By Susan Glover, President of Susan Glover & Associates

As a consultant who developed many Excel based applications, I understand why firms love Excel and won’t consider other software. I also understand when Excel is no longer the right solution for an application.

That was then…

When companies began to embrace Excel, those of us who understood Excel’s capabilities were very excited. We quickly realized we could bypass IT and develop our own applications. We no longer dealt with an IT department that, we believed, didn’t understand our needs. We took control of macros and Visual Basic for Applications (VBA) to develop our applications.

…This is now

Times have changed and so has technology. There is a time and place for everything; including those applications you developed in Excel.

Reasons you may love your Excel based applications (but may be hurting your firm)

  • Familiarity – Everyone knows how to use Excel spreadsheets, but not everyone knows how to utilize macros and VBA properly to create an application. A little knowledge can be dangerous in a DIY approach.
  • Already developed an application that works – Does it really work? How well did you test your application? Would an audit of your billing, re-balancing, or other spreadsheets result in no errors?
  • The right price – You may be saving money in the short term, but an application that your firm has outgrown will cost your business more in the long term.

Reasons you should review your Excel based applications

  • Difficult database tool – Advisors and back-office staff are not trained to be database designers. Storing two-dimensional data in rows and columns is easy. Storing data for multi-dimensional formatting is a more difficult task.
  • Missing error prevention checks and handling of exception items – Common “checks and balances” are probably not included in your Excel based applications. Even if utilizing macros and VBA, your applications may not include procedures for error prevention and exception items. Does your application account for data entry issues such as account numbers that don’t exist, duplicate or over-riding data, and incorrect format?
  • Application serves only your needs – Others in your firm may have different needs and you must maintain several versions of the same application to accommodate other users.

Reasons you should consider other options

  • Application gets more complex over time – What started as a simple data aggregation process for a few clients has evolved into a more complex process. It may be difficult to analyze and compare changes in valuations or asset allocation along time periods. It may take too long to gather, input and process data for an increasing number of accounts.
  • Application needs more financial modeling and rules-based capabilities than you can manage – Your knowledge of Excel has taken you so far and you need more sophisticated what-if, goal-seeking and rules-based programming.
  • Too much time spent maintaining applications instead of servicing your clients – Applications are never static. You may find that you are constantly making changes to your application. Once developed, you will want to include additional functions or change the way data is processed.

Everyone knows how to use Excel.  Do you understand when not to use Excel?

Susan Glover & Associates, LLC is a consulting firm specializing in operating solutions for financial advisors and investment management firms.  Our services include the areas of transition, operations & technology management, and business support.

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