Spreadsheets are a powerful tool and very inexpensive. Compared to most software, they seem nearly free. That's why most businesses use a spreadsheet as their tool of choice for working to solve most problems and run many of their strategic projects. Companies use them for project management, financial management, data analytics, task lists, and so many other purposes that I can't even list them all. While spreadsheets are inexpensive and easy to get things started with, they pose a problem for our businesses as we grow. Have you outgrown your strategy spreadsheet? What is the ROI of replacing it with a system?
The problem with spreadsheets is that while they seem inexpensive and convenient, the labor involved in creating and maintaining them is not. Spreadsheets don't just magically do whatever you need them to do. They are a blank canvas that a spreadsheet artist must craft. To truly get that spreadsheet right takes time from your most expensive assets: your people. Even the most detailed excel templates require hours of customization.
You must build them, craft formulas and references, format output, and maintain them as the business changes. This takes time and that time costs money. Lots of money. If you start adding up the cost of that time daily, weekly, and monthly, you will find that you are spending more on your spreadsheet creation and maintenance than you would on best-in-class software crafted to solve your specific business problems. I've worked with clients where staff members devote several days a week of their time creating and maintaining spreadsheets. Several days a week! That's nearly half a work week for a highly paid, highly skilled team member.
Not only that, you need to factor the opportunity cost of this time. What growth goals could you have achieved with the time your people spent creating and maintaining your spreadsheets? Instead of programming rows and columns, they could have been formulating and executing against strategic
growth goals for the business. Wow! What a change in mindset that would be!
A spreadsheet is a computer program. They are usually created informally and lack the core elements of professionally developed software. Elements like good requirements gathering, design, and testing for quality assurance by multiple parties. They also lack documentation and product roadmaps for future improvements. So when the staff member who created the spreadsheet leaves, all that problem domain knowledge goes with them.
So that's enough about the problem. What do we do about all the spreadsheets we have and run our business on today? How do we break free from spreadsheet slavery and direct our energy and time toward growth?
I suggest searching out systems that replace what your home-grown spreadsheets are doing for you. Invest in good project management software, good financial management software, good CRM software, a good Business Execution platform like our Rhythm System. You may think that the cost is too high to buy software, but you are fooling yourself. You are actually paying much more in payroll cost, productivity loss, and opportunity cost than you ever would for professional software license fees. Spreadsheets have their place, but strategic plan execution isn't one of them.
So, start working on a plan today to understand the spreadsheets you are currently using and why. Then put in place software and processes to replace what your spreadsheets are doing for your business. You will see immediate ROI in your investment in these systems and processes and free the minds of your team to direct their energy and time to achieve your goals and dreams of growing the business.
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Photo Credit: iStock by Getty Images
Photo Credit: iStock by Getty Images