Remember the ’80s? Back then, it was all about “Thriller,” legwarmers and Reaganomics. Home videos were “taped” on analog film, music flowed through Boomboxes and Walkmans (or “Walkmen?”) and companies used spreadsheets to manage just about everything. Today, most of the relics of the ’80s are just pleasant memories, but unfortunately a large percentage of the business world still relies on spreadsheets. It’s 2014. The world is ready for something better.
Although there hasn’t been an Alf sighting in decades, we live in a world where only the elite fringe of companies have graduated to the cloud. Since the 90s, larger enterprises have been investing in cutting-edge technology, beginning with expensive, on-premise systems that required a lot of investment and upkeep. Over the years, however, these systems have been analyzed, refined and in large measure supplanted by Software as a Service (SaaS). Finally, the business world is climbing out of the shadow of the ’80s.
Still, while large enterprises have modernized, small to medium-sized businesses (SMBs) have lived under the delusion that legacy technology is their lot in life. But in an age where business is dictated by speed, flexibility and efficiency, outdated technology like on-premise systems and spreadsheets are holding SMBs back from really competing.
What’s Wrong with Spreadsheets?
Let’s use spreadsheets as our sacrifice to the altar of the ’80s. While spreadsheets still work on a basic level, they are a liability in comparison to the reliability, efficiency and functionality offered by modern centralized data systems. Companies that use spreadsheets as a data management tool fall victim to duplication of effort, redundant data entry, siloed accessibility and risk of technical corruption. These were problems we all accepted 30 years ago, but today these are real liabilities when competitors have migrated to the cloud.
SMBs who default to legacy technologies also face an uphill battle with regard to security. Most small and medium-sized businesses do not have their information safeguarded with encryption or other data-loss prevention technologies. While local solutions have their own protection, they can’t keep information as secure as an in-the-cloud solution that offers layer upon layer of encryption. Data is stored in state-of-the-art data centers that use biometric authentication, key card access controls and constant video surveillance. Oh, and in-the-cloud software backs up nightly so companies can access their information 24/7.
Legacy technology also increases the likelihood of inferior or unreliable data. Several studies have shown that close to 90 percent of spreadsheets contain errors.
Because spreadsheets lack data integrity—whether due to simple mistakes inputting data or an error in a formula—they’re doing serious harm to many companies. A scandal erupted involving JPMorgan Chase underestimating its synthetic credit portfolio, due to an error in an Excel spreadsheet used to model risk, “which ultimately led the bank to declare $6 billion in losses and could lead to another $600 million in fines,” according to a 2013 article in Quartz.
It’s Time to Leave Legacy Tech in the Past
Look, change is hard. Everyone gets nostalgic watching Michael J. Fox masquerade as Marty McFly, and similarly, it can be hard on everyone when a process or system changes. There’s a new system to learn, new processes to create. One way to ease the transition is by including your employees in on the decision to make the change. Explain how much easier life will be when the new systems are up and running and making their work more efficient. And be sure to choose a solution that is user-friendly and won’t require a lot of rev-up time. In fact, why not let your employees have a hand in choosing the company’s new technology systems?
Just as your complete VHS collection of “M.A.S.H.” episodes sends a particular message about you, companies that continue to use archaic, inefficient processes tells your employees and customers that you’re out of touch on the technology front. And well, frankly, you are. Technology has made our lives and work simpler. A new system can streamline operations that are now wasting hours and hours of employee time with their inefficiencies.
When you have all information in one database in the cloud, it’s easy for those who need access to information to have it—right at their fingertips from pretty much anywhere they have an Internet connection. Whether you need to give access to managers in different cities (or even countries) or investors looking to see an overview of your company information to determine if they want to invest in you.
The Results Are In
Companies who have made the leap have discovered how refreshingly simple and intuitive online software can be, and how it adapts to their changing needs as their companies grow, instead of just adding spreadsheet after another spreadsheet. Now information is stored in one central place and it’s easy to pull up and use that information to make future decisions or simply create reports showing their own data, for whatever reason.
Times have changed, and so should the technology decisions of SMBs. I know, you really miss spending time with “The Breakfast Club,” and Paula Abdul’s best work happened way before “American Idol.” But don’t let nostalgia dictate your company’s technology decisions. The ’80s called, and they want their spreadsheets back.