The Risks and Limitations of Leveraging Excel for Data Management

Spreadsheets are a popular tool for storing and managing data. In fact, a majority of companies use spreadsheets for at least some of their operational workflows. That’s not surprising, given the application’s more than 30-year history. It can seem like the go-to choice when starting a new project, but it’s important to consider the risks and limitations of using Excel as an online database.

Just a few clicks of an internet search reveals infamous horror stories about Excel spreadsheet errors that led to steep losses, like the one that forced JP Morgan to declare $6 billion in losses. So before you entrust your data management to this legacy tool, it’s important to understand the risks – before that seemingly go-to choice gives you a data headache, and puts your business at risk. 

While Microsoft set a new industry standard with the release of Excel three decades ago, recent advances in database technology have enabled powerful, secure and easy-to-use database apps that Excel, or any spreadsheet tool, simply can’t match.

The Risks of Relying on Spreadsheets for Data Management

Spreadsheets lack critical capabilities that help ensure data security and data integrity, and have gaps that cause significant productivity leaks due to manual data input, frequent validation checks and manual data manipulation and analysis. Being aware of the pitfalls associated with spreadsheets, and knowing how to avoid them, is key to keeping your business on a solid foundation.

 1) Spreadsheets Lack Critical Data Security Features

Data is the lifeblood of your business. As more business and operations move online, and more employees work from remote locations on a variety of devices and networks, taking steps to strengthen your organization’s data security has never been more important – or complex.

 When you put your trust in spreadsheets for data management, your business is vulnerable on all sides. Spreadsheets lack advanced (and necessary) security controls to keep your data safe. The risk runs the spectrum from limited password protection and a lack of encryption capabilities to the inability to assign role-based user access, and only bare-bones audit features that leave too many blind spots to effectively track and manage changes.

 You can avoid these data security pitfalls by trading your spreadsheet for a no-code database app. Cloud-based database apps are designed from the ground up with security in mind. They offer robust capabilities to keep your data safe and accurate. From encrypting data and passwords to powerful role-based user access permissions and history logs to manage version control. And, cloud-based database apps are hosted on secure servers and regularly updated to protect against new security threats.

 Ensuring the security of your data is much easier when your data lives in an online database app. Unlike spreadsheets, database apps offer end-to-end security features and customizations that let you build to your exact requirements and workflows. You can stop worrying about security and focus on running your business and streamlining your operation.

 2) Spreadsheets Provide Limited Data Integration Capabilities

 Spreadsheets tend to expand, multiply, and quickly become unwieldy. What started as a sheet to run simple calculations for an item like product inventory or to track a list of business contacts may have morphed into an assortment of spreadsheet tabs, files and versions. It’s a common operational problem, especially as you scale up your data collection to track and manage more of your business details and results. 

Because of limited data formatting and transformation capabilities, you can’t easily integrate the data living in your spreadsheets. You also can’t connect spreadsheets to other data sources or systems to get the full picture of your operation. In reality, spreadsheets are cumbersome data silos that block you from generating valuable business insights.

 By moving to a cloud-based database app, you can avoid the data integration pitfall of spreadsheets. Many no-code database apps include  API access so you can connect your data to other important services and data streams. Finally, you’ll have the business intelligence you need.

 3) Error-Prone Spreadsheets Jeopardize Data Integrity

 Even when following best practices, spreadsheets are naturally prone to errors and omissions. In fact, research shows that up to 90% of spreadsheets contain errors that affect results. Manual data entry makes it easy to introduce mistakes. This is especially true when dealing with complex formulas, a large amount of data, or multiple users. Each entry or manipulation of the data increases the odds of an error. And even small errors can significantly skew the analysis you depend on for decision making.

 The problem grows when you add up the productivity losses that come from trying to minimize the potential for errors. Users are forced to spend time manually checking and rechecking data and formulas when a spreadsheet is created or changed. Even with careful attention, errors still occur and can be difficult to detect and correct, especially with multiple users involved.

 To avoid data errors, and gain rather than lose productivity, make the move from spreadsheets to no-code database apps. Unlike spreadsheets, database apps include critical quality controls, which improve the accuracy and reliability of your data. Tools include history logs to audit, track and manage changes and protections like the ability to assign specific data types to each field so a user won’t inadvertently enter a phone number in a column meant for names.

 Online database apps provide a robust and reliable data management solution that spreadsheets can’t match. And look for a library of free app templates to jumpstart your transition.

 4) Spreadsheets Lack the Scalability To Keep Pace With Business Growth

 Spreadsheets are problematic when it comes to scalability. As your business grows, your data grows and becomes more complex. More users are involved in entering and analyzing the data. Spreadsheets aren’t designed to handle large volumes of data and aren’t well-suited to working with complex data structures or relationships.

 Data management via spreadsheet makes it increasingly difficult to keep the data secure or to analyze it and gain meaningful insights for your business. And over time, it continues to get worse as spreadsheet versions proliferate and changes get out of sync. Time is wasted trying to corral data back into one spreadsheet and performance is bogged down as data expands.

 You don’t have to suffer with the scalability limitations of a spreadsheet. No-code business apps are designed to scale and have advanced capabilities for handling large volumes of data and users. They put you in charge, with robust and intuitive features for organizing your data, and defining the connections and relationships that make sense for your data types and operational goals.

 5) Spreadsheets have Limited Reporting and Analysis Capabilities

 The full value of your data is wasted without reporting and analysis capabilities that turn data into powerful insights that can drive improved operational results and business growth.

