2 MIN. READ
We are two decades into the new millennium. Your firm has made it through the dot-com bubble, the housing crisis and COVID-19. You have transitioned from mainframes to SQL to HTML and are moving into the cloud as your team works from home. But every time you need to re-price your legacy pricing schedules, forecast a new product launch, or track a new diversity and inclusion initiative, your team is extracting data from a litany of legacy platforms, consolidating it in multiple spreadsheets and aggregating it across teams to deliver the executive-level summaries required to manage your firm.
For all the promises data architects have broken, Microsoft Excel has been there to track, compile, sum, slice and chart your business through challenges and successes, and everything in between. But Excel is not perfect. Spreadsheet-enabled processes are almost entirely manually driven, and the burden is on the user for accuracy and consistency. Yet despite these and other limitations, Excel’s flexibility and ubiquitous nature make it the most important software your company is using.
Excel continues to be the most widely used analytical tool
According to a Forrester study we commissioned, “Think Spreadsheet Risk isn’t a Threat? Think Again”, spreadsheets were the most widely used tool for auditing and controls (48%), comparative analysis (44%), model validation (38%) and budgeting/forecasting (37%). The second most prevalent method combines spreadsheets with other data tools, reinforcing the critical nature of spreadsheets. Financial models start in Excel, and “what if” pricing models live in Excel. Businesses simply won’t function without it.
Recognizing it as a business-critical program, Microsoft has continued to develop Excel’s functionality. It announced in December 2020 that a new feature will be added, allowing users to write their own formulas. This is in addition to the natural language queries and AI features it rolled out in 2018 and 2019.
However, spreadsheets alone are manual in nature. They expose the firm to risk from errors occurring in formulas, data connectivity, formatting and version control. Excel’s flexibility allows each user to construct unique analysis, which can be difficult to follow and validate. The responsibility for accuracy lands solely on the individual compiling a spreadsheet.
Spreadsheet risk can be mitigated
Excel will continue to be a critical tool for businesses of all sizes, but we do not have to accept the risks associated with using it. Incisive can mitigate spreadsheet risk linked to manual errors by scanning your network, identifying inconsistencies, controlling versions, and empowering decision-makers with consistent and accurate data they can trust.
If you don’t have control of your spreadsheets, you can’t trust the data that drives your business.