Why do we keep using spreadsheets?

Data Dec 02, 2021

With more than 700 million users worldwide, there is no doubt that Microsoft Excel is the most popular business software ever. From building simple tables, creating visualizations, and to even be used as company databases, Excel, and spreadsheets, have been the go-to tool for business users in the past few decades.

This does not come as a surprise. Excel is extremely powerful and flexible, and it lets users analyze good amounts of data to get the insights they need. Features like the pivot tables have become essential for data analysis as they’ve allowed users to filter and segment data in huge data sets.

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Also, while it does have a bit of a learning curve, Excel is so ubiquitous these days that there are tons of tutorials, courses, and even internal company wisdom to teach someone to learn Excel at a basic and intermediate level. As a matter fact, Excel has become one of the most marketable skills in the corporate world, with the power of leading employees to promotions, and leadership roles for mastering it. An interesting self-reinforcing process of its utility and importance revolves around it.

On the other hand, we have Google’s counterpart: Google Sheets, which shares many of the same benefits of Microsoft’s spreadsheets software. Still, it’s been proven less effective when working with large amounts of data, due to speed. Nonetheless, Google Sheets has become the choice for smaller and scrappier companies, thanks to its immensely useful collaboration features and the fact that it's free for anyone with a Google account, which is not a small detail.

Regardless of which tool you use, there is little debate about the fact that spreadsheets are a constant in the business world, and it is unlikely that a company does not use them to a certain extent.

That said, there is technology that has tried to replace spreadsheets, of course with their varying use cases.

We have the case of data storage, for example. Business databases like PostgreSQL are probably the best bet for companies with large amounts of data. Their centralized structure gives users the ability to better track, manage and control information flow.

There are also tools that specialize in data visualization. Software like Tableau, Domo or Looker can definitely create better and more intricate visualizations than spreadsheet programs.

But spreadsheets still seem to be the reigning champions and this is not by mere coincidence or by mistake.

There’s of course the issue of cost. Excel is not expensive, neither as a database or as an analytics tool, and it does come with the whole Microsoft Suite, which includes other essentials like PowerPoint and Word. On the other hand, tools like Tableau can cost around $40 dollars per license per month, which definitely adds up, especially for smaller and growing organizations.

In addition to the license cost, there are other costs associated with migrations of data, and the adoption of new tools by employees. If you have your database in Excel, and you want to migrate everything to a PostgreSQL, it’s going to be costly, maybe not too much in absolute dollars, but in terms of time and labour, which end up affecting the bottom line.

And there’s also the resistance to change. Once people have used a tool for a long time with relatively good results, it’s going to be really hard for them to learn another one and accept why the new one is better for them. In the specific case of the transition from excel to a database, this might even imply learning SQL, so there is a whole other barrier.

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And while we love what spreadsheets have allowed us to create as a society until now, it might not be the best that companies stick with them for everything. In fact it might be a problem.

The principal issues with using spreadsheets for database usage and visualizations have a lot to do with version controls and lack of real-time data syncs. I’ll explain myself. Many times what ends up happening with spreadsheets is that one gets made and sent out. So far, so good. However, when new data comes in, another one has to be made, so version #2 is created. And then you start to see where the problem begins.

In the end, a team can end up with multiple versions of the same spreadsheet, which is at almost every point outdated, since there is no real-time synchronization of data. This will become a pain to manage. Additionally, the decisions made based around that spreadsheet will likely have a less than ideal timing because of the data age.

But you can’t stop something that kind of works if you don’t have a better option, right? Something that won’t break the bank, that won’t mean days of training to understand how to use, that will be efficient but powerful. Until then, Spreadsheets will still rule the business world.