Yahoo Finance

Originally published by Bernard Marr on LinkedIn: Why You Must STOP Reporting Data in Excel!

We’ve entered the age of big data, in which more and more companies are seeing the value and importance of data in many different areas of their business, from market and customer research, to internal sales figures and HR analytics.

But we’ve also entered big data’s awkward teenage years when more companies are getting on the data bandwagon and then using outdated tools to try to visualize and communicate that data: namely, spreadsheets. In fact, surveys suggest that 1 in 5 businesses are using spreadsheets as the main tool to communicate data internally.

There’s nothing inherently wrong with spreadsheets; they’re excellent tools for many different jobs. But data visualization and data communication is not one of them.

According to a survey of 2,000 employees in the U.S. and U.K.:

• More than 80% would like their bosses to share more business performance information.

• 25% of employees have, or know someone who has, left a job because they weren’t included in or privvy to the business’ performance or direction.

• And more than half of respondents said that knowing company performance data contributed significantly to their own positive performance.

In other words, employees want to be included in discussions about overall business performance, and that means that key performance indicators and other data must be communicated to large groups of people at every level of the business.

And for that to work, for the data to be understood and for the communication to be effective, teams need something that can help them visualize the data more easily and effectively. Spreadsheets aren’t the right tool for that job because:

1. Most people don’t like them. For whatever reason Excel has a bad rap, especially among employees who don’t use it often. Whereas a data analyst who is frequently up to his eyeballs in spreadsheets might find them useful tools, people in other departments of the company may find them confusing or intimidating. That means you’ve already alienated a large portion of your audience from the get go. Many people won’t even open an email attachment in Excel, let alone get excited about analyzing them to find insights.

2. Important data is hidden. Because you’re seeing all the raw data at once, it’s difficult to interpret what’s important and what’s not. Visualization tools can be used to highlight the important aspects of a data set or results, but in spreadsheets, it’s hard to see the forest for the trees. You are missing the point if your team finds it hard to identify the messages or see how the data relates to their day job.

3. They are difficult to analyze. Again, especially for lay people, spreadsheets can be difficult to analyze. Worse, the volume of data presented can lead to misinterpretation, and your team could make poor choices or take wrong actions based on that misinterpretation. In addition, people only familiar with spreadsheets and their associated tools tend to make charts and graphs that often distort data, including 3D graphs and pie charts, simply because the tool (like Excel) makes them easy to create.

4. Loss of historical data. Spreadsheets aren’t designed to store historical data, so often, in an attempt to keep the size of them manageable, they are “updated” and companies lose their historical data. This makes is hard or impossible to spot trends over time and compare data across longer time horizons.

5. It’s difficult to share. Even with cloud computing solutions, it’s difficult to share a spreadsheet among many team members. And, because of the possibility that data could accidentally be deleted or changed, the spreadsheet that is shared is rarely “live” or real-time. At best, it might get emailed once a week — which poses the problem of the information getting lost in team members’ inboxes.