Why Fortify Spreadsheets with a Data Hub & Analytics Strategy? – Part 1
Spreadsheet apps like Microsoft Excel are very capable tools for handling general data analysis, creating data visualizations, and developing budget scenarios. But spreadsheet users should have a healthy respect for the limitations of spreadsheet programs.
Why? Because individual spreadsheets or groups of them that capture your business data for reporting, planning, and performance analysis do not equate to a secure, centralized data management and reporting environment that ensures accuracy and scalability.
In this first of two blog posts, I highlight some of the things to be mindful of when relying primarily on spreadsheets for planning and reporting. My second post discusses why business analytics and reporting applications backed by a data hub may present a better strategy for planners, analysts, and other business users who need to analyze enterprise data and gain insights that drive better business performance.
Why be concerned about spreadsheets used in isolation?
If you currently rely on spreadsheets for sales planning, budgeting, analysis, reporting and other applications, there are a number of things that can impact the effectiveness and accuracy of your planning and reporting initiatives, as I’ve outlined below.
- Outdated Data & Thwarted Collaboration. Spreadsheets can become static and outdated if they are not connected to a central data hub and automatically refreshed from that source data on a daily or more frequent basis. Spreadsheets can become isolated, disconnected data sets that lead to misinformed analysts and frustrated data scientists. Effective collaboration is at risk, too, if static spreadsheets get shared as one-offs via messaged attachments. That sets up unwanted situations of teams looking at different sets of data or the wrong iterations of plans or other types of reports built from the data.
- Tedious Maintenance & Inaccurate Info. Manual set up and maintenance of spreadsheets is only as good as the expertise and accuracy of the people maintaining them, and ongoing maintenance activities can be a drain on user productivity. That depletes the time users could have spent understanding, discussing, and acting on the data. Also, depending on people alone to maintain existing plans and visualizations can lead to content errors. Beyond typo risks, there’s risk of new data missing for products and customers added to your business over time and old legacy data not being cleaned up in a timely manner for discontinued items and accounts.
- Inconsistent Treatment of Data. Groups of independent spreadsheets developed by different teams can lead to misaligned or inconsistent representations of your data. Values might get formatted or labeled differently from one spreadsheet to the next. These files can lack vital mechanisms behind the scenes for keeping data aligned and validated. Alignment and validation are critical for knowing where values belong in the larger schema of dimensions, categories, and other groupings that your company relies on to properly organize its data.
- Poor Match for Handling Big Data. Spreadsheet performance deteriorates as the size of data being captured in them climbs. Big data and complex calculations built over that data aren’t intended to be managed from a single file saved locally or in the cloud. A spreadsheet is not a data warehouse or database. Also, a spreadsheet does not have a tight set of security rules around the data within it.
- Missing Performance Alerts. Spreadsheets lack automated features for alerting users to important conditions that require attention such as low inventory, high return rates, idled manufacturing lines, or underperforming products.
- Inadequate Data Exploration & Writeback Features. Being able to drill up and down through layers of detail or to other resources for additional context generally is not supported in today’s spreadsheet applications. This missing feature impacts ease of use for users who want to quickly explore related data not present in the active spreadsheet. Disconnected spreadsheets can impede planning activities, too.
A scalable data management hub that connects a diverse set of analytics and performance metrics will compliment your organization’s spreadsheet use, establish true collaborative workflows, and protect against risks associated with relying on spreadsheets for tasks they were not intended to handle.
With a data hub, sales, operations, marketing, and finance teams can work from a cohesive, verified set of transactional data and have flexibility in how they access the data, such as from shared reporting views with drillable layers of detail. Data hubs are proficient at handling large data sets from multiple sources (corporate-, third-party, and user-generated data) and making sure analysts see current, aligned, and complete data from whatever app of choice they are viewing the data.
In my next post, I’ll explore precisely how an integrated data hub and reporting platform can counteract the spreadsheet challenges identified above. To view a brief video about Silvon’s platform in the meantime, click here.