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Use Business Tools With Excel to Save Time and Money

Business tools can improve business performance. Rather than spending thousands of dollars to support these tools, you often can use Excel instead.


by Charley Kyd, MBA
Microsoft Excel MVP, 2005-2014
The Father of Spreadsheet Dashboard Reports

"Business Tools" are reporting and analytical methods designed to improve business performance or to reduce risk. The term was popularized by Bain & Company.

Whenever a new business tool starts to generate some buzz, dedicated software tends to spring up to support it. And web pages spring up to promote that software. We can get a rough idea about the popularity of these tools by counting the web pages that promote  them.

To illustrate, the following table shows the hits I found recently when I searched for words and phrases that describe a variety of business tools.

Search Text Google Bing
budgeting software * 5,760,000
analytics software * 1,430,000
"Six Sigma" software * 1,370,000
"business intelligence" software 37,500,000 116,000
"strategic planning" software 27,700,000 232,000
"Monte Carlo" analysis software 23,100,000 547,000
CRM "customer relationship" software 16,800,000 8,880,000
economic EVA software 14,900,000 423,000
Sarbanes Oxley software 650,000 483,000
TQM quality software 570,000 20,600,000
"Balanced Scorecard" software 542,000 298,000
"activity based" management software 487,000 185,000
* Ads obscure the results

Certainly, a percentage of these hits has little to do with the business topic implied. And many results are from multiple pages within a smaller number of web sites. Even so, these numbers suggest that many different web sites have been set up to sell and support these business tools.

The Benefits of Using Excel to Implement Business Tools

Companies that plan to use a business tool must decide whether to buy special-purpose software, or to use Excel. That decision could affect their bottom lines significantly.

Of course, software vendors will try to convince you that their products offer the best value. At times, they could be correct. But many times, Excel offers the best solution.

Using Excel where possible offers significant benefits:

The Excel Solution Costs Less

When you implement a new business tool, you typically have two choices. On the one hand you might need to buy an Excel-friendly OLAP database. On the other hand, you typically would need to buy special software to support each business tool that you want to use.

In either case, you already own Excel. And if your company is like many, you also already own the OLAP product. The first choice allows you to use software you already own. The second forces you to buy software for each business tool you implement.

The Excel Solution Is More Flexible

When you implement business tools with Excel, you can implement them to whatever degree you want. And you can modify them to meet your needs.

But when you buy software specifically designed to support a business tool, you buy into the author's design and assumptions about your business needs. Those assumptions might be on the mark, or completely incorrect.

The Excel Solution Adds Power to Your Existing System

Generally, tool-specific software maintains its own database, and often requires data from new sources. This tends to create a "silo" of data that's isolated from the rest of your information system.

On the other hand, Excel solutions—particularly those using an Excel-friendly OLAP database—can share their data with other solutions. As a consequence, silos never develop. This allows each new Excel-based tool to benefit your entire system for management reporting and analysis.


In short, when you're thinking about using a new business tool, Excel often is the best software for supporting the tool.

 

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