Excel is one of the most commonly used business intelligence tools.
In today’s business world, having tools that allow us to quickly and intuitively analyze data and transform databases into understandable information is fundamental.
More and more companies realize the importance of data analysis and its relationship to improving performance and increasing profits.
In small companies, spreadsheets can be sufficient to get the job done. Spreadsheets have many great uses.
However, spreadsheets alone are inadequate for making data-driven decisions for growing companies.
For years, businesses have relied on the unique and effective features of Microsoft Excel to streamline operations.
So entrusted is the software that many businesses still cling to it, despite superior business intelligence (BI) software readily available and providing superior operational solutions.
Most forward-thinking businesses are moving to more sophisticated yet easy-to-use BI software.
In this blog, we will discuss why Excel spreadsheets are insufficient as a data analytics solution on their own.
What Is Excel?
Excel is part of Office365 and was released in 1985, is a program known by virtually everyone.
Whether or not you are an expert in data analysis and whether or not you work with data, you have almost certainly used Microsoft Excel.
The program has the format of a spreadsheet that distributes data into rows and columns and can perform calculations and mathematical formulas easily and quickly.
In addition, like Power BI, it is also used to transform data sets into visual information.
What Are Excel Spreadsheets Used For?
Excel is typically used to perform financial analysis for business operations across all organizations, from small companies to large.
Some of the primary uses of Microsoft Excel include:
Data entry and management
Accounting and financial analysis
Charting and graphing
Time and task management
Excel Automation And Reporting Capabilities
In Excel, you have lots of options to get and organize data: You can import data from external data sources (Power Query) in Excel and use it to create charts, tables, and reports.
Available chart types in Office include tables, line charts, bar charts, radar charts, etc. You can create PivotTables and drill into data by using Quick Explore.
You can also use the Field List for a report to determine what information to display.
You can create scorecards that use conditional formatting and Key Performance Indicators (KPIs) in Power Pivot to show at a glance whether performance is on or off target for one or more metrics.
Using Power Query, you can discover and combine data from different sources and shape the data to suit your needs.
You can create a data model in Excel that contains one or more data tables from a variety of data sources.
If you bring in two or more tables from different databases, you can create relationships between tables by using Power Pivot.
In a data table, you can use Flash Fill to format columns to display a particular way. And, if you’re an advanced user, you can set up calculated items in Excel.
Opportunity For Collaboration
Because Microsoft Excel is designed for use on a personal computer, it doesn’t offer multi-user capabilities, making it difficult for employees to work on one spreadsheet.
However, BI software will allow for collaborative input, which means real-time input and modifications.
Employees can even access the software from mobile devices with automatic alerts.
What Is Business Intelligence Software?
Business Intelligence Software enables you to share, view, explore, and refresh workbooks in a browser window, similar to how it works in Excel.
BI software is used by businesses to transform seemingly random sets of data into actionable insights that will assist in determining future strategies and tactics going forwards.
BI’s key features are available in Excel, such as refreshing external data viewing, sorting, and exploring data in reports in a browser window, and viewing workbooks that contain a data model.
Excel 2013 offers lots of new BI features and functionality, making it easier than ever to gather data and use the data to create powerful reports, scorecards, and dashboards.
Excel-based BI software allows users to easily create and edit reports with their MS Excel skills.
Most people in the corporate world have adequate knowledge of MS Excel, so Excel-based BI software is the ultimate BI platform.
Since many people can use the spreadsheet program, users can easily analyze and interpret information without wasting time.
In addition, there is no need to waste time and money on user training.
BI Software Integration
Business Intelligence (BI) is the systematic use of information about your company and its business environment to analyze, report, predict, and manage business performance.
While Microsoft Excel integrates with other Microsoft technologies, it is limited beyond this reach.
However, BI software – because it is cloud-based – can integrate with various other software solutions, extracting relevant data and leveraging better business insights.
Because of the ability to share reports and communicate within the software, there is no need to export sensitive data, making a BI tool the most secure solution.
While spreadsheets are useful for simple calculations, when they are used instead of a BI tool, they can expose your company to reputational and financial risk, lost productivity and significantly slower time-to-insight as information workers struggle with the inherent limitations of spreadsheet-based reporting and analysis.
The Downsides of Excel
Most businesses worldwide already use Microsoft Office and have access to Excel with the requisite feature set to maximize ROI without needing to purchase another solution.
However, Excel does have its limitations.
Big Data Handling
Excel is quite limited when managing large data sets, especially those with structured and unstructured data.
Data integration in Excel does not comply with SOX, an enterprise-level, mandatory data transparency, and security protocol.
Advanced Use of Spreadsheets Requires Expert Skills
Most spreadsheet users can perform simple functions such as “sum” and “sort.” But most users find it challenging to create complex formulas.
Therefore, an analysis of complex data in Excel requires much more expertise, often requiring an additional hire.
