Excel to ERP: Why you need to consider a switch?

Since its launch in 1985, Microsoft Excel has been the go-to business management software that executives around the world use to store and manage their day-to-day operational data.

However, brand recognition and longevity can only take an application so far. In the 36 years that followed, other solutions have outpaced Excel in terms of security, efficiency, and performance. This includes ERP platforms that centralize, organize, and automate processes and data across the enterprise.

Though Excel is cheap, simple and easy to manage, it also has many shortcomings in today’s world. If your company is struggling with scattered data, information silos and accessibility, this article is for you. But how to recognize the right time for the switch and what are the different aspects to consider before switching from Excel to ERP? In the Excel vs ERP debate, the latter emerges as the clear winner. Today, we are sharing a few key reasons why this is the case.

It is common for new businesses to start with software like Excel. It’s easy, understandable, cheap and most of us have used it before. When starting, Excel is good for managing basic business processes, reports and analysis. However, in a growing business, Excel may start losing its value due to a lack of visibility and flexibility throughout the company. Unfortunately, many companies miss the right time for the switch. But how to recognize the right time?

Here are some signs that suggest it is time for the change:

Switching to ERP will help to improve all stated signs and many more. You can forget multiple spreadsheets, double entries and loss of data. You will regain the real-time visibility of business processes like sales and finance. A fully integrated system will gather and analyze data you can now share between departments and offices.

Why should you consider moving from Excel systems to an ERP system? Let’s take a look at a few important differences:

• Potential for Human Error

Technically, any system used by humans is vulnerable to some degree of user error. However, if you have ever tried for hours to manipulate an Excel spreadsheet, you know the software is especially prone to user error.

In fact, according to research, more than 90% of spreadsheets contain errors. Most of this is due to the simple fact that Excel isn’t integrated or centralized.

Thus, even if various departments across your organization require the same data, they will likely use different spreadsheets. This is more than just frustrating and time-consuming. It also compounds the potential for errors, which becomes a risk each time a user populates a cell.

• Lack of Centralized Control

ERP software creates a single, unified source of truth based on reliable data. There’s only one version of information, and all users have access to it in real time.

This isn’t the case with Excel where it’s easy for employees to make changes to a spreadsheet, save it as a new version, and start sharing it. This makes it nearly impossible to know if your teams are working from the right dataset, or if it’s even accurate and up-to-date.

Sometimes, the associated risks are only minor. Other times, the inaccuracies can be detrimental. This is especially the case when it comes to production and supply chain management, where working off old or error-prone data could throw off your entire operation. This is why manufacturing ERP software is essential.

• Time-Consuming Effort

Rarely is an Excel spreadsheet quick to manipulate. Instead, most are dozens, if not hundreds, of lines long, with user input required for almost every cell.

Whenever your teams need to create a new report, they are required to make a new sheet. This is true even if they’re working from a template. Thus, the only way to effectively manage your inventory, for example, is to task someone with manually updating the data on a regular basis.

Then, there’s the issue of accidentally deleting an important spread. If you have ever clicked the wrong button or dragged the wrong file to the recycle bin, you know that file retrieval can take forever, if you are able to achieve it at all. The same applies to system crashes that delete your files if you failed to save them.

• Difficult to Collaborate

Sure, you can share an Excel file via email or upload it to a shared cloud location. However, for the most part, these spreadsheets are handled separately from the rest of your organization.

Even if your company was forward-thinking and invested in a mobile or cloud-based version of the Office suite, collaboration still isn’t seamless. For instance, the system can freeze up if multiple users try to access a spread at the same time.

In contrast, collaboration is a central tenant of ERP software. With a cloud ERP platform, your entire workforce can collaborate with ease, including both on-site and remote workers.

• Outdated Data Insights

If a change occurs, an Excel spreadsheet will not automatically update. Rather, an employee must go into the file and make the necessary changes. This can lead to lost data or duplicated data entries.

An ERP system provides real-time data insights, instantly viewable via a central dashboard. This way, users can easily search for and find the information they need and then share those insights across departments.

An ERP system allows you to track your information in real time without the need for multiple spreadsheets. This allows you to automate your sales order creation. You can now easily search for data, and efficiently share that data between departments. You also no longer have to be plagued by wasted time from making mistakes such as double entry or lost data. ERPs allow full visibility of business processes through real-time dashboards.

Most businesses acquire a huge amount of business-related data daily. An ERP system can efficiently use this data to provide critical insights into a company’s performance and improve your decision-making capabilities, and therefore your business processes.

Companies also have to make sure that their profits aren’t being endangered by its financial processes. ERP can deliver integrated financial workflow that can automatically collect billing data from every area of the organization. This guarantees a centralized process for all financial activities, including month end, invoicing, supplier payments, and payroll.

ERP can also analyse your employee performance compared to project costs and timelines. This is done through a comprehensive workflow system that provides your team with the information they need at any time to ensure that whatever project they’re working on is on target, including resource bandwidth and billable rates. This information lets you know if the right people are working on the right project at the right time.

Is your company prepared to switch from Excel to an integrated ERP platform? Before you choose an ERP vendor and begin implementation, there are a few decisions to make, first.

Consider Your Data Processes

Begin by mapping the data processes that your employees currently follow.

How do they capture information? Where do they store it?

Consider the different types of information they are gathering, as well as how they’re using it.

You might find you have been following processes that were put in place years ago but no longer meet your needs. Inefficiencies and pain points will likely become glaringly obvious, and this is an ideal time to address them.

Pare Down Data

Do you need to transfer all your data from Excel to ERP, or can you pare it down?

You may be able to leave behind some historical data, freeing up space and time. If you discover you need additional data once the migration is over, you can always add it later.

Plan Mass or Gradual Data Transfer

For some companies, it makes sense to complete a mass data transfer. However, the majority find it easiest and most beneficial to complete this process gradually.

The only exception would be if your teams need constant access to all your data, even throughout the transition phase.

As a project team, brainstorm which approach is best and how you will tackle it.

Selecting a vendor is the first stage in the migration process. However, the perhaps most difficult part is preparing your organization to migrate to a new system. Such a dramatic change requires a large re-evaluation of your existing data processes. Think about the information that your company currently collects, how that information is used, and what further information would be valuable.

As well as scrutinizing your data processes, you should also consider your historical data and think about how it’s used. How often do you use it? Is there anything you can get rid of? If you select a certain date, and only transfer files from after this date, you can streamline your processes, saving time and effort. You always have the option of re-adding data at a later time if necessary.

Another major decision that needs to be made at the transitional stage is whether the data sent over to the new finance system should shift all at once, or whether there should be a more gradual transition. Most of the time, businesses profit from a steady process, but sometimes a quick transition is necessary. For example, sometimes the data is used regularly and needs to be accessed in its entirety, even during the transition.

At the end of the day, your specific business processes must be considered. This is an important step, as it makes you aware of what kind of system your organization actually requires. This will help you evaluate the options you have to consider when installing ERP, including both out-of-the-box and customized functionality.

For example, some ERP systems prioritize certain functionality such as marketing, which may not be suitable for a company that already outsources its marketing tasks. There are many different ERP systems that are tailored to many different types of organizations, so it’s just a case of searching for one that suits you.

If you are still relying on Excel to handle the day-to-day activities of your in-house team, it’s time to consider an ERP implementation. While Excel can be helpful in some instances, it doesn’t offer anywhere near the bandwidth you can enjoy with an ERP system.

When comparing Excel vs ERP, it becomes obvious that ERP wins in terms of data reliability, user control, and enterprise collaboration. If you are ready to make the switch, our ERP consultants can help. Request a free consultation and we would be glad to assist.

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