 With spreadsheets, you miss key take-aways your data could provide. Formulas and macros can generate specific answers but lack the data visualization and reporting capabilities needed to uncover the full story and bring it together in at-a-glance views. And building charts and graphs to display trends is cumbersome and time consuming, especially since the data must be updated and refreshed to keep the views current. It’s significant work for minimal business intelligence.

Don’t track your data only to lose the important and actionable insights.

 Moving to no-code database apps for your business gives you the data visualization and analysis tools you need. Define real-time dashboards for key user roles and even automate reports and trigger actions based on parameters and thresholds you determine. For example, automatically generate a purchase order when inventory drops below a predefined threshold. Or, automate real-time sales and service assignments based on specific interactions with prospects or customers.

 Using an online database app, you’ll get flexible reporting options and intuitive dashboards to fuel data-driven decisions.

Migrating from Excel Spreadsheets to an Online Database App: A Step-by-Step Guide

1. Determine your goal and use case. Before taking action on data migration, it’s important to identify the overall goal for your online database app and the specific use case and workflows it will replace or streamline. For example, your goal might be to improve collaboration. If so, you’ll want to identify who will use the new app, what their roles will be and what data they need to access. Maybe the migration is focused on the need for better data analysis and reporting, which will help you determine the datasets to migrate and how to structure them. Or, the goal could be around improving and automating workflows, which will drive the capabilities and integrations you’ll want to include, such as electronic signatures or two-way email and text communications. A clear vision of the end goal will guide your migration and also help you measure the success of your initiative.

2. Understand your current data structure. Review your spreadsheets in detail to analyze the current data in your Excel spreadsheets. Look at the data types and formats. Are there specific columns that represent categories of data? Are there calculations and formulas that need to be replicated in the new database? Also, pay attention to the relationships between your different datasets. Do you have data duplicated across multiple spreadsheets, or separate spreadsheets linked through common fields? Identifying and understanding the relationships in your data is critical, as is looking for data and process gaps and problem areas that can be corrected in the online database to make your workflows more efficient and scalable.

3. Plan your new database structure. Now it’s time to translate your current Excel-based data structure into a more robust, flexible and scalable online database format. Start by defining your tables, each will hold a category of data such as, customer data, sales data or inventory data. Once you’ve defined tables, determine the field – similar to columns in Excel – for the data points you’ll track. For example, a product inventory table may track, product name, product ID, product price, and current inventory. Next, you’ll map out the relationships between your tables and the connections you’ll need in your database. For example, a sales record might link to specific customer, product and vendor records.

4. Build your database structure in the app. Now, build the structure into your database app. Leverage the apps visual builder and drag-and-drop tools to quickly and easily create your tables, define fields and establish connections. You’ll also specify the type of data each field will hold – like text, numbers or dates – and set up validation rules or restrictions to prevent inaccurate entries. For example, you might want to ensure that an email field always contains a valid email address and a date field always contains a date in the future.

6. Clean and prepare your data. Check your data for errors, inconsistencies and duplicates, and make corrections before transferring your data to the database app. In this data cleansing step, ensure data is in a correct and unified format for each data type, remove anything that’s outdated or entered more than once. For example, dates and addresses should be in a uniform format across all records. Consistency makes it easy to import your data into your new database. You might need to save your Excel data as a CSV file or another acceptable format based on the requirements of the database app.

7. Import and validate your data. Use the tools and capabilities offered by your database app to smoothly import your data and map the columns in your data file to the corresponding fields in your database. Once your import is complete, compare your database with the original data in your Excel spreadsheet to ensure the migration was successful. Also, test your data relationships and any new features or functions you’ve added during the database design process.

8. Implement data security measures. Protect your sensitive business data from unauthorized access and potential data breaches. Leverage the robust security features of your database app like data encryption, secure user authentication and activity logs. Make sure the features are configured correctly to provide maximum security for your data. Next, establish granular role-based user access by defining different roles or user types and assigning specific permissions to each role. This ensures that users can only access and manipulate data that is relevant to their job function and reduces the risk of accidental data changes, deletions or data privacy violations.

9. Build custom web applications to meet your specific use cases and workflows. With your database in place, you can leverage your app’s builder tools and pre-built templates to create applications and define custom reports and at-a-glance dashboards to gain efficiency and business insight for better decision making.

From Legacy Data Management to Digital Transformation

While Excel has been a trusted tool in many businesses for years, its limitations become apparent as a business grows and evolves. The impact of underutilizing your data can’t be underestimated. The migration from Excel spreadsheets to an online database marks a transformative milestone in data management – and data-driven business intelligence.

 One example of overcoming spreadsheet pitfalls is Knack builder RC Recycling, which helps construction companies comply with strict EPA guidelines by properly disposing of any waste from cement mixing. Knack workflow automations replaced a broken system of spreadsheets and optimized overall company operations. 

The spreadsheet listed all the RC Recycling projects, and each company’s information. Yet another spreadsheet stored details on the waste containers, including size and when they were last serviced. Bringing the data together in a single real-time workflow made everything from handling customer calls to dispatching drivers much more efficient.

Read the full case study here >>

Embracing the Future of Data Management

The migration from Excel spreadsheets to an online database pays dividends on your efforts. It elevates data management from a cumbersome, manual process to a streamlined, automated one. It ensures your business can scale effectively, collaborate efficiently, and make decisions based on the most accurate and up-to-date information.

 Learn more about how fast and easy it is to get started moving your data from Excel spreadsheets to an online database app.