Excel is an excellent tool for processing data, but it has its limitations. If you are using overly complicated formulas, or if your computer crashes every time you open an Excel file, then maybe you should consider using a different file format.
So, what are the use cases for which you should consider different software? Here are a few situations where Excel might not be suitable for your spreadsheet needs.
If you’re not well-versed in computers, you may believe that Excel (or Google Sheets) is the sole way to store data. After all, the latest versions of Excel have 16,384 columns and 1,048,576 rows, totaling a whopping 17,179,869,184 cells.
While this is a lot of data, keep in mind that your computer will download it all at once. Therefore, if you’re using a lot of cells, you can expect your PC to run slowly. Having a hundred, or even a thousand, rows won’t be a problem.
Even powerful computers will struggle to load a file if you keep compiling data over the years, or if multiple users are adding information to one file. This is because Microsoft loads all the data when it opens the file.
Although this is useful for analyzing short-term data, if you only need to analyze specific information, it wastes computational power. If you only require a customer’s email address, for example, you don’t need to load the rest of your client database.
Dedicated database software or services are a good alternative for storing data. They have many of the same functions as Excel, such as data analytics, but they have even more functionality. If you like the Microsoft Suite, you can use Microsoft Access or a free alternative such as LibreOffice Base.
Complex Data Analysis
Excel has a large variety of formulas to choose from. It offers the simplest sum formula to complicated functions such as net present value (computes for the time value of money) and forecast (used to calculate future values).
However, if you frequently find yourself making multiple, complex functions, it’s time to look into other solutions. Excel is an excellent tool if your formula’s variables are all based on raw data. However, if you find your functions are based on cells that are formulas themselves, consider using dedicated analytics software.
If your spreadsheets rely on multiple formulas, the added layer of complexity means it’s easy for errors to go undetected. Even if you do uncover errors, tracing them is difficult when your formulas are three lines long.
Instead of using Excel for these complicated scenarios, try learning a programming language like Python. It’s simple to grasp, and there are several free resources available to get you started. And if you’re not inclined to study programming, you could also use dedicated data analytics tools that are much easier to use.
Financial Data Analytics
Every finance department understands how difficult financial analytics can be. Regardless of the type of financial analytics you are performing, it requires big data to ensure accuracy, timely execution, and of course, monitoring.
If you’re using Excel to track financial data, you’ll almost certainly need to link to multiple sources. These sources can be other Excel files, online databases, and even financial websites. However, as you add these, the likelihood of making an error or receiving obsolete information increases.
There was even an incident in 2012 at J.P. Morgan, where a formula accidentally used price sums instead of their average when computing for risk. This, in turn, gave a result about two magnitudes lower than the actual value and caused the bank to lose $6 billion in trading.
While there are other challenges at hand, this miswritten formula is part of the chain of errors that resulted in such a massive loss.
Instead of using Excel for financial data analysis, consider implementing a financial planning and analysis (FP&A) solution that works with Excel.
By replacing spreadsheets with real-time data and integrating fragmented workbooks and data sources into one centralized location, you can work in the comfort of excel with the support of a much more sophisticated data management system behind you. This takes financial forecasting from time-consuming to rewarding.
Many professionals utilized Microsoft Excel before the arrival of specific project management applications like Asana and Trello. It is, after all, simple to set up. There are even downloadable templates available to help you get started.
However, as your team grows and you begin to take on more projects, things become more challenging. Your team can’t utilize your project management file at the same time unless you use the online version of Excel. And when you add more tasks and subtasks, you might end up with too much information in one sheet.
Furthermore, as more people have access to the file, there’s a greater chance for an unintended mix-up. They could inadvertently change a formula or even erase vital data. Creating and assigning project dependencies can also get confusing.
That’s why, when it comes to managing your team, it’s preferable to invest in a dedicated task management tool. Purpose-built apps will give you and your team a clear picture of all that has to be done. You can even designate certain members to specific tasks to ensure that nothing is overlooked.
And if you’re on a budget, there are various price ranges for project management tools online. Now you can keep everyone on the same page without breaking the bank.
Because of its easy availability, Excel is often used as a form. There have been many instances where events and gatherings have used laptops and Excel files for guest registration.
Using Excel (or any spreadsheet) as a form is convenient because the organizers can directly analyze their data. This, however, has a number of disadvantages.
- For starters, you wouldn’t be able to control the data input. Anyone could type in incorrect information, and you would be none the wiser. There’s also no data standardization. A person could type in New York under state, while another would write NY. This is problematic during data analysis.
- Secondly, if you have multiple registration sites, you would have separate datasets that require consolidation. This is time-consuming and may result in data inaccuracies. This could also lead to duplication of effort since users may enter their data twice.
- Third, there is no data privacy. Anyone with access to a spreadsheet can scroll through the entries and gather data. They could even tamper with existing data, skewing your results. If a data leak occurs through your Excel registration, you could be held liable.
- Finally, as previously indicated, Excel is not ideal for huge databases when used for online registration.
Utilize Dedicated Software
Microsoft Excel is an excellent spreadsheet. It’s ideal for small data sets or proof-of-concept projects. But if you want to scale your work, you should consider dedicated software.
Using software developed specifically for your purpose will give you better functionality, work faster, and allow you to get things done more efficiently. While some of them will cost time or money to set up (or both), they will save you money in the long run.