People EVERYWHERE are talking about the death of Excel. So much so, that many finance professionals, from the C-suite to Wall Street, have changed their views as a result of the high-profile media attention surrounding it. In this article, we’re going to be delving into some of the mission-critical problems with Excel and how to solve them.
Is Excel really dead?
Businesses today rely heavily on financial modeling. In many organizations, Excel-based financial models are so entrenched in the culture that junior staff are often handed “legacy models” without understanding how they actually work. These same models are then reused and passed down from generation to generation, causing major headaches for finance teams!
Chris Argent, BI and Analytics Strategy Manager, Group Finance at Vodafone, agreed when he was interviewed as a guest on the Financial Modeling Podcast…
“MS Excel is a ball and chain around your finance team necks which stops them from thinking and working differently. It stops them improving data flows and process, stops automation savings, stops data management benefits and stops the “big picture prize” of whole company predictive analytics and storytelling which is the future of finance.”
“MS Excel is a ball and chain around your finance team necks which stops them from thinking and working differently. It stops them improving data flows and process, stops automation savings, stops data management benefits and stops the “big picture prize” of whole company predictive analytics and storytelling which is the future of finance”.
Despite all of this, Excel is still the most widely used software package in the world. So, I guess that mean’s it’s not dead (unfortunately). But, that doesn’t mean it shouldn’t be!
3 Mission-Critical Problems With Excel
Now that you know Excel isn’t dead, let’s get into some of the problems with Excel and why it needs burying in the ground (for good)…
Excel’s Significant Limitations
Not only does Excel have a limit of the number of records per sheet (1,048,576 rows by 16,384 columns), but also suffers performance issues as the data grows. It’s slow, clunky, and just not designed to handle the large data sets of today.
But, that’s not all!
Excel spreadsheets are stale. Since CSVs don’t connect to live data warehouses, data in worksheets becomes out-of-date as soon as you import them. Over and over again, users must undergo manual processes to report the same information.
Excel’s utility also decreases inversely with the complexity of the financial model. This is because Excel is basically a two-dimensional model. However, real-world data needs to be processed in multiple dimensions. Monte Carlo simulation, for instance, uses large volumes of data. And, there is no doubt that Excel does not have the best Monte Carlo capabilities.
Excel Creates Poor Process – The siloed, non-collaborative nature of Excel makes it a nightmare for data management and good stewardship
Nowadays, no data analyst or spreadsheet modeler works alone. We are all part of a bigger picture! Every day, we must deal with tasks like team debugging, feature discussions, best practices, and documentation. And, team collaboration is not easy with Excel.
Most Excel docs live locally. And, despite having cloud access, their worksheets lack comprehensive collaborative features and are really designed for individual use. It is therefore near on impossible to build off the work of another person without duplicating efforts.
And, real-time collaboration is only the beginning of the challenge. What happens if you need to send a preliminary budget to management for approval? Having to email a large file over is a real pain in the backside!
Documentation is another big part of team collaboration. And manual changes to a spreadsheet are often undocumented and lost over time, not to mention a nightmare when it comes to audit!
Excel doesn’t make good use of your computer’s built-in data processing capabilities
Yes, Excel has plenty of features, but how many of those features are actually useful to modelers and analysts? How many ad-ins or plugins do you have installed? Probably a lot! Many of which are likely designed to help make your worksheets run faster.
You see, whilst Excel is running its calculations, your machine is essentially on lockdown! So, not only is Excel slow, you’re whole system is slow too. And, there’s every chance that your computer may freeze or crash during the calculation, resulting in the loss of all your work.
Creating a financial model in Excel also requires a lot of skill on the part of the modeler. Not only do they need to understand the financial functions, they often need to be able to program. This is not the case with more advanced software (e.g. SheetRocks), where features that require programing within Excel are out-of-the-box. Thus, reducing the dependence on human skills.
High-Performance Spreadsheets Are The Way of the Future
Despite the fact that Excel is dead, it doesn’t mean your needs have disappeared. You still need to report financials. And, chances are… you need an easy way to transition your old materials into a new system. So, what’s the answer?
… SheetRocks SaaS Spreadsheet Solution!
✔️ Without a sweat, SheetRocks opens a spreadsheet with 1.7 million rows
✖️Excel doesn’t even come close! (Limited to 1,048,576 rows)
✔️Real-time collaboration is easy with SheetRocks
✖️Excel doesn’t allow for real-time collaboration
✔️No coding/ programming required to get the most out of SheetRocks
✖️Excel modelers need to learn how to code in order to get the functionality they need
SheetRocks will surpass all your spreadsheet performance expectations by decreasing runtime from hours down to seconds, even on large datasets with multiple collaborators (without coding a thing).
And, getting started couldn’t be easier! Just click here and give SheetRocks a try for FREE! It’s sure to solve all of your problems with Excel!