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Excel And The Road To Information Visibility

by Lyndsay Wise, President, WiseAnalyticsTuesday, October 20, 2009

Over the years, the role of business intelligence (BI) within organizations has evolved to help businesses increase the level of insight they are able to achieve on a daily basis.  The use of Excel has survived throughout BI’s journey to become one of the central ways the BI community collects, stores and manages information in order to gain deeper insights into what is occurring within the organization.  Although a powerful tool with the ability to analyze data while maintaining analytic autonomy, there exist downsides to using Excel as the main source of business intelligence.

This article discusses the role of Excel and BI, including why Excel has become the de facto BI choice for many organizations and why they should question the validity of Excel as a main tool used for business intelligence.

Excel taking on the role of BI

The main advantages of using Excel as a key tool for daily analysis are threefold:

  1. Excel is already widely deployed and accessible throughout the office so there's no need to deploy additional budgetary or people-related resources
  2. Due to this accessibility and perceived ease of use, overall expertise is high
  3. Interactivity enables end users to explore information and extrapolate hypotheses in an easy to use environment

The use of Microsoft Office is widespread. This means that end users seeking tools to help guide them with the day-to-day operations related to their responsibilities will look at using these tools because they are the ones that are most easily accessible to them.  Excel, therefore, offers easy access while being one of the most used tools. In a sense, Excel has always been the main BI tool adopted by organizations.  However, as BI solutions began to expand and become more widely deployed, the questions surrounding the accuracy of data and the development of a centralized way to access and use information became quite common.  These questions gave way to skepticism related to the validity of using Excel as a main BI tool.

Even with these doubts, the fact remains that people’s behavioral patterns are difficult to change.  Comfort with Excel leads business users to use Excel without considering other options.   With Excel providing simple analysis tools within their spreadsheets, end users have been able to develop their own use of solutions without having to rely on others.  Autonomy enables people to feel like they can get value in the way that best suits them while providing the information required by management and C-level executives. 

The ability to interact independently and slice and dice information easily lets end users identify possible gaps, opportunities and issues.  Couple this with ease of use and it becomes difficult to convince people that there is a better way to analyze and develop insights.  After all, the promise of a low-cost tool that requires little training and that provides a wide variety of benefits to organizations, seems like a sure thing.  So, then what are the down sides to using Excel expressly as a BI solution?

Questioning the validity of Excel data when used for BI

The common example of directors at a board meeting discussing their performance, expenditures, sales, etc. with PowerPoint presentations using data from Excel, with each director having different data, is a sad reality within business.  Although the discussion of data management and developing a centralized view of information remains unpopular for organizations that lack resources to implement data-management initiatives, the management of data is an essential aspect of successful BI.  Unfortunately, the use of Excel on its own does not empower businesses to develop or to maintain a successful data-management or data-governance project. 

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