5 Reasons to Stop Using Spreadsheets for Managing Projects
Spreadsheets can have a time and a place in the project management process, such as for noting down simple calculations, but using spreadsheets for all tasks can be an unwise and costly choice to make. By using spreadsheets, you’ll be limiting the creative process, increasing the chances of human error, wasting time and, ultimately, losing money.
Here, we count down five reasons why spreadsheets are not beneficial for managing projects and provide some simple tweaks and alternatives that will streamline the project management process.
1. Human Error
Topping the list of the many reasons why spreadsheets are not beneficial for project management is that errors are incredibly easy to make.
In fact, one study reveals that approximately 88% of all spreadsheets contain at least one mistake that is due to human error. There are no clear formatting rules in spreadsheets so formulas can be expressed in multiple ways. Throw in human error when it comes to data input and you have a recipe for inaccuracy.
These human errors have led to a number of high-profile blunders over the years. In the London Olympics, a simple spreadsheet error meant that 20,000 tickets were sold for a swimming event instead of the allocated 10,000. Ex-Chancellor of the Exchequer, George Osborne, made a serious error when he missed a few rows on his government spending costs, which drastically miscalculated growth.
Perhaps one of the most costly spreadsheet mistakes in history goes to JP Morgan. A simple mistake was copied and pasted over multiple spreadsheets which lowered the perceived risk of assets. This led the company to take huge risks based on inaccurate data. That year JPMorgan had losses of $2 billion, much of which was blamed on the inaccurate hedging strategy that was down to that spreadsheet error.
Errors caused by incorrectly copying formulas, data input mistakes and misuse of spreadsheet functions will be detrimental to almost every step of the project management process.
2. Collaboration Issues
A vital part of successful project management is to be able to collaborate with team members for quick sharing of updates, progress reports and so on. One major setback of most traditional spreadsheets is that there are limits on collaboration options. Spreadsheets are designed to be used solo, so they often get emailed, which can result in getting lost in an inbox as well as raising some concerning data protection issues.
3. No Real-Time Updates
Another issue that ties with the collaboration issue is the lack of real-time, or ‘live,’ updates. Fast-paced project management projects require instant updates on the process, something which many traditional spreadsheets do not typically allow. Instead, spreadsheets have to be emailed, and updates often have to be communicated separately, leading to more data errors and communication issues.
4. Creative Limitations
Spreadsheets make it near impossible to view other components which are essential in the project management process. Things like images, graphs and attachments typically have to be stored separately to spreadsheets, which mean that yet more time is wasted searching and opening these things in different places. Project management software allows for attachments, making it simple to see or access all facets of a project in one quick glance.
5. Difficult to Analyze
If the above isn’t reason enough to ditch the spreadsheets, then this final step may just tip the scales for you. Spreadsheet data can be incredibly difficult to analyze. For starters, users will only see raw data, which can lead to misinterpretation. While some visualization tools may be possible in spreadsheets, often they are made in error as data is not fully understood. Exportation options are typically limited, and thus data cannot work to its full potential.
What Does This Mean?
Simply put, spreadsheets provide a messy and inaccurate way to store and share data. Hopefully, this piece has indicated their limitations so you’re more aware of how to make them work for you. Choose only to use them for simple tasks or small project calculations. Choose cloud-based apps, which enable easy exportation and data visualization, and software that is able to handle customization for more accurate data collection and formulation.
For processes where you still want to use spreadsheets, you can educate staff about the top mistakes with spreadsheet usage and how to avoid them. Training staff in correct formatting will also reduce human error.
Luckily, there is a whole host of free and low-cost tools that have come on leaps and bounds from the traditional spreadsheet. Tableau takes data visualization to the next level with desktop and cloud-based options for their popular analyzation product utilized by small businesses and large corporations alike.
Wink Reports is also proving to be a valuable tool for business owners who are looking to up their data visualization processes and increase business performance. Wink reports allows you to connect multiple sources to create custom business dashboards, and with a range of integrations (including APE Mobile), it’s a cost effective tool for business intelligence.
Communication is key in project management, so making the switch to more advanced options will be sure to save you time, hassle and money in the long run.