All organizations thrive on data to monitor performance, track goals, plan for the future, and make critical business decisions. But as businesses scale up and grow bigger, tracking, analyzing, and trying to make sense of all your data can get overwhelming.
Many businesses initially turn to Excel spreadsheets to house their data. Still, as the company grows and the volume of data expands, working with and managing data using Excel will start to take longer, more tedious, and more challenging to trace and reconcile.
Organizations need a powerful tool that can help them efficiently use their data and guide them effectively in making critical decisions.
Business Intelligence (BI) tools can analyze and handle all of this data while maintaining data accuracy and ensuring integrity through smart workflows and advanced analytics, no matter the volume.
This article will explore why business intelligence tools are better suited than Excel for financial modeling.
BI Tools Offer Real-time Data Analysis; Excel Does Not
As with any growing organization, it’s essential to have ready access to accurate and real-time data that is actionable. This is so C-suites can easily spot new opportunities or problem areas, streamline processes as needed, increase sales, and maintain a competitive advantage.
Excel is useful for so many things but analyzing data isn’t one of its strong suits. It’s difficult to make informed decisions when mining your data alone is challenging or if your data is filled with difficult to trace discrepancies. When used alone, Excel cannot analyze data crucial in making important business decisions.
Another common problem with using Excel is that you can only access the most recent data in your spreadsheet. Not being able to compare your latest numbers with historical data means you don’t have a full view of your data to make realistic forecasts, which is easily addressable with the latest BI tools.
BI tools can provide financial analysts with an expanded view of the data at hand, giving them the vantage point to quickly identify notable trends and adjust their decisions according to any new data.
BI Tools Update Your Data Automatically; Excel Is Manual
Unlike more advanced BI tools, any changes to your Excel formulas will need to be done manually. Any changes you make to a single cell can warrant a chain reaction across your data that you may not like to happen. It’s also difficult to track if users are working on the latest version of the spreadsheet, leading to further discrepancies in your reports and impacting business decisions.
On the other hand, BI software auto-updates with your most recent data and in real-time, usually set off by a trigger that you can customize. This means you never have to worry about updating anything manually, such as formulas and pivot tables. BI tools give you better version control and minimize error, so you know you’re always working on the latest set of figures for your business.
BI Tools Support Real-time Collaboration; Excel Does Not
Excel users are limited to only one user at a time unless a shared workbook has been set up, which can also be buggy. You can’t check any real-time changes from your collaborators as all of these are only updated once the file is saved.
BI software makes it easy to update files while collaborating with other users through live annotations, email triggers, and notifications for file changes and every task assignment specific to role-based access. Most BI tools also come with advanced data sharing features that make it convenient to access dashboards on any device. It’s also easy to link data from multiple sources using BI software.
BI Software Provide Better Security
Security in Excel is limited to workbook passwords and file encryption, which may not always be practical when sharing data with multiple users. When it comes to analytics, people need to access and update data as they share it across the team, which can be tricky when using Excel.
BI software provides better security and reduces the risk of data breaches with server security, access controls, and secure portals where teammates can safely access their shared dashboards and work in confidence.
Scaling Your Financial Modeling with PCF Cloud
For some organizations, using spreadsheets may continue to work well for their current needs, but those who are more forward-looking would want a genuinely future-ready software that can scale with their business as it grows.
And because they are more lean and adaptable, the best business intelligence tools like PCF Cloud would be a more worthwhile investment. You get better data visualizations and access to real-time data and reports, which allows you to easily create dynamic financial models that can give you a more accurate outlook on how your business is performing.