The Eight Hidden Costs of Spreadsheet Culture

Neal Ellis Project Management • Software • 4 minute read

It's a common phenomenon. "Spreadsheet culture" - built on the belief that work can be managed, decisions can be made and whole companies can be run using hand-maintained data, plotted into rows and columns, kept in static files.

Chances are you rely on spreadsheets to get some of your work done. You may even get a special kind of satisfaction from a well-organized Excel file. In the world of project management, there are few tools as ubiquitous and deeply embedded as the spreadsheet. 

Our focus is on driving business results through positive change, and this spreadsheet-dependence represents a huge growth opportunity for many companies. To break it down into specifics, we identified 8 hidden costs of spreadsheet culture - take a look and consider if these might be affecting your work, or holding back your whole company.

Whose file is it anyway?

1. Collaboration
It's messy, to put it mildly. A spreadsheet is not designed for simultaneous use by whole teams or between multiple companies, and as a result collaboration suffers. Files get emailed back and forth, versions have to be managed, and new information is opaque until everyone receives, checks or updates the latest copy of the file.

The 10,000-piece puzzle.

2. Consolidation
Like a complex puzzle, a spreadsheet is usually built by collating multiple sources information, and that process requires a lot of work. Usually different kinds of data need to be sourced, combined, converted, and organized, and this task is often recurring to keep the spreadsheet current. Reconciling multiple or conflicting versions of data adds to the challenge, as does trying incorporating feedback or input from colleagues.

Which way to success?

3. Process
Spreadsheets are not inherently structured or informative - they require users to input the right data, and then design, maintain and follow a thoughtful organizational system. Because of this, users are forced to be systems designers, and the results depend on constant user maintenance. Business processes easily deviate or break down, and making changes is often a laborious, complex job.

A picture is worth a thousand cells.

4. Visualization
For number-crunching and reporting, a neatly organized spreadsheet is often ideal. However humans perceive information in different ways, and raw data presented in rows and columns is not very effective for evaluating relevance or understanding meaning. A well-designed visual system can take your information and quickly show you what data is interrelated, where the patterns are, what is most important, and what opportunities exist. And visualized data is often more intuitive to navigate and make use of everyday.

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5. Integrity
Spreadsheets are ad-hoc systems that rely on constant user-maintenance, often populated on-the-fly and through unstructured processes. As a result, the precision and timeliness of the data can suffer. It can be hard to ensure data is up-to-date, errors are difficult to both prevent and detect, and establishing the source of truth problematic when people are sending multiple copies of the same spreadsheet back and forth.

A complexity multiplier.

6. Scalability
Even in small teams, a spreadsheet represents a fragmented collaboration model built around static files and hand-managed data. But when companies expand, or as projects get more complex and timelines accelerate, the spreadsheet approach quickly becomes untenable. Large data sets can be difficult to manage by hand, interrelated data is hard to coordinate, and people at every level of the organization struggle to access the data they need to do their jobs.

Where's the un-send button?

7. Security
The information and processes at the heart of your business are high value, and often mission-critical. Depending on spreadsheets to manage and distribute this data can be a major liability if a file gets corrupted, lost or shared inappropriately. Many companies lack robust oversight for ownership, permissions and access, and with collaboration across organizations, and people working remotely, control is easily lost.

Twice the work, double the time.

8. Time
Managing data in spreadsheets can be akin to using a crude, amateur-designed database – often inefficient, labour-intensive, and constantly requiring adjustments for new kinds of information. The more complex your data gets, the more time consuming it is to structure and maintain, and finding the right information grows increasingly cumbersome. All 7 preceding points in this list reveal time lost through inefficiencies.

The take-away

While spreadsheets certainly have legitimate use cases, it's important to recognize their limitations and hidden costs. A frank examination of your company's spreadsheet culture can actually lead to a greater understanding of your business needs, and to the adoption of more appropriate software, tools or solutions.

This not only will help you avoid future problems, but can also foster better decision making, richer collaboration and a new level of productivity.

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