Many retailers begin simply - and the simpler the better. I am among the first to agree that things should be as simple as possible.
But no simpler.
There are many excellent reasons to begin simply. Among them:
- Comprehensive systems are expensive either in licensing or support or both - often too expensive for a start-up
- Simple tools are familiar and require no additional training
- In the beginning, the amount of data is limited and the interactions among them simple
So we naturally (really?) reach for a spreadsheet to handle any number of tasks ... like inventory tracking or inventory management. Computerized spreadsheets weren't widely available until Visicalc was written for the Apple II (!) in 1979 (Excel wasn't available until 1985).
Ever wonder what people did before that?
Today's spreadsheets - as powerful as they are - have some very serious issues, to wit:
- Spreadsheets have significant reliability problems. Research studies estimate that roughly 94% of spreadsheets deployed in the field contain errors, and 5.2% of cells in unaudited spreadsheets contain errors.
- Formulas expressed in terms of cell addresses are hard to keep straight and hard to audit.
- Lack of auditing and revision control.
- This makes it difficult to determine who changed what and when. This can cause problems with regulatory compliance.
- Lack of revision control greatly increases the risk of errors due the inability to track, isolate and test changes made to a document.
- Lack of security. Spreadsheets lack controls on who can see and modify particular data. This, combined with the lack of auditing above, can make it easy for someone to commit fraud.
- Because they are loosely structured, it is easy for someone to introduce an error, either accidentally or intentionally, by entering information in the wrong place or expressing dependencies among cells (such as in a formula) incorrectly.
Anybody who has tried to use a spreadsheet as a database (shudder) has probably experienced some, if not all of the above issues.
The familiarity and ubiquity of spreadsheets ensure that they are not going to be abandoned any time soon. That said, people who rely on them eventually realize their inadequacies. We will explore those indicators in a later post.
Submit a comment for your favorite indicator that you have come to the end of the road with spreadsheets.