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Cons of Excel Spreadsheets in Human Resource Management

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The humble Excel Spreadsheets have been a trusted partner of HR professionals across the globe since its advent in ‘70s where it graduated in form and brand nomenclature starting with the initial VisiCalc, SuperCalc to improvised Multiplan, Lotus 1-2-3 and the very monopolistic Microsoft Excel. Whether it is attendance, payroll or leave management HR function gracefully progressed from paper records to excel sheets. Did it work? Well it did for some time, but not when it became increasingly evident that it has major lacunas, a reality which is surprisingly easy to ignore.

So where is the epicenter of the issue with spreadsheets? One of the major drawbacks of Excel sheets lies in the fact that it is not sustainable for HR tasks that require complex correlations and real time analysis. Today a firm that uses Excel might have manageable employee strength and processes, but once the business operations expand, the use of spreadsheets becomes non-scalable.

The other disadvantages of relying exclusively on excel sheets include compromise on the privacy of data and possibility of letting the information fall in wrong hands. Password protections don’t help as the files go through multiple hands at multiple levels. This makes any critical data highly prone to fraudulent use and worse even business losses. Not to mention the pain in consolidation that also sometimes leads to inaccurate status reporting considering there are various teams or departments involved.

Testimony to the views expressed above is echoed in several organizational case studies that had to suffer losses in millions due to Excel Errors.

We are sure you would be enlightened with the nuggets presented in the deck!

As always we at CAKE HR would love to read your thoughts and feedback on this exciting topic. Feel free to share them in our comments section! :)

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Cons of Excel Spreadsheets in Human Resource Management

