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Spreadsheets vs. Databases: The Right Tool for the Right Job

Part I: Introduction

Productivity software has made an enormous contribution to the workplace.  Tasks that formerly took hours or days to complete can now be completed in minutes.  Spreadsheets have probably had the biggest impact.  Walk into any finance department in any organization and they are probably using Excel to do everything from fixed asset depreciation schedules and Excel-based subledgers to financial reporting.

Spreadsheets are a great tool but they have their limits.  If you have an Excel workbook that utilizes multiple links to external files or you have a larger number of tabs in your workbook, you are headed for trouble.  Consider this, what happens to those external links when the file server the referenced files are sitting on needs to change? Answer: the links break!  By having a workbook with many links you have inadvertently created a monster.  If the directory path for any of your linked files changes, you have to rebuild links.  If you have a file with 200 links, then you have to rebuild 200 times.  Fortunately, the chance of a file server needing to be replaced or upgraded almost never happens.  The chances of your IT department re-mapping your shared drives without notifying you beforehand are remote. Right?

A work book with many tabs becomes unmanageable at some point.  The record that I have personally seen is about 70 tabs.  70!  How can a user even efficiently navigate through that many tabs?  In theory providing you have enough memory available, Excel can hold many more tabs than 70 but just because you can doesn’t mean you should.  Our spreadsheets are out of control people.

Spreadsheets work incredibly well as a presentation layer for data.  You can quickly create high quality graphs, tables and charts.  It is the essential reason why spreadsheets remain such an integral part of the so called “last mile” of financial reporting.  Spreadsheets are not, however, the best tool to use for transformation or querying large amounts of data.  That, my friends, is best done by a database.

In the upcoming series of blogs, I will lay out the case for databases.

 

 

Comments

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Don't forget with a centralized database, more people have access to the data, versus a single person with a spreadsheet; (to the purists, you can share spreadsheets and work in conjunction, but there are in my mind issues surrounding this attribute).

Gregory Q. Jenkins
Title: President
Company: Quentasia Industries Incorporated
(President, Quentasia Industries Incorporated) |

I absolute agree. I will be mentioning that in part II of this series of blogs. Spreadsheets give people more control and are more easily understood but databases are a more structured environment.

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