Why you shouldn’t use Excel for your Data Analytics
Nowadays organisations of all sizes are appreciating the value and importance of big data to a number of different departments within their business, from human resources all the way through to internal audit. But this new-found appreciation for data analytics does not automatically lead to a new-found understanding of just which tools are the best for the job. As a result, many organisations are using spreadsheet programmes (like Microsoft Excel) in order to compile, and then try visualise, their data in a way that can be understood by the people who need to see it. In fact, some surveys suggest that as much as 20% of business are using spreadsheet programmes as their main data analysis tool.
Whilst there’s nothing wrong with spreadsheets per se, data visualisation and communication is not their strong suit, and this can have dire consequences for the morale and job retention of a given organisation.
According to a survey of 2,000 US and UK employees:
- More than 80% of company employees said that they want management to share more information with them about business performance.
- Over 25% of employees saw company KPI data less than once every three months, if at all.
- 25% of employees have, or know someone who has, left an organisation because they felt in the dark about the organisation’s performance or direction.
- Over 50% of employees said that regularly and openly shared information about the organisation’s overall performance provided a significant positive impact on their productivity.
That last point is key: “regularly and openly shared information about the organisation’s overall performance provided a significant positive impact on their productivity.” This desire to know more about the company’s performance applies even when the news is bad, with more than 90% of those polled stating that they would rather hear bad company news than be left out of the loop.
All this goes to show the need for organisations to invest in a strong and flexible data analysis tool which allows companies to accurately and easily visualise their data, but why exactly isn’t Excel up to the job?
One major benefit of many recognised data analysis tools, like AuditWare’s very own IDEA Data Analysis software solution, is the built-in visualisation facilities on offer.
In spreadsheets you’re presented with a single view of the raw data, all at once. It can be difficult to interpret what is, and what isn’t important, which defeats the point of sharing the information in the first place. Data visualisation tools provide a flexible, yet reliable way of identifying the pertinent information and presenting it to your target audience in a manner they can easily understand.
Data acquisition and integrity
Spreadsheets are one of the most popular tools for data compilation because they are both familiar and convenient. Most spreadsheet applications, however, aren’t designed to handle large data sets, automate analysis or import data from a variety of sources—all functionalities that auditors and other financial professionals often need. Cleaning up these large data sets can also be time-consuming and tedious, not to mention that it’s easy for errors to be introduced into the data during the clean-up process. With the limited import abilities spreadsheets offer, processing times can often be very slow.
Programmes like our very own IDEA Data Analysis software allow users to quickly and seamlessly import data from a significant variety of formats, whilst also protecting the source data from accidental or intentional corruption.
When using spreadsheets, it’s easy to alter data values accidentally or intentionally. Errors in formulas can also make your analysis logic prone to mistakes. Finally, because spreadsheets can be regularly emailed and shared with other users within an organisation, there are risks associated with the retention and reliability of information, such as conflicting copies, duplicates or edits. You could always keep hold of the data, but if you’re trying to keep your employees apprised and in the know, ensuring the integrity of the data is vital.
Historical Data loss
Spreadsheets are not appropriate for historical data storage. When updating the figures in a given cell, any record of what that cell contained before is immediately and permanently lost. Such huge data loss creates problems in data analysis and auditing, making it quite tough to identify trends and evaluate performance without relying on multiple copies of the same spreadsheet from different periods. This can introduce a whole new set of problems when taking data integrity into consideration.
Data Analysis tools like IDEA are designed to create an audit trail that records all changes and operations carried out on a database, including file and format imports, types of analysis performed and results created. This information resides within the file properties and can’t be changed, so you can have greater assurance in your results and an auditable record of changes to your data for the purposes of historical comparison.