  1. 1. 8 Cons of using excel spreadsheets in hr Employee Appreciation & Productive Recognition Reasons why Excel may not be the best option for managing organizational workforce
  2. 2. Evolution of Spreadsheets - A quick timelineWhat Is Employee Appreciation
  3. 3. 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.
  4. 4. 1980 – SuperCalc: Solution bundled with WordStar Employee Appreciation & Productive Recognition
  5. 5. 1982 – Multiplan: Early spreadsheet program by Microsoft What Is Employee Appreciation
  6. 6. 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.
  7. 7. 1985 to present day: Progressive versions of Microsoft Excel made available 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.
  8. 8. What’s behind Excel’s popularity? Employee Appreciation & Productive Recognition
  9. 9. The fact that it is free, readily available, configurable on basic machines and easily manageable for small business setups has backed its extensive use Employee Appreciation & Productive Recognition
  10. 10. Around 81% of the organizations use spreadsheets to supplement their Corporate Performance Management solutions Employee Appreciation & Productive Recognition
  11. 11. Does this imply it is the best solution for HR? Employee Appreciation & Productive Recognition
  12. 12. Probably Not. It is not geared to face the challenges posed by large well-established organizations with evolved HR processes and soaring employee strength Employee Appreciation & Productive Recognition
  13. 13. What are the major disadvantages of Using Excel In HR? Employee Appreciation & Productive Recognition
  14. 14. Reason #1 - Privacy Issues and Poor Built In Controls Employee Appreciation & Productive Recognition
  15. 15. 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
  16. 16. Reason #2 - Prone to Human Errors Employee Appreciation & Productive Recognition
  17. 17. 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. Employee Appreciation & Productive Recognition
  18. 18. Reason #3 - Unfit for Dynamic Business Scenario Employee Appreciation & Productive Recognition
  19. 19. 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 Employee Appreciation & Productive Recognition
  20. 20. Reason #4 - Doesn’t support automatic reporting Employee Appreciation & Productive Recognition
  21. 21. 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! Employee Appreciation & Productive Recognition
  22. 22. Reason #5 - Not Scalable Employee Appreciation & Productive Recognition
  23. 23. 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
  24. 24. Reason #6 - Hinders Quick Decision Making Employee Appreciation & Productive Recognition
  25. 25. Long drawn consolidation process with different versions of data and error checking mechanisms leads to handicap situation for business Employee Appreciation & Productive Recognition
  26. 26. Reason #7 - Teams and Excel don’t go together Employee Appreciation & Productive Recognition
  27. 27. Organizational activities are rarely individualistic. Excel in non-suitable for collaborative initiatives as there is no central database with real-time accurate information Employee Appreciation & Productive Recognition
  28. 28. Reason #8 - A risky affair Employee Appreciation & Productive Recognition
  29. 29. 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 Employee Appreciation & Productive Recognition
  30. 30. Cake HR - Your HR. Simplified. Employee Appreciation & Productive Recognition
  31. 31. Are we blowing the issue out of proportion? People have been using Excel for years now!– We don’t think so Employee Appreciation & Productive Recognition
  32. 32. Seemingly benign human errors have led to dramatic and horrific business losses! Employee Appreciation & Productive Recognition
  33. 33. Case #1 - The TransAlta Mistake Employee Appreciation & Productive Recognition
  34. 34. One of the biggest Canadian Power Generator in American Continent suffered a humungous loss of $24 million. Reason? You guess it right. Excel Employee Appreciation & Productive Recognition
  35. 35. TransAlta CEO, Steve Synder, reported that the losses was an outcome of simple copy paste error which went unnoticed prior to bid submission. Employee Appreciation & Productive Recognition
  36. 36. Result of the spreadsheet error – Company bought more US Power transmission Contracts at higher prices leading to the fiasco. Employee Appreciation & Productive Recognition
  37. 37. Case #2 – Centre for Regional Strategies Employee Appreciation & Productive Recognition
  38. 38. 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 Employee Appreciation & Productive Recognition
  39. 39. 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
  40. 40. Case #3 – Dominion Transmission Inc. Employee Appreciation & Productive Recognition
  41. 41. The Natural Gas Provider reported incorrect figures of weekly Gas Storage resulting in false inflation of gas prices Employee Appreciation & Productive Recognition
  42. 42. The artificial price hike was estimated between $200 million and $1 billion. Consumers of the company sued it for this atrocious mistake Employee Appreciation & Productive Recognition
  43. 43. 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
  44. 44. Case #4 – Fidelity’s Magellan Fund Employee Appreciation & Productive Recognition
  45. 45. The company had to face huge embarrassment when their estimation to make $4.32 per share proved to be a failure Employee Appreciation & Productive Recognition
  46. 46. 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
  47. 47. Trivial Mistake with huge implications Fidelity Fund’s estimate was off by a staggering $2.6 billion What Is Employee Appreciation
  48. 48. After Thoughts What Is Employee Appreciation
  49. 49. 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 What Is Employee Appreciation
  50. 50. World is moving towards internet and cloud based Business Intelligence Tools and Software that make life easier and organized for HR Commu- nity What Is Employee Appreciation
  51. 51. Final Strokes What Is Employee Appreciation
  52. 52. 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 Business What Is Employee Appreciation
  53. 53. Cake HR - Your HR. Simplified. What Is Employee Appreciation
  • JasonHolcombe

    Oct. 21, 2016
  • arthurmurraylive

    Mar. 18, 2016
  • cakehr

    Mar. 18, 2016

The humble Excel Spreadsheets have been a trusted partner of HR professionals across the globe since its advent in ‘70s where it graduated in form and brand nomenclature starting with the initial VisiCalc, SuperCalc to improvised Multiplan, Lotus 1-2-3 and the very monopolistic Microsoft Excel. Whether it is attendance, payroll or leave management HR function gracefully progressed from paper records to excel sheets. Did it work? Well it did for some time, but not when it became increasingly evident that it has major lacunas, a reality which is surprisingly easy to ignore. So where is the epicenter of the issue with spreadsheets? One of the major drawbacks of Excel sheets lies in the fact that it is not sustainable for HR tasks that require complex correlations and real time analysis. Today a firm that uses Excel might have manageable employee strength and processes, but once the business operations expand, the use of spreadsheets becomes non-scalable. The other disadvantages of relying exclusively on excel sheets include compromise on the privacy of data and possibility of letting the information fall in wrong hands. Password protections don’t help as the files go through multiple hands at multiple levels. This makes any critical data highly prone to fraudulent use and worse even business losses. Not to mention the pain in consolidation that also sometimes leads to inaccurate status reporting considering there are various teams or departments involved. Testimony to the views expressed above is echoed in several organizational case studies that had to suffer losses in millions due to Excel Errors. We are sure you would be enlightened with the nuggets presented in the deck! As always we at CAKE HR would love to read your thoughts and feedback on this exciting topic. Feel free to share them in our comments section! :)

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