I know your customers. I know how many minutes they stay glued to your website. I know the reasons they drop off. I know what makes your business great and I can tell you how to improve it. You’ll find me in every marketing war room, IT huddle, and sales meeting. And I can share my knowledge with you—for a price.
What am I?
If you guessed, insight, then you’re right! Specifically, insight gathered by Business Intelligence (BI). How much are you willing to pay for insight? You may wonder if BI software is a necessary cost of entry to leverage your big data for data analytics or whether you can get by using Excel spreadsheets.
CHALLENGE: Prices for BI software geared for small business teams range from $600 to $6,000 annually. Because of these steep costs, your small business may look to your existing Microsoft Excel software to crunch the numbers and perform data analysis the old-fashioned way—with spreadsheets.
RECOMMENDATION: Excel as a vehicle for BI is not the recommended solution for your small business because there are hidden costs and challenges that outweigh its initial savings. When used as your go-to BI method, spreadsheets struggle, and in most cases BI tools are the better option despite their higher cost. According to Gartner, when evaluating options for BI remember this:
“Cost should be a secondary consideration to the achievement of business benefits.”
In this article, we’ll explore Business Intelligence vs Excel and the types of business needs which can only be satisfied with BI software.
Anything spreadsheets can do, BI can do better
BI software is better than Excel spreadsheets for …
Big data analysis:
- Large amounts of data
- Live data and analysis overtime
- Data that updates frequently and grows rapidly
Spreadsheets are not equipped to deal with a massive volume of data. If you load up a huge XLS file, you’ll notice immediate slowdowns, sluggish navigation, and the act of updating cells can feel like a slideshow. It’s a Sisyphean process at best.
There are many manual steps involved in loading data into your Excel spreadsheets, which means more chances for errors. According to research by F1F9, a financial modeling agency, nearly one in five companies has suffered financial losses as a result of errors in spreadsheets. BI software circumvent these issues by linking to your data sources and populating dashboards and visualizations automatically.
One of the biggest problems with spreadsheets is that you can’t view your data in aggregate but can see only the most recent segment that can fit in your spreadsheet. Not only does this mean you can’t compare new data with historical data, you miss out on minute-by-minute data as well. The quality of analysis suffers without a total view of your data, which is provided by BI software.
BI tools don’t require you to download the data you’ll be using for a particular session. Although you are able to filter and pare down for targeted analysis, the total data is always at hand. The vantage point provided is useful, since this allows analysts to chart trends very quickly, as well as adjust their decisions to align with newly acquired data.
Get a few hours of professional Excel experience under your belt and you’ll quickly realize it struggles with updating formulas and other advanced tools. Move a single cell and a chain reaction of strange and unwanted behavior happens across your table.
Not to mention it’s difficult to share the latest changes with all users, and then ensure that they’re using the latest version of your spreadsheet. Version control is a major problem—users will undoubtedly be using different versions of your spreadsheets, which leads to uneven analysis and inconsistent decision making.
BI software auto-updates with your most recent data, in real-time, upon opening the software, or possibly set off by a customizable trigger.
With BI there’s no need to update anything manually such as data sets, formulas, filters, and pivot tables, or to worry about the ghostly movements of decimal points that throw off your reports. With better version control and error mitigation, you can ensure every user is acting on the same spreadsheet loaded with the most recent data.
There are a lot of issues using Excel spreadsheets for collaboration. The challenges stem from more than one person attempting to work within the same spreadsheet at the same time. Doing so in Excel requires setting up a shared workbook, which is not particularly intuitive.
You also can’t view collaborators’ real-time changes and movements (e.g., Google Sheets) because the spreadsheet changes are only unified and updated when you manually save the file. If you and your collaborator happen to make changes to the same entry, you’ll be prompted to choose which changes to save. But this is not ideal and a far-cry from true, real-time collaboration
BI software offers many options for joint decision-making. We’ve already covered a few data sharing options. For example, BI’s ability to surface dashboards to users and to the device they prefer—from smart phones to smart watches—is a high point. Many BI software products also allow live annotations of reports, task assignment (to-dos), and the ability to set up email triggers and alerts to notify teams of updates as they happen. For more on collaborative BI apps, check out this product guide here.
You probably don’t use multiple tables in Excel spreadsheets. It’s not that you don’t need to, it’s that you probably realized that Excel wasn’t built with this functionality in mind. Vlookups can assist when merging one or two additional tables, but more than that is a hassle. Personally, I’ve once resorted to using two or more instances of Excel; a troublesome workaround.
BI software eliminates challenges working across multiple datasets. With BI software, it’s possible to link to multiple data sources simultaneously. Many companies use a database to store big data before analysis, but in many cases data is scattered across a number of unconnected repositories called data silos. As long as filetype and format are compatible—which can be reconciled with BI’s data preparation feature—a BI tool can bring data together wherever it exists in your organization.
There’s no security layer to speak of in Excel. You can apply security at the file level, such as encryption for the purpose of archival, but this isn’t practical for everyday use. Analytics reports are not things to be archived and revisited once in a blue moon, but a tool to be stored close at hand. Reports need to be constantly accessed and updated, tweaked with new queries, and shared with the team.
To these ends, BI software offers many security options without sacrificing shareability. For example, with BI tools you can make certain rows/columns visible to groups or individuals or make those same rows/columns invisible to a different set of users. In addition, BI tools offer secure portals to share dashboards with teammates.
This patches up one major vulnerability of Excel spreadsheets. How often have you come across Excel files haphazardly shared via email, on flash drives, or forgotten about? Many of these spreadsheets hold sensitive data. This increases your small businesses risk for cyber security breach or exposure.
For any casual user of Excel spreadsheets or those who have never worked with spreadsheets, doing any sort of data analytics with Excel is like being asked to fly a rocket ship. BI software offers a much easier path for beginners and amateurs to business intelligence—it can also be a boon for Excel experts too.
There’s a special flavor of BI software called self-service BI, which has been growing in popularity, especially for small business. No programming knowledge is necessary to use self-service BI, and its drag-and-drop user interface enables virtually anyone to moonlight as a data analyst.