Since its launch in 1985, Microsoft Excel has been the go-to business management software that executives around the world use to store and manage their day-to-day operational data.
However, brand recognition and longevity can only take an application so far. In the 36 years that followed, other solutions have outpaced Excel in terms of security, efficiency, and performance. This includes ERP platforms that centralize, organize, and automate processes and data across the enterprise.
In the Excel vs ERP debate, the latter emerges as the clear winner. Today, we’re sharing a few key reasons why this is the case.
Excel vs ERP: The Deficiencies of Excel
Why should you consider moving from Excel systems to an ERP system? Let’s take a look at a few important differences:
1. Potential for Human Error
Technically, any system used by humans is vulnerable to some degree of user error. However, if you’ve ever tried for hours to manipulate an Excel spreadsheet, you know the software is especially prone to user error.
In fact, according to research, more than 90% of spreadsheets contain errors. Most of this is due to the simple fact that Excel isn’t integrated or centralized.
Thus, even if various departments across your organization require the same data, they’ll likely use different spreadsheets. This is more than just frustrating and time-consuming. It also compounds the potential for errors, which becomes a risk each time a user populates a cell.
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2. Lack of Centralized Control
ERP software creates a single, unified source of truth based on reliable data. There’s only one version of information, and all users have access to it in real time.
This isn’t the case with Excel where it’s easy for employees to make changes to a spreadsheet, save it as a new version, and start sharing it. This makes it nearly impossible to know if your teams are working from the right dataset, or if it’s even accurate and up-to-date.
Sometimes, the associated risks are only minor. Other times, the inaccuracies can be detrimental. This is especially the case when it comes to production and supply chain management, where working off old or error-prone data could throw off your entire operation. This is why manufacturing ERP software is essential.
3. Time-Consuming Effort
Rarely is an Excel spreadsheet quick to manipulate. Instead, most are dozens, if not hundreds, of lines long, with user input required for almost every cell.
Whenever your teams need to create a new report, they’re required to make a new sheet. This is true even if they’re working from a template. Thus, the only way to effectively manage your inventory, for example, is to task someone with manually updating the data on a regular basis.
Then, there’s the issue of accidentally deleting an important spread. If you’ve ever clicked the wrong button or dragged the wrong file to the recycle bin, you know that file retrieval can take forever, if you’re able to achieve it at all. The same applies to system crashes that delete your files if you failed to save them.
4. Difficult to Collaborate
Sure, you can share an Excel file via email or upload it to a shared cloud location. However, for the most part, these spreadsheets are handled separately from the rest of your organization.
Even if your company was forward-thinking and invested in a mobile or cloud-based version of the Office suite, collaboration still isn’t seamless. For instance, the system can freeze up if multiple users try to access a spread at the same time.
In contrast, collaboration is a central tenant of ERP software. With a cloud ERP platform, your entire workforce can collaborate with ease, including both on-site and remote workers.
5. Outdated Data Insights
If a change occurs, an Excel spreadsheet will not automatically update. Rather, an employee must go into the file and make the necessary changes. This can lead to lost data or duplicated data entries.
An ERP system provides real-time data insights, instantly viewable via a central dashboard. This way, users can easily search for and find the information they need and then share those insights across departments.
Excel to ERP: Making the Switch
1. Consider Your Data Processes
Begin by mapping the data processes that your employees currently follow.
How do they capture information? Where do they store it?
Consider the different types of information they’re gathering, as well as how they’re using it.
You might find you’ve been following processes that were put in place years ago but no longer meet your needs. Inefficiencies and pain points will likely become glaringly obvious, and this is an ideal time to address them.
2. Pare Down Data
Do you need to transfer all your data from Excel to ERP, or can you pare it down?
You may be able to leave behind some historical data, freeing up space and time. If you discover you need additional data once the migration is over, you can always add it later.
3. Plan Mass or Gradual Data Transfer
For some companies, it makes sense to complete a mass data transfer. However, the majority find it easiest and most beneficial to complete this process gradually.
The only exception would be if your teams need constant access to all your data, even throughout the transition phase.
As a project team, brainstorm which approach is best and how you’ll tackle it.
Is it Time to Rethink Your Business Management Software?
If you’re still relying on Excel to handle the day-to-day activities of your in-house team, it’s time to consider an ERP implementation. While Excel can be helpful in some instances, it doesn’t offer anywhere near the bandwidth you can enjoy with an ERP system.
When comparing Excel vs ERP, it becomes obvious that ERP wins in terms of data reliability, user control, and enterprise collaboration. If you’re ready to make the switch, our independent ERP consultants can help. Request a free consultation below.