Dump the Spreadsheet

by Paul M. Done

It started innocently enough in 1979 as a tool that made the microcomputer a serious business tool instead of an electronic geek’s garage hobby. Visicalc was the first computer spreadsheet application made popular due to its relative ease and powerful analytical capabilities. Since then people have spent countless hours developing and recording information for activities such as balancing their checkbook or managing inventory. Computer applications have made great advances since Visicalc sold it’s first 600,000 copies in 1979. Even spreadsheets have followed the trend as they become graphically based, packaged in office suite software and improved to include massive field and records.

The result however is the data silo. Data silos occur when a person or small workgroup collect data and organize it into file based applications that become the de-facto source of decision making for the organization. Data silos usually rely on the collective knowledge of the current participants and require specialized training for new comers. Typically the data is not transportable and and has limited analytical potential without being converted into another format. Large spreadsheets are cumbersome and lack the ability to perform medium to complex analysis of the data to gleam timely and useful information. Spreadsheets (flat file data repositories) lack triggers or actions that incorporate business logic or managerial processes when data has been entered. In short, the spreadsheet is holding back organizations from effectively using the information they dutifully collect and attempt to analyze.

In a 2002 survey the Coda Group found that 60 percent of Chief Financial Officers in mid to large corporations could not get the information they needed to measure business performance effectively. The survey cites the reason for this is 98 percent still use basic manually updated spreadsheets to analyze financial information. It is noteworthy the Coda Group provides business financial products, but the point is nonetheless valid and continues even today. Spreadsheets are not the tool that should be used to properly analyze live, ongoing data, historical repositories and especially in workgroups or where moderate to complex analysis must take place.

Raising the Bar
For our service driven, information dependent organizations to succeed we must raise the bar. Raising the bar builds upon our workforce’s (now) innate ability to build spreadsheets for collecting information and convert these into live distributable decision tools. Doing so will require that executives, mid-managers, and those who support their efforts understand the relational nature of storing, retrieving and collecting data. No longer are data structures the thing of computer scientists; instead these skills are required among workers in any service organization where data is used to develop information which in turn enables the intelligent manager to make informed decisions. These skills for a new millennium are not difficult to acquire.

Information workers, those who collect, synthesize and process data into useful information must understand the data is similar to an event. Where the event is uniquely identified in terms of time and space it contains data unique to itself.

The easiest example is a credit card purchase; the purchase is uniquely identified by a transaction number and a specific moment in time. This transaction includes the purchasers name, amount, location of the purchase and may include multiple details about the transaction. To efficiently record this transaction and all its related details the transaction is recorded in a “worksheet”, the buyer information in another sheet, and items purchased in another “worksheet”. This efficiency is easily attainable when taking this out of the context of worksheets and considering these things in relational tables as would be found in a normalized database.

Preventing Glassy-eyed Executives
At this point we stop the technical discussion. This serves as a launching point for understanding the necessity of basic requirements that should be had among modern information workers. In the last century the necessity to use a typewriter was enhanced as word processors became prevalent. Even in the 1990’s few organizations hired people without basic word processing skills. Today organizations that do not require information processing skills tend to react to conditions, rely on hunches and guesses, and evidence the results of their decision making made in virtual vacuums. Conversely, organizations that enable strategic data storing methods tend to work smarter, share and transfer information and have a wider collection of available information to make decisions.

References
Hoch, D. J. (2000). Secrets of software success: Management insights from 100 software firms around the world. Boston, Mass: Harvard Business School Press.

Turner, David (2002). CODA Survey shows over 60 percent of global corporations measure business performance ineffectively. Harrogate, United Kingdom: M2 Presswire.

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