A Microsoft Excel dashboard is exactly what it sounds like. It’s a dashboard you can make within Excel. And business people at your organization love a good dashboard. It helps them get the gist of what’s going on at a glance.
But Excel dashboards have a good side and a bad side.
The good: Anyone can build an Excel dashboard.
The bad: Just because you build a dashboard doesn’t mean it’s meaningful.
So, are Excel dashboards the best way to communicate business information? That depends on how you use them.
According to the Harvard Business Review, there are definite drawbacks to using data-driven dashboards. And that typically depends on how the dashboards are using data.
“Although they can convey snapshots of important measures, dashboards are poor at providing the nuance and context that effective data-driven decision-making demands.”—Harvard Business Review
3 Ways Excel Dashboards Fail at Business Intelligence
There are ways that dashboards fail businesses. Maybe they include data that doesn’t matter. Perhaps they provide data without context. Or maybe they group data together to imply connections where there aren’t any.
In much the same way, there are three key ways that Excel dashboards fail to provide business intelligence.
1. Using Old or Bad Data
At a glance, Excel dashboards convey snapshots in time. So what happens if the dashboard provides an old snapshot of time?
That doesn’t give you the up-to-the-minute data you count on for making decisions. And if you act on that information, that could lead your business down the wrong path.
Say you’re looking at sales trends. But the dashboard only includes data from six months to a year ago. You’re missing a key piece of the picture if you’re missing the latest data.
And when you keep data in Excel, it’s easy for it to become static. (Static data is data that doesn’t update.) So, it’s easy for Excel dashboards to fall victim to out-of-date data—and that fails your business intelligence strategy.
2. Sharing the Wrong Data
At the same time, it’s easy to share the wrong data in Excel dashboards.
Not all data is going to be relevant in every scenario. A key component of business intelligence is being able to present the right data at the right time. The wrong data just won’t do.
Say you’re a warehouse manager keeping an eye on inventory levels. You need a dashboard that can tell you where your levels are at. So, if you’re looking at a dashboard that just tells you how many products were sold, you’ll be looking at the wrong data. You’ll be missing the context of what the inventory levels were before and after those sales.
It’s common for the wrong data to find its way into Excel dashboards. That’s because Excel itself is not a source of data. It’s just a tool for digging into the data. The wrong data can easily be grabbed and put into an Excel dashboard. And that’s another way Excel dashboards can fail at business intelligence.
3. Delivering Data without Context
Delivering a spreadsheet packed with insightful data is great. But without context, data is just data. It won’t have meaning.
If you pull some data, pop it in a spreadsheet, and send it over to your finance department—without any context—it could lead them down the wrong path. For instance, if you are showing this year’s revenue on one side of the dashboard and marketing activity on the other side, your audience would assume their related. But marketing activity might just be one piece of the puzzle.
With Excel dashboards, you have to be careful. It’s easy to rush through building the dashboard—and neglect to think of context. And that’s how Excel dashboards can fail at business intelligence.
How to Make Excel Dashboards Work
Excel dashboards have their pitfalls. But you can make them work for you if you do them right.
After all, data visualization can be an awesome way to empower business users with information. Not everyone is going to understand the rows and columns of data—but they will “get” a chart or graph.
Building Excel dashboards isn’t just about the technical steps to creating the dashboard. You also need to think about your own reality. What does your organization need out of an Excel dashboard? How can you build the dashboard to satisfy those needs?
Keep Them Up-to-Date
It’s hard to keep a static Excel dashboard up to date. Data changes constantly. And your Excel dashboard won’t be able to keep up on its own.
One way you can make sure your Excel dashboard stays up to date is linking it with your business intelligence tool. You should set up a connection so that data updates in real time. That way, you can be certain that your Excel dashboard is communicating accurate information.
Make Sure the Data is Relevant
Not all data is going to be relevant to every audience.
But you can make sure that your Excel dashboard is communicating relevant data by thinking of your audience first. If you’re building a dashboard for sales, make sure you have the right sales data. If you’re building it for a warehouse manager, make sure it includes inventory levels. And if you’re sharing data with executives, make sure you communicate business value—not just data points.
Establish Your Key Performance Indicators
Without context, your data means nothing.
One way you can make sure your Excel dashboards convey context is to establish key performance indicators (KPIs). KPIs can be your guide to including relevant information on your dashboard. The right KPIs will depend on your business. But KPIs need to be something that can be measured and monitored—at minimum.
When Excel Dashboard Aren’t Enough
At the end of the day, an Excel dashboard is just a spreadsheet with stuff on it. It doesn’t create the data, and it can only pull data in from other sources.
The best way to use Excel dashboards is by pairing them with a business intelligence tool. That way, you can make sure you have the real-time data you need.