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Are you using Excel to fill the gaps in your ERP?

Excel is without doubt the most widely used piece of ERP software in the world! It’s low cost, general availability and ease of use make it a popular choice for businesses across the world. But just because it’s easy and inexpensive, it doesn’t necessarily make it the best ERP solution.

In fact, as you’ll see from just a selection of stats, it’s far from risk free!

A report by Ray Panko, a professor of IT management at the University of Hawaii, found that 88% of spreadsheets contained errors.

Coopers and Lybrand found that 90% of all spreadsheets with 150 rows or more contained errors.

In a sample of 22 spreadsheets KPMG found that 91% contained errors.

The problem is so widespread that groups like the European Spreadsheet Risks Interest Group have been set up to try and stamp out these kinds of errors. They’ve even got their own section of excel horror stories.

Not very comforting when you think that Excel is used for more than half of all financial reports worldwide! Even less so when you also consider that a lot of businesses with incomplete ERP systems are using Excel to fill the gaps. Even companies with a modern, fully integrated ERP application are at risk.

A company recently discovered accidentally that certain production data hadn’t been included in the financial admin for years. As a result, deliveries to customers didn’t get invoiced and they lost hundreds of thousands of pounds. The cause of the problem? A macro in Excel didn’t copy every line of the spreadsheet.

On a much larger scale, a poorly constructed Excel spreadsheet was cited in the JPMorgan ‘London Whale’ trading scandal as leading to their $6 billion trading loss.

A macro is a form of programming. Have you ever considered how many, if any, of your Excel users have received serious training in the creation of macros? Information is being inputted, very often in multiple, disparate spreadsheets repeatedly every month and updating anything manually carries a serious risk. Are you absolutely certain that your staff are completely confident about what they’re doing?

According to Ventana Research only 11% of users truly consider themselves to be “power users”. Most rate themselves as adequate and can’t really confirm what formulas they use.

How is Excel used in your business? Do you know how intensively it’s being used?

Before you think that this is turning into an Excel-bashing article, we recognise the fact that it can be a powerful tool when it comes to reporting. The problems occur when it’s being used for the wrong reasons or beyond its capabilities.

Using Excel to fill the gaps in an ERP system that hasn’t evolved with the business, or to connect processes that don’t currently ‘talk to each other’ automatically is a risky business.

An interconnected ERP system that’s been specifically designed for your industry sector will always be the best answer. Software solutions like Microsoft Dynamics 365 Business Central can make sure that all processes and departments are singing off the same spreadsheet (so to speak), ensuring that there are no cracks in the system. Excel documents can still be used to input data but the information will now be visible to everyone and interact with any and all data that it relates to.

Rather than being the equivalent of plastering over the cracks in your reporting system, Excel should be one aspect of a much larger, intelligent, interconnected, unified ERP solution, improving efficiency, productivity and ease-of-use across the business.

If you want to find out more, get in touch with one of our team.

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