Sage Advice UK

Why an integrated HR and payroll system beats spreadsheets

Transitioning to an integrated HR and payroll system can resolve problems caused by multiple spreadsheets.

As the amount of data handled by businesses continues to grow, it can become increasingly difficult to manage this wealth of information and ensure it is used correctly.

Spreadsheets have traditionally served as a major solution to this problem, and Microsoft Excel has been adapted so that it can accommodate millions of rows of data.

However, the existence of multiple spreadsheets across an organisation – or between employees belonging to different companies – can cause significant problems as complexity increases.

Problems created by multiple spreadsheets

Accessibility can become an issue when multiple spreadsheets are used – often, the fact that spreadsheets cannot be accessed by everyone means the relevant data is not always available when it is needed.

For larger firms, this problem can become more acute – having various people who manage personnel data can lead them to become person-dependent if certain information is required.

One of the major problems this approach creates is that it increases the probability of errors creeping into an organisation’s data – mistakes that can harm the reputation of a company.

As our infographic points out, global financial services firm JP Morgan made a mistake in copying and pasting over multiple spreadsheets when transitioning to a new value risk model. As a result, the company sustained losses of up to £1.3 billion.

At a time when greater scrutiny is being placed on organisations’ reputations, they cannot afford to be making such mistakes. Once spreadsheets have multiplied, it becomes difficult to control them. As a result, accountability problems can arise, as it becomes harder to keep track of who has changed a spreadsheet, where it is stored and how many versions exist.

Needless to say, with a loss of accountability, accuracy can also be a problem. If one error is made, this can become duplicated by another user, causing potentially serious errors further down the line.

Multiple spreadsheets can also cause problems for data analysis. If different spreadsheets hold different information about a particular subject, then linking this information can become problematic – and time-consuming for employees.

Another difficulty often encountered by organisations is that having a large number of spreadsheets can cause problems when interpreting the data. As there is no standard template, one employee’s method of formatting a spreadsheet can be hard for other workers to interpret.

Transitioning to an integrated system

Identifying these issues can help you to develop a business case to support your transition to an automated HR and payroll system.

Many of the problems are not readily apparent, as spreadsheets are still considered to be the best way of managing large amounts of information by business leaders.

Once these issues are identified, however, it will become obvious how much unnecessary time is being invested in dealing with multiple spreadsheets – time that could be better spent on carrying out core business processes.

The threat to businesses’ reputations that can arise from this method of working can be significant – and in a culture that is increasingly sensitive to reputation, it is essential to avoid these risks.

Persuading senior management of the need to transition to a new system can be a difficult task – but once its advantages, and the deficiencies of the current method, are presented in a robust business case, your task will become significantly easier.