Excel can handle it with the right add-in or a young new hire who still remembers his college statistics.
An Excel spreadsheet can pull data from a cube in the BI database; process it in a workbook; receive the results; process them in some other workbook, and then write the results back to the BI database with a simple recalculation of the workbook.
Spreadsheets Are Prone To Human Error
Studies have shown that 1 in 5 large companies have suffered significant financial losses due to spreadsheet errors. As spreadsheets become more complex, error rates increase.
An error in one cell can cascade throughout your data. Mistakes can quickly go undetected, allowing a company to make vital decisions based on flawed information.
Cutting-edge business intelligence demands big data processing at the speed of thought, collaborative access to real-time data, and complete data integrity.
You need BI features beyond what Excel offers you.
Spreadsheets Don’t Allow For Data Discovery
Providing your spreadsheets are error-free, they allow you to analyze specific metrics.
Beyond this, there is very little room for data discovery because Excel does not allow the user to follow the data through. Instead, it requires a mathematical understanding of the data.
You can view workbooks that contain a data model.
Still, in general, you cannot explore data in certain items, such as PivotChart reports, PivotTable reports, and timeline controls that use a data model as their data source.
Analyzing more than this would require pivot tables or manually generating views of additional dimensions.
Compiling this information is burdensome, time-consuming, and often results in inadequate analysis. In the end, the critical information you need isn’t readily available or assuredly reliable.
Once you have data in Excel, you can easily create reports:
You can use Quick Analysis to select data and instantly see different ways to visualize that data.
You can create available chart types in Office that include tables, line charts, bar charts, radar charts, etc.
You can create PivotTables and drill into data by using Quick Explore.
You can use Power View to create mashups that include interactive charts and tables.
Clear Analytics is a data management platform that pulls data into Excel for self-service data analysis.
All data stored on its server ensures data security through versioning and governance compliance.
What Are Excel-Based BI Tools?
In Office 365 Enterprise, you have BI capabilities in Excel and SharePoint Online.
As part of Office 365 Enterprise, Excel provides BI capabilities that enable you to collect, manipulate, analyze and share data with others for collaborative insight.
Excel-based BI tools empower users with existing knowledge of Excel to view their data as dashboards and reports in spreadsheet format, just as in Excel, and share it with others while pulling data from multiple sources in real-time.
Why Power BI Outdoes Excel
Although Excel can “excel” at doing the job, Power BI is the safer option for various reasons.
Power BI has faster processing than Excel
Power BI dashboards are more visually appealing, interactive and customizable than those in Excel
Power BI is a more powerful tool than Excel in terms of comparison between tables, reports, or data files
Power BI is more user friendly and easy to use than Excel
Software BI allows for the easy analysis of trends from vast amounts of business data.
This can then be used for predictive business forecasting according to a weekly, monthly, or annual estimate.
Business analysts can use their dataflows to specify the most relevant features to train, validate and invoke ML-based models through automated machine learning (AutoML).
Or, Power BI will do it for them, with automated algorithm selection and model tuning for invoking it on new data within the data flow.
Data management can be a full-time job. This time could be better spent on tasks to grow your company.
This level of data management can be accomplished faster and more accurately with BI software.
One of the great advantages of Power BI is that it can connect with a large number of data sources of many sizes:
Relational and non-relational databases
Files in different formats
Big Data tools
Web applications, etc.
In addition, it has high graphic and data transformation capabilities in reports, dashboards, and customized attractive, interactive, and easily understandable visualizations.
Modern BI software will automatically collect and refresh data which means there is no need for employees to be dedicated to this task.
Performing a data refresh and other functions can eliminate the need for human intervention, as the software pulls data from different places and performs the data processing work.
This is great at minimizing human error, prevalent in Microsoft Excel, leading to massive financial implications.
For bigger operations, Microsoft Excel can’t cope as effectively.
If you’re working on a spreadsheet file with too much information, the document won’t open or will come up with error messages.
Alternatively, BI software can merge vast quantities of data that can’t be opened in Excel.
What Does The Future Hold For Microsoft Excel?
As Microsoft itself has pointed out, Excel continues to offer a lot of value. Initially, many BI vendors saw Excel as a competitor.
Still, riding on its ease of use and familiarity for the average user, almost every BI vendor provides integrations with it. Ultimately, it depends on the strategy that you want to follow.
The Bottom Line
Both Excel and Power BI belong to Microsoft and are used for data processing and analysis, although they have different capabilities.
Excel, part of Office 365 and released in 1985, is a program known by virtually everyone.
Excel is a better option if you want to manipulate and transform data, do searches, and apply mathematical formulas or create complex tabular reports.
Power BI is more suitable for working with Big Data, creating visualizations, working in teams, integrating data from multiple sources, and analyzing data to get indicators, conclude, and make data-driven decisions.
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