Doctor My Eyes — Excel is Not a Project Management Tool (and neither is PowerPoint)

This is not to disparage the utility of a good spreadsheet to take care of those transient requirements to take a bit of data from the reporting systems and to run some custom algorithms or trends to perform what-if or other one-off analysis.  Probably most of us do this occasionally.

What I am referring to is the condition in many organizations in which data that consists of information essential to business operations is kept and analyzed using spreadsheets or other flat delimited storage or text methods.  The issue here is the optimum use of information, which the use of Excel and PowerPoint does not achieve.  Before anyone thinks that this is a contrarian’s post that is critical of Microsoft products, one need only read the technical advantages of true relational database management systems that are managed by specialized language like MS SQL.  Each of these applications and products has their proper place.

I would prefer that this post would be unnecessary since the title should be considered self-evident at this point–it is very similar to a presentation I gave almost 20 years ago when still advising senior managers in the U.S. Department of Defense and the aerospace industry–but the facts tell us that it’s assertion not so self-evident.  For example, a survey of 262 financial executives by the Financial Executives Research Foundation and the staffing firm Robert Half in 2012 indicated that 64% of public and private companies in the U.S. still used spreadsheets and manual methods for their financial solutions.  In 2011 a study by the ERP company IFS found that “of more than 281 manufacturing executives, 75 percent of study respondents aged 35 and under report using desktop spreadsheet software like Microsoft Excel instead of their company’s ERP, customer relationship management (CRM), supply chain management (SCM) or other enterprise software” while “respondents aged 36 to 45, 58 percent said they would use desktop spreadsheet software instead of their company’s designated enterprise applications.”

There are certainly good reasons in each study that people sub-optimize in using their data.  First and foremost is the hassle and expense of the centralized IT office.  The same methods and organizations that secure data and are tasked with maintaining configuration control for the IT resources of an organization are the same ones that oftentimes tend to impede flexibility in the acquisition of needed digitized business process solutions.  Back in the 1980s as the PC began to displace the old mainframes run by the stodgy folks wearing white shirts, pen holders, and black glasses who had to be bribed, cajoled, and stroked in order to obtain processing time, access to archived data, or–heaven forbid–devise and run a program, a new world order was declared in which the centralized and non-responsive central IT office was declared dead forever.  Then digital crime raised its ugly head along with a cacophony of new products, some of which delivered on their promises, but most which did not.  Thus the need, once again, to bring some semblance of order to the chaos that incompatible and ineffective products (among other problems) wrought.  So IT has come full circle and we are back to highly bureaucratized IT organizations (or aggressive IT services companies) that in many cases will defend their turf ruthlessly, many times to the detriment of the interests of the organization.  Thus, people do what they have always done when inflexible rules get in the way–they find ways around them.  The most convenient way is to use the “legal” workaround, which is the spreadsheet, the Word document, or the PowerPoint presentation.  Along with being able to achieve what is needed without having to ask permission or miss a deadline, managers and employees oftentimes learn these basic applications first.  They are intuitive, readily available, and familiar.

The problem, of course, takes many forms.  The first is that manual methods are rife with errors.  In fact, study after study shows that almost 90% of spreadsheets contain errors.  In 2007 CIO Magazine published an article listing the eight worst spreadsheet errors of all time, highlighting the very real damage that relying on these methods have created to organizations and businesses.  And this was before the financial crisis revealed similarly large errors in the financial markets during the most recent housing bubble deflation and resulting Lesser Depression.

In providing project management solutions to my target verticals, the area most in need of remediation–and which presents the most immediate opportunity for return on investment, improving data and process credibility, and preventing fatal business errors–is in displacing those processes built around managing data using Excel, Word, and PowerPoint.  In identifying data that is most appropriate for moving to a relational database management solution, I have found that this data shares certain characteristics:

a.  The data is an element essential to decision-making and must therefore be credible.

b.  The data is an element essential to trend analysis, organizational history, or corporate knowledge.

c.  The methods and algorithms used in the data’s processing must be provide results that are repeatable and consistent.

d.  The various elements of data are interrelated and may originate from systems of record.

g.  The output from the processing of the data is essential to job of more than one person or one process.

h.  The time it takes to construct, maintain, update, adjust, and use the manual processing environment for the data greatly exceeds the marginal value of the effort that could be saved using more automated methods to achieve the same or greater results.  That is, replacing the manual and spreadsheet method of using the data results in greater productivity and either cost savings or work shifting to more productive tasks tied to project success.

As a localized tool or as an intermediate point of review for data residing in tables augmented by more robust automation, Excel has proven itself to be a workhorse.  For in-depth papers and extended communication Word is the appropriate medium and for presentations PowerPoint provides a good basis for simplified communication of an idea or set of ideas.  But for the processing and integration of enterprise data these applications are inappropriate–and can be quite damaging–to business operations.

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