10 Disadvantages of Microsoft Excel

Microsoft Excel is widely used spreadsheet software. Many organizations and colleges have adopted it due to its good reputation and useful features like time-saving formulas and the ability to produce professional charts and graphs. While Excel has many benefits for users, it also has a few drawbacks that we should be aware of.

10 Disadvantages of Microsoft Excel

10 Disadvantages of Microsoft Excel

The following are the 10 disadvantages of Microsoft Excel:

  1. Lack of control and security
  2. Excel is prone to human error
  3. Excel is hard to consolidate
  4. Excel is unsuitable for agile business practices
  5. Excel can’t help us make quick decisions
  6. Excel is not designed for collaborative work
  7. Excel is difficult to troubleshoot or test
  8. Excel is vulnerable to fraud/corruption
  9. Difficult to manage advanced pricing rules
  10. Excel is Unfit for Agile business Practices

1. Lack of Control and Security

In Excel, if the data is too huge, it might slow down the Excel program, especially if all the data is included in one file. Attempting to divide the data down into smaller files may result in some of it being lost or missing. Excel is not user-friendly, and the application rounds off very large numbers using precise calculations, which compromises accuracy.

Excel is also a stand-alone tool that is not completely integrated with other business systems; it does not offer enough control because sales managers do not have clear and consistent visibility of the quotes that are sent by their representatives or the history of those quotes.

Every time employees make changes to Excel manually; there is a risk of introducing errors and compromising accuracy. These errors are not only difficult to spot later in the process, but they can also have a detrimental impact on the bottom line.

2. Excel is Prone to Human Error

Excel’s great sensitivity to minor human errors is more ordinary but equally destructive. Negative indications that are missed rows that are misaligned may appear innocuous, but they can impair investor trust or result in a significant loss of opportunity worth millions of pounds. On average, a spreadsheet will contain 1 error for every cell for every 20 cells that have data.

3. Excel is Hard to Consolidate

The usage of an Excel spreadsheet to generate reports makes the consolidation process lengthy. End-users must often collect data from various files, summarize it, then send their report to their department heads by email, portable storage media, or copying to a generally shared network folder. This procedure must be repeated until all of the data has reached the organization’s senior decision- makers.

4. Excel is Unsuitable for Business Continuity

Spreadsheet data is hardly kept in a single location; instead, it is frequently in the hands of non-IT people who are unaware of data storage and backup best practices. Complete data recovery can be so tough, even impossible if a major disaster strike.

Even if a company has sufficient financial reserves, the lack of data to work with (e.g., accounts receivable records, customer records, stock and price lists) can stymie its ability to respond quickly.

5. Excel Can’t Help Us Make Quick Decisions

In a spreadsheet-based environment, extracting data from many departments, aggregating that data, and summarizing the information in a way that supports the company’s management in making the best decisions can be time-intensive.

In order to protect the integrity of the data, everyone participating in the information processing must be especially careful; double/triple checking will be required frequently. When the MD receives the final version, he or she may not have much time to deal with it.

6. Excel is Not Designed for Collaborative Work

Accurate pricing often necessitates information from a variety of people in many departments. Multiple exchanges of data, ideas, and files will culminate in the final document.

When offices of the company are spread across the country, or specific team members are divided by significant distances, the only option to exchange spreadsheet data is via email.

Duplication and even inaccurate data entry are a risk with this type of exchange. Different team members will struggle to keep track of comparable files sent back and forth and may submit an out-of-date version as a result.

7. Excel is Difficult to Troubleshoot or Test

Spreadsheets were never intended to be used for testing. It is not rare to have interconnected spreadsheet data scattered across multiple folders, offices, workstations, or even geographic locations. Even though the locations of all connected files can be pinpointed, it can take a long time to track the logic of formulas from one related cell to another. When troubleshooting any suspicious data, similar issues will arise.

8. Excel is Vulnerable to Fraud/Corruption

Several million pounds have already been lost as a result of fraudulent changes in firm Excel files. The main cause of this spreadsheet vulnerability is the lack of controls (as mention above) that makes it very easy to change formulas, values, or dependencies without being discovered.

9. Difficult to Manage Advanced Pricing Rules

Excel is commonly used in enterprises to manage a pricing plan based on cost-plus pricing, discount from list pricing approaches, or other straightforward pricing tactics.

While this ensures you are making a profit on our goods or services, it ignores a slew of other elements that influence a customer’s desire to pay, most notably value-based pricing.

Alternative, more advanced pricing techniques, such as psychological pricing, attribute-based pricing, quantity-based pricing, and pricing differentially across markets and countries, to mention a few, are difficult to manage, test, and optimize without a pricing system.

10. Excel is Unfit for Agile Business Practices

Spreadsheets are frequently generated by people with little or no IT experience. Spreadsheets files eventually evolve into highly customized user-developed applications. Therefore, when it is time for a new person to take over as part of a business or personnel change, the newcomer may have to start from the beginning.

Some Other Disadvantages of Microsoft Excel

Below are some other disadvantages of Microsoft Excel:

  1. Keeping up with the changing business world
  2. Regulatory compliance challenges
  3. Not prepared for disaster

1. Keeping Up with the Changing Business World

Major changes are shaping and redefining the corporate landscape in today’s world. We have firsthand knowledge of the insurance industry’s role in this transformation. This can be seen in large-scale business transformation programmes; M&A activity, and management buyouts are examples of this. Spreadsheets in reinsurance programmes are frequently extremely personalized for each user.

When a new person takes over as part of a large-scale corporate transition, spreadsheets may be so individualized that the new person will have to start from scratch. Unlike a system, the spreadsheet user does not have a manual on how to utilize the function of the spreadsheet. This results in substantial productivity inefficiencies and exposes the data to errors once again if a new worker is left guessing what to do.

2. Regulatory Compliance Challenges

Using spreadsheets makes it difficult to ensure regulatory compliance for our reinsurance programs, as the data can be susceptible to fraud and errors.

Which regulations apply to reinsurance based on spreadsheets? We have seen a spike in worldwide regulation during the previous two decades, including:

  • GDPR
  • Solvency III
  • Dodd-Frank, Basel III
  • Serbanes-Oxley (SOX)
  • FAS 157

3. Not Prepared for Disaster

When tragedy strikes, our reinsurance programme will be jeopardized if best practices for spreadsheet storage and backup are not in place. If something goes wrong, recovering all of our data will be difficult, if not impossible, and will significantly impact on our organization.


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