The Focal Point Blog // Operations Best Practices // Dave Annis // April 8, 2022

5 Reasons your Spreadsheets are Holding you Back

When you first started your digital services company, you likely began building spreadsheets to collect data in a way that represents how you think.

These homegrown tools are a great place to start as you are getting your business off the ground because at this point, you’re small (and smart!) enough to be able to wing it and count on your team’s gut instinct to make early calls.

You’re probably reading this post right now because you realize that as you’ve continued to grow, your homegrown tools are starting to become too clunky, cumbersome, and complex to manage. This can be due to a host of reasons (more on that, below), and ultimately result in your team becoming reliant on a network of spreadsheets that require you to continuously piece together (and fix!) disparate data sources to meet your growing needs for sales forecasting, capacity planning, and revenue forecasting.

Not only does this homegrown spreadsheet solution eat into the time your limited resources could be spending on your craft (the billable work you love to do), it also becomes a burden and adds risk to the growth and evolution of your business.

Here are 5 key reasons your spreadsheets are holding you back from growing and evolving your digital services company, and what you can do about it.

1. They require manual effort to maintain

Everyone can agree that spreadsheets are hard to maintain, requiring a lot of manual effort. Even though correctly inputting data into different sheets is a time-consuming, error-prone process, it can still produce valuable insights, especially when the business is smaller, less complicated and doesn’t require a lot of data to work with.

The challenge comes as you continue to take on new and exciting work. The manual effort required to maintain your homegrown system of spreadsheets will start taking up a lot more of your time than it used to. More time from your team members needing to constantly check for data accuracy, ensure macros and formulas are correct, fix broken links, search for and piece together disparate data from multiple disconnected systems – all of which eats into the time they could be spending on billable client work.

All of this manual effort leads to the potential for human error, potentially eroding the confidence you once had in the insights this web of spreadsheets produce.

2. They don’t allow for timely forecasting

As your business continues to grow, the ability to forecast becomes much more impactful on your operations. Accurately forecasting projects and revenues help your organization make the right hiring decisions, price projects correctly, and manage resources effectively. Growing digital services companies often continue to rely on interconnected spreadsheets to create forecasts, because this is what they know and what they built their operations on. At this stage, the way to generate these forecasts involves inputting data across multiple spreadsheets mentioned above over the course of a few days or even weeks. 😱 And by the time you’ve produced one forecast, the rest of your team has already moved on to the next ask. This reactive cycle can be tough to break when you’re relying on a homegrown forecasting system.

It might not feel like it right now, but this is a good problem to have! You’re hitting a point in your growth where you recognize that you need data visibility and insights to better plan ahead and make smart investments, but also realize that your current process for generating forecasts is too slow to be meaningful.

3. They are difficult to integrate

Getting your ever-expanding network of spreadsheets to work with the rest of your growing technology stack is a massive headache, and oftentimes not even possible as your business continues to grow. One incorrect formula or piece of data can affect projects or forecasts and have negative consequences on your bottom line.

That’s because your spreadsheets are not built to be integrated easily into other systems!

Your beloved spreadsheets have served you well up until this point, but you now have too many inputs and variables to consider that affect the outcome and profitability of a growing number of projects. Continuing to rely on a system where both the data and formulas can be wrong is a risk you can no longer afford to take. What you really need are data-informed insights in order to make smart strategic, hiring, and operations decisions that come from an integrated data system.

4. They require a massive learning curve

Learning how to update, operate, and get answers from a unique system of spreadsheets you custom-built is a difficult task for even the most experienced spreadsheet users. Remember how you built this system based on the way you think? Your new hires might think in a different way, and want to update the system you built to do things a bit differently.

It also takes additional time to train them how to correctly use the unique system you created, which is once again time they could be spending on the billable work you brought them on to do. The additional learning curve to get onboarded to a unique system could have an early negative impact on their morale and productivity.

Additionally, this can impact your ability to hire top talent. In this hiring market, potential candidates have more power in choosing their employer, often basing these decisions on the tools they’ll have access to. Although you may understand and appreciate the intricacies of your spreadsheets, new hires want to work for companies that understand what good looks like and supply their people with the best-in-class tool kits.

5. They inhibit problem solving

Your project managers are responsible for a lot! They are often evaluated on their ability to keep projects on time and on budget while keeping the team happy, and are most often tasked with solving problems on any given project or client as quickly as they arise, which any seasoned PM knows can happen on a daily basis. This is no easy task.

Let’s say you’ve hit a delay on the mobile app project you currently have underway, and your client is asking for a timing and budget status report to understand why and how to get things back on track. When you’re using a manual system of spreadsheets, your PMs end up in reactive-mode, spending hours or even days gathering inputs from other employees on how much time they’ve spent on said mobile app project, what’s been billed to date, what delays to account for, and manually entering them into several disconnected spreadsheets.

In addition to the time spent gathering initial data, your PMs are then burdened with developing actionable insights needed to explain why this project is delayed, and what it’s going to take to get things back on track. As you continue to grow, this haphazard process is now too slow to be actionable and creates a lot of unnecessary bottlenecks, where the time spent gathering and analyzing data could have actually been spent working directly with the team to solve the problem at-hand. What they really need are systems that stay up to date in real-time through integrations vs. manual upkeep of spreadsheets.

Parallax helps reduce your reliance on homegrown spreadsheet systems

Thankfully, there are professional services automation platforms that can help reduce your reliance on unique and homegrown spreadsheet systems as you continue to grow and evolve. Using a tool like Parallax can also make it easier to adopt agency best practices related to sales and operations, which means you can focus more on what actually makes you unique: your craft.

By integrating with the tools you already use, Parallax gives you real-time visibility into accurate data and business insights, and allows the parts of your existing system to speak to each other – from pricing estimation all the way to project completion. You can also run reports that answer your most pressing questions, and you can use these insights to more confidently forecast sales opportunities, conduct capacity planning and forecast revenue.

Additionally, Parallax’s integration-first approach allows you to keep the tools you already use and love with thoughtful and strategic integrations that fill the gaps that digital services firms often face with their cross-functional systems. All of which result in less headaches for project managers, as they no longer have to cobble together homegrown spreadsheet solutions!