Karl HindleKarl Hindle initially trained as an accountant with Arthur Andersen, and remembers the first time he saw a spreadsheet in the Eighties, but argues today that they are increasingly obsolete in the Age of Big Data, the Internet of Things and Digital Transformation.

 

I remember back in the mid-Eighties as a rookie accountant with Arthur Andersen, being introduced to what looked like a slightly larger version of my grandmother’s sewing machine. As the bottom “lid” was unclasped from the main part of the body, it became the keyboard to the first ‘portable’ computer I’d ever seen, and the first program I was shown after the initial boot up, was a spreadsheet.

Everyone in the room was stunned and amazed at this thing, but more so with the spreadsheet – remember, we were a bunch of accountants and management consultants, raised on calculating IRR, NPV, and performing sensitivity analysis in an insensitive way.

Now we had something that could do it all with very little upfront setup, and ‘iteration’ and ‘Lotus 1-2-3’ entered our daily lexicon.

Spreadsheets – Holy Data Manipulation Batman!

batman robin math joke

Fast forward thirty years to today, and we find spreadsheets all over the place. They have become the “drug” of choice for people trying to get organized, running processes and task management via Excel. Spreadsheets are being wrangled to do far more than was ever envisaged when they were first produced, and the limitations of Excel & Co. in the modern, Big Data-generating, Big Data-driven business world are becoming all too obvious.

Data Integration

We all have lots of data lying around our organizations, and it’s not all living in spreadsheets (though there is a lot of this too), but rather in the Cloud, in On-Premises servers, laptops and Mobile devices, and pretty much everywhere else. The issue is gaining access to this data, across your organization, and being able to gain meaningful insight from it to form actionable recommendations.

You cannot do this with a spreadsheet: data-generation is mushrooming across the board, and with the Internet of Things (IoT), this is only going to accelerate.

Collaboration, Compliance & Control

Sharing spreadsheets amongst co-workers, on a shared drive, passing a file around via email, or using a cloud-service such as Google Docs, is a very basic form of collaboration. This scenario is extremely limiting, and you’ve probably experienced why for yourself – version control is almost impossible, recording who did what and when is useless, and you never know if you are actually working or looking at the latest version, or if multiple people are working on the document at the same time.

Spreadsheets do not provide a sophisticated platform for work to flow through a process, in an efficient, logical and controlled manner. Instead, as processes become complex or the volume of work stresses your team, spreadsheets cause people to trip over one another, duplicating effort, losing work already done, creating frustration while providing very limited and basic visibility into work.

This is collaboration, control and compliance management in the style of the Marx Brothers.

marx brothersSecurity

As I was researching this, I realized I had never, ever password-protected a spreadsheet. In fact, I don’t think I have ever encountered a password protected spreadsheet. That should say something for the level of security attaching to them, because I am also very sure that the bulk of readers are in exactly the same position as I’m in.

There is very little done with regards to security of data contained in spreadsheets. Even if they are held on a network or Cloud drive somewhere, the reality is they are emailed frequently, and copied onto a range of Mobile devices and other storage mediums, with almost zero control.

How many of you have spreadsheets containing customer data? Sensitive financials? Operational data?

And how much would it hurt for a competitor or criminal to get their hands on it?

Reporting & Dashboards

Excel has some neat reporting features, but realistically, their charts, pivot tables and so on are now dated, but more importantly, they are unable to handle Big Data visualization. The inability to handle data at current levels, also means they are not cut out to be the business dashboard you need today.

Spreadsheets comprehensively fail to integrate large data sets from multiple channels, and attempting to make them do it is invariably time-consuming and unwieldy. There is simply too much variety in the existing and emerging data sources generating information to be handled this way. It is also extremely difficult to shoe horn data into something which does open the door to manipulation and analysis. The practical reality is that smaller data-subsets tend to be used, but this leads to increasing margins of error which are increasingly intolerable in a Big Data/IoT environment.

For these reasons, spreadsheets are very limited when it comes to reporting on a what is happening within your organization.

Source: Martin Hilbert

The Information Explosion & The BLOB

A perfect storm is being created with affordable IT and the ability to collect data plus increased access points from which data can be collected. We may be used to thinking in Gigabytes (GB), and larger organizations at the turn of the century may have had a Terabyte or two of data to play with, but what happens when you are playing with hundreds, thousands or even millions of times those amounts?

Business Intelligence (BI) and traditional data analytics fail at such volumes, while the humble spreadsheet will not have anything but a very vestigial role in this arena. However, if you have not equipped your organization to handle the data explosion, you are likely to experience slower growth and return on capital than those of your competitors who do.

A further issue is that data is frequently being made up of BLOBs – Binary Large Objects. BLOBs can be images, video, audio, or other rich media, and cannot be managed by a spreadsheet in any form. Analysis in such instances requires a very different approach to a spreadsheet layout of rows and columns if meaningful analysis is to be carried out, and some sense of what the data is trying to show you can be made.

the blob

Summary

I have touched on some of the major limitations of spreadsheets in this post, but the truth is that there are many more. As Big Data and the IoT continue to drive the generation and collection of information, spreadsheets will become more irrelevant. Security of information stored within spreadsheets is a major concern too. For organizations to move forward and improve on the benefits spreadsheets once gave us, we must adopt and become proficient in the use of new data collection, management and presentation tools.

Just as computers have moved ahead from that dinosaur of a portable computer I first encountered all those years ago, so must spreadsheets. None of us would consider running any part of our organizations on this:

compaqI

The Compaq Portable with a 9 inch monochrome monitor, 128K (Kilobyte) RAM, weighing 28 pounds and two floppy disk drives (320K 5.25 inch) and the source of multiple cuts and bruises as they were ‘ported’ around London by this once young auditor.

 

 

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