so good but it’s what they don’t know that is worrying: my job is to train them so good that they have taken a step forward to be trained. However, accountants who don’t know about Pivot Tables? Really? Excel Tables? Mystery. VLOOKUP() … they want the sexy VLOOKUP(INDEX(MATCH())) solutions before they understand VLOOKUP itself. The good news is that there is work for trainers like myself until we all retire and beyond.

    Then there is the management issue! I do a lot of hands on practical work that makes the delegates work on an Excel problem from their work: some are excellent and some are eye wateringly bad. A common theme is that ill informed users need the training; lazy users are getting away with the fact that their boss understands nothing so anything they can get away with is fine by them!

    There is no direct solution to this except that companies and individuals need training need analysis updates and them the training called for!

    By my product/quick fix solutions go this way: I did in house courses for a very big company in Saudi and during one course a delegate told me that one of the big four accounting companies had been paid $1 million to provide the spreadsheet of spreadsheets for the company. I asked, why am I here then? Ah! Well, it doesn’t really work!

    Then there’s the spreadsheet being used by a national oil company that I was given to look at as an exemplar or Excel programming, inter departmental collaboration, comprehensive reporting solution … after two hours of playing with it I told them, you need help. A lot of help! They were shocked as they saw it as their flagship reporting tool. It was a mess but no one had given them objective feedback before.

    As always, beware the Greeks bearing gifts!

Leave a Reply

Your email address will not be published. Required fields are marked *

Ten Things I Wish I Knew When I Started With Power Pivot.   Learn  Without The Pain!

x