Unless you’re a numbers guru or responsible for financial modeling and analysis, it’s hard to see how Microsoft Excel can meet the project management and collaboration needs of today’s teams. In fact, when you really look at the risks and complications of using Excel spreadsheets to manage a project, you might actually be creating extra work and confusion. Here’s why:
Spreadsheets are complicated
Effective teams include people with different types of skills and roles—and different information needs. In Excel, you can’t create specific views for each individual with different levels of access. So everything gets plopped into the spreadsheet and team members have to sort through and figure out what’s relevant to their piece of the project.
Some of the team uses another tool instead
If you’re a writer, designer, scientist, sales rep, or other person who doesn’t routinely use Excel, your productivity either falls off the cliff trying to figure out what’s going on in dozens of columns, rows, and tabs. You’ll take the information you know you need and move it into a tool that’s easiest for you to use. Maybe that’s Microsoft Word or SalesForce or Adobe InDesign. Excel can inadvertently cause a team to create multiple files of valuable project information in different formats and store them in different places.
Locked up in Excel Jail
Individual, tailored views of data with varying administration privileges do not exist in Excel. As a result, people may create their own versions of the spreadsheet. Uh oh. Now it’s almost impossible to be certain of having the most current data. For instance, you created a report on Friday for a Monday meeting and over the weekend, a team member updated some financial information. You don’t know if the formulas are correct, if the cells are delivering the data you expect, or if there are typos in the numbers. With multiple Excel files in multiple places, reconciling data isn’t easy.
This becomes especially risky when a project relies heavily on numerical data, financial calculations, third-party models, and analysis. Spreadsheet inconsistencies, errors, and assumptions have led to extreme risk for organizations. These nightmares have become so common that the European Spreadsheet Risk Interest Group (EuSpRIG) has compiled a list of horror stories. Here are just a few examples:
- $55.8 billion loss, JP Morgan. A lack of spreadsheet controls, incorrect logic, manual cut and paste, and pressure to approve the numbers created this nightmare. One of the spreadsheet cells defaulted to calculations based on Uniform Rate instead of Gaussian Copula. A second problem occurred when the spreadsheet subtracted an old rate from a new rate, and then divided by their sum instead of their average, as the modeler had intended. These errors dramatically affected the portfolio’s Value at Risk (VaR), which contributed to the loss.
- 0.4 drop in share value, AstraZeneca. The pharmaceutical company was forced to reiterate annual and midterm forecasts because confidential information was embedded in the spreadsheet sent to analysts.
- $6 million error and $12,500 audit fee, Knox County Trustee’s Office. When two different accounts were not linked correctly in Excel, cash-in-hand amounts were off by $6 million, an error that auditors uncovered.
- $1.5 million overstatement, town of Framingham. Having to manage “monstrous spreadsheets” and making an honest mistake led the town to believe it had $1.5 million more in the budget than it had. Framingham had to use $600,000 in state aid to help fill that gap.
Limited functionality creates more work
Spreadsheets don’t store files, conversations, enable file sharing, activity tracking, support discussion boards, or at-a-glance updated data. You can’t easily alter timelines or timestamps of actual activity. Spreadsheets also can’t track dependencies (if they aren’t numerical), allow you to add tasks, or deliver individualized action item lists. It’s almost impossible for the entire team to meaningfully track progress in order to make better decisions.
These are just a few of the reasons why a project management solution is a much better option than Excel for team projects. A solution like Redbooth is drop-dead simple to use. You don’t have to be a project management, Excel, or specialized software expert. It’s a visual tool that takes just a few minutes to get up and running. There are also templates for all of your project planning needs. Best of all, team members can collaborate and share documents in the forms that make the most sense for the information they need—right in Redbooth. Team leads can easily delegate and assign tasks, making responsibilities clear. Team and private workspaces keep everyone on track without drowning everyone else in information that isn’t relevant to their role. Visual project chart and timelines can be created instantly to that everyone knows where things stand at a glance.
It’s time to break out of Excel Jail. Try Redbooth. Sign up today – it’s free! – and see how much easier it is to manage a project.