cons of excel spreadsheets in human resource management

8 Cons of using excel spreadsheets in hr

Employee Appreciation & Productive RecognitionReasons why Excel may not be the best option for managing organizational workforce

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Evolution of Spreadsheets - A quick timelineWhat Is Employee Appreciation

1978 – VisiCalc: First ever electronic spreadsheet

Timely, formal or informal, expressed and appreciative acknowledgment of a person’s or team’s efforts above and beyond the call of duty or reasonable expectations in the course of their professional endeavors, or behaviors and results which uphold the company’s goals and values.

1980 – SuperCalc: Solution bundled with WordStar

Employee Appreciation & Productive Recognition

1982 – Multiplan: Early spreadsheet program by MicrosoftWhat Is Employee Appreciation

1983 – Lotus 1-2-3: Improvised tool with charts & graphs

Timely, formal or informal, expressed and appreciative acknowledgment of a person’s or team’s efforts above and beyond the call of duty or reasonable expectations in the course of their professional endeavors, or behaviors and results which uphold the company’s goals and values.

1985 to present day: Progressive versions of Microsoft Excel made availableTimely, formal or informal, expressed and appreciative acknowledgment of a person’s or team’s efforts above and beyond the call of duty or reasonable expectations in the course of their professional endeavors, or behaviors and results which uphold the company’s goals and values.

What’s behind Excel’s popularity?


The fact that it is free, readily available, configurable on basic machines and easily manageable for small business setups has backed its extensive useEmployee Appreciation & Productive Recognition

Around 81% of the organizations use spreadsheets to supplement their Corporate Performance Management solutions


Does this imply it is the best solution for HR?


Probably Not. It is not geared to face the challenges posed by large well-established organizations with evolved HR processes and soaring employee strength


What are the major disadvantages of Using Excel In HR?


Reason #1 - Privacy Issues and Poor Built In Controls


You can hardly control the viewership of the data making it vulnerable to alterations. Not to forget, there are no checks to test the accuracy of data sources getting pulled into the spreadsheetsEmployee Appreciation & Productive Recognition

Reason #2 - Prone to Human Errors


The reason why people love Excel is the scope for rework and manipulation. The chances of mistakes increase drastically when several versions of a spread-sheet are saved by several people.


Reason #3 - Unfit for Dynamic Business Scenario


Excel is incapable of error proof knowledge transfer. If a person X leaves, then person Y has to apply his own interpretation when working with spread-sheets.

Non-responsiveness to business agility leads to wastage of time, opportunity, productivity and competitive knowledge


Reason #4 - Doesn’t support automatic reporting


Manual nature of handling spreadsheets, makes scheduled delivery of standard reports to multiple users next to impossible. Tedious E-mail is the only way out!


Reason #5 - Not Scalable


Data grows with organization. Managing huge databases on excel without slips and misses is a non existent case. Larger organizations need solu-tions that can decipher complex connections and dependenciesEmployee Appreciation & Productive Recognition

Reason #6 - Hinders Quick Decision Making


Long drawn consolidation process with different versions of data and error checking mechanisms leads to handicap situation for businessEmployee Appreciation & Productive Recognition

Reason #7 - Teams and Excel don’t go together


Organizational activities are rarely individualistic. Excel in non-suitable for collaborative initiatives as there is no central database with real-time accurate information


Reason #8 - A risky affair


Excel spreadsheets constituting too many formulas and cell references becomes prone to costly mistakes as there is hardly any documentation available explaining the links with zero auto-correct features


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Are we blowing the issue out of proportion? People have been using Excel for years now!– We don’t think so


Seemingly benign human errors have led to dramatic and horrific business losses!


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Case #1 - The TransAlta Mistake


One of the biggest Canadian Power Generator in American Continent suffered a humungous loss of $24 million. Reason? You guess it right. Excel


TransAlta CEO, Steve Synder, reported that the losses was an outcome of simple copy paste error which went unnoticed prior to bid submission.


Result of the spreadsheet error – Company bought more US Power transmission Contracts at higher prices leading to the fiasco.


Case #2 – Centre for Regional Strategies


Messed up Excel sheet led the company incorrectly report that only 11 percent of New Century’s population above 25 years old held a bachelor’s degree. The correct figure was 20 percent


How did it affect the company?Botched up its reputation and credibility

How did it affect the region?Placed New Century region below other areas like Nashville and Athens which were thought to be better educatedEmployee Appreciation & Productive Recognition

Case #3 – Dominion Transmission Inc.


The Natural Gas Provider reported incorrect figures of weekly Gas Storage resulting in false inflation of gas prices


The artificial price hike was estimated between $200 million and $1 billion. Consumers of the company sued it for this atrocious mistake


What was the reason behind this big goof up?

A naïve blunder of saving the excel sheet under same name for each weekly storage report. A classic case of oversight !Employee Appreciation & Productive Recognition

Case #4 – Fidelity’s Magellan Fund


The company had to face huge embarrassment when their estimation to make $4.32 per share proved to be a failure


Culprit – Data Transfer among Excel Spreadsheets

The company accountant accidentally omitted the negative sign on the net capital loss of $1.3 billion treating it as net capital profit instead. All this while taking Data from Sheet A to BWhat Is Employee Appreciation

Trivial Mistake with huge implications

Fidelity Fund’s estimate was off by a staggering $2.6 billionWhat Is Employee Appreciation

After Thoughts

What Is Employee Appreciation

For those who still believe in the comfort of familiarity offered by Excel Spreadsheets, can suffer both - in the short term or long haul owing to its offline and non-dynamic nature


World is moving towards internet and cloud based Business Intelligence Tools and Software that make life easier and organized for HR Commu-nity


Final Strokes


Excel is a useful tool for simple data entry and basic analytical tasks

Sophisticated reporting and business analysis requires advanced software applications

Spreadsheets are for support. Not the be all end all of BusinessWhat Is Employee Appreciation

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cons of excel spreadsheets in human resource management

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