Why I hate Excel

A fundamental question: What is Excel? Seems silly, no? Isn't Excel a technology-based tool for helping to answer financially focused business questions? For running scenarios and what-ifs?

Excel does all of these things and over time has become increasingly powerful. Some decent data management and reporting tools, easy synchronization to QuickBooks, and all the statistics a business user could want.

So why do I hate Excel? It's not the tool itself but the impact it can have on decision making. There is an addictive quality to creating spreadsheets--almost like gaming. Spreadsheets have gotten increasingly complex and with every additional tab, link, and pivot table, potentially further from the reality of how business operates.

Energy gets burned on discussions of whether the assumption of gross margin or number of inventory turns is "right" ten quarters in the future. Decisions about how to advance the business take a back seat to the next Excel iteration. Late nights before board meetings are spent getting the model tweaked to perfection.

Obviously financial analysis is key to good decision making. But Occam had it right. For most businesses there are a handful of activities that drive success or failure and attention to those drivers always trumps time spent with spreadsheets.

Financial analysts of the world unite and throw off your chains! Take a customer to lunch!