This blog post is for those dedicated businesses that are tracking KPIs (key performance indicators).
When I say “tracking” I mean that you have a set of meaningful measurements that you are reviewing with your team on at least a monthly basis. You may have multiple Excel spreadsheet or Google Sheets that you are using to keep track of all sorts of critical metrics.
If you’re not tracking KPIs, I would encourage you to do so ASAP. If you need help determining which KPIs to track, please contact us and we can help.
For example, last week we helped a $12M manufacturing company determine the right KPIs based on their strategic plan.
Please reach out if you need help. If you're not sure why tracking KPIs is such a big deal, please read this post on how we helped one company increase their profit by 135%! KPIs work.
Now for those of you who have a list of KPIs that you are religiously loading into an Excel doc on a weekly or monthly basis, I’ve got news for you. This could seriously hurt your business and is certainly eating up too much valuable time.
You may ask, "Why, I’m looking at the critical numbers of my business at least monthly ensuring we’re heading in the right direction".
Don’t get me wrong. Excel is an extremely powerful tool. I love Excel and use it often, but when it comes to tracking KPIs and keeping your team aligned, it falls miserably short and here’s why.
Excel Provides No Linkage Between Company Goals & Strategy
The first point is probably the most important one.
A KPI is a key performance indicator. When you’re tracking KPIs in Excel there is no easy way to link it to a company goal or the company's strategy.
Sure you could have a column next to the KPI which references a company goal, but that’s typically not how I see them represented.
For example, if your KPI is "Revenue", which company goal does that link to? What is the goal you are trying to reach for the year? There’s just no easy way to do this in Excel (unless you build a more complex spreadsheet that must be updated).
Often the revenue KPI is a result of multiple Excel spreadsheets that each member of the team is updating. I've seen one customer who has 5 separate spreadsheets that track both bookings and closed sales. Each individual spreadsheet must be updated, which then updates another spreadsheet to total results.
If you’ve come up with a way to clearly link your KPIs to company goals and then link those company goals to individual steps that need to be completed to ensure successful goal completion, I’d love to see it! Please email me at email@example.com.
Unfortunately, I don't see this happening with Excel...trust me, there is a better way.
It's Time Consuming To Manage All The Excel Docs
Like I mentioned earlier, I've seen customer who are managing multiple Excel docs. Typically, it's the CFO or controller who is tasked with pulling all the metrics together for a weekly or monthly meeting.
This process is time consuming and frustrating.
You Cannot Grant / Restrict Access To Specific KPIs Within An Excel Doc
What if you only want certain members of the team to see specific KPIs and restrict their access to more sensitive financial KPIs?
There is no easy way to do this. As a result, less people are given access and less access to information means poor communication. Poor communication equals poor execution and the ability to change course when necessary.
Because there is no way to restrict access, there is no way to clearly grant access or define accountability.
Who exactly is responsible for delivering the KPI result? A lack of clear accountability causes poor results.
To follow up on my previous point, this also means that less people are tuned into the company's goals and strategy.
“Errors in spreadsheets (Excel) are pandemic” - Ray Panko
According to a 2013 Market Watch study, up to 88% of all spreadsheet have some calculation mistake.
In the University of Hawaii article Ray Panko says, “Spreadsheets, even after careful development, contain errors in 1% or more of all formula cells. In large spreadsheets with thousands of formulas, there will be dozens of undetected errors.”
Excel is extremely flexible, but that flexibility opens users up to the potential for big calculation mistakes that can really cost your business.
You Can Lose All Your Excel Data
I had a good friend who was recently hit by the ransom virus.
If your are hit by this virus, a program is installed on all the computers in your company's network. The virus gets inadvertently installed when an employee opens a Trojan file they received in an email disguised as a legitimate file. The virus then encodes all the files (Excel files, Word docs etc) on your network. The hackers then request a ransom payment from you to get your data unlocked when they provide you an encryption key.
My friend had no choice but to pay (over $2000). Any guess what happened when he paid? Nothing. He didn’t even get access to his files!
So What’s The Solution To All These Problems With Excel?
I’m glad you asked. We’ve developed a product called Envisionable that solves many of these Excel problems.
Here's what Envisionable does....
- Easily link your KPIs to company goals – monitor and measure the things that really matter
In Envisionable, you can link a KPI and owner to each company goal. The system automatically creates a dashboard based on your selection. You can easily track your actuals vs. the target and the system can warn you when your KPI is in the red. No complex Excel calculations needed.
More than that, you can link initiatives and to-dos to those company goals further driving execution.
Lastly, if you need help determining the right KPIs we can help do that too!
- Envisionable allows you to grant and restrict access to each KPIs
Each user has their own unique login and KPI dashboard. You have the ability to grant access to the information your team needs. Increased access to information = increased results and faster execution.
- No calculation errors
Since the Envisionable application is hosted in the cloud, everyone in the company gets access to the same information and data. There is no risk of overwriting a calculation or copying and pasting the wrong information into the wrong cell.
- Hosted securely in the cloud
With Envisionable, your data is securely hosted on our remote servers. You have access to you data 24/7.
It can be tempting to use Excel to track your KPIs, goals and metrics, but you could be putting your business in serious jeopardy as well as missing out on some great additional functionality all for one low price.
Why not check out and Envisionable DEMO today? What do you have to lose (certainly not your data)....