If our rotting economy causes most of our business problems these days, why is it that so few Excel reports and analyses include data about the economy?
These days, the road to business success seems to lead through a maze. Relevant economic data is like a photo taken from above the maze; it offers a view that helps managers find a path to safety. So it’s a mistake to deprive them of this information.
All the economic and business data your managers need is available on the web, probably for free. And before the end of the month, you’ll be able to use spreadsheet formulas to display that data in your reports, analyses, and forecasts.
Here are ten ways that spreadsheet data could help to improve your company’s performance…
1. Track Key Regions and Industries
If your business concentrates on certain geographic regions, you could compare the trends in your company’s performance in those regions to the economic health of those regions. Or if you concentrate on certain industries, you could do the same for those industries. Or both.
2. Monitor the Financial Performance of Large Customers and Competitors
You could help your managers track the financial strength of key customers and competitors, and show how those trends correlate with your own company’s performance.
3. Benchmark Your Company’s Financial Performance Using Relevant Measures
Theoretically, you could compare key performance measures for your company to the same measures for your industry. This could help you uncover areas of performance you might need to improve.
Unfortunately, standard industry statistics often are meaningless for this purpose. But you could generate your own industry measures using company data from the Web, giving you great financial benchmark data.
4. Track Inflation, and How It Affects Your Company, Customers, & Competitors
There’s a massive amount of data online about trends in the cost of everything from salads sold in bulk to the cost of paper boxes to the price of electricity. This data can help your managers budget and control costs more effectively.
Strategically, this information also could help your managers find ways to make life easier for your customers and more difficult for your competitors.
5. Improve Your Forecasts
If you ignore economic forecasts, trends, and leading indicators, your own forecasts could be horribly wrong.
On the other hand, if you base your forecast on formulas linked to both internal and external data, you could improve its accuracy significantly. You also would have a rolling forecast that you could update merely by recalculating your workbook.
6. Maintain a Strategic Early-Warning System
No matter what your company does, no matter where it operates, the web has data that could warn your managers about potential problems and opportunities ahead. So an Excel-based Early Warning System (EWS) could give your managers the time they need to escape disaster.
7. Plug Your Managers’ Knowledge Gap
Because your company is unique, it’s affected in unique ways by outside forces. But few managers know how those forces are trending or how they could affect your company.
A simple Excel dashboard showing trends in key economic, business, and government data can keep your managers better informed about their business environment, and help them make better decisions.
8. Justify Price Increases
The Consumer Price Index has begun to rise more quickly. And the Producer Price Index has been rising at almost a 10% annual rate for more than a year. So your company might need to raise prices soon.
How will you justify your price increase to customers who still think inflation is under control? You can’t show them your financials, after all. But you can show them Excel charts with trends of key price indexes from the web.
9. Provide Strategically Important Insight
In 2009, Caterpillar’s sales dropped nearly 50%. Even so, the company made nearly a billion dollars that year, and had a positive cash flow. The company was prepared to act swiftly when the crash came because their economists had given their managers plenty of warning.
Although you’re probably not an economist, easily available web data could help you discover strategically and tactically important information that your managers urgently need.
10. Spider Your Way to New Business Insights
With web browsers and with Excel’s Web Query tool, you’re accustomed to viewing one web page at a time.
But what if your Excel formulas could list many URLs from one web page, like a search-result page, and then summarize data from each of the pages to which those many URLs point? You could summarize data from hundreds of web pages with one calculation, and save yourself dozens of hours of research each time you update your Spider Report.
(Update:) On October 31, 20111, I introduced KydWeb, an Excel add-in that allows Excel formulas to return just about any data from the web. It’s the only practical way I know for Excel users to treat the web as a massive source of business data. So you’ll be able to implement these ideas.
I’ve been working on this solution for about 15 years, off and on, and for 90-hour weeks during the past six months. I’m really excited about it, because it represents a significant advance in the value that Excel users can bring to the companies they work for.
In my next post, I’ll tell you about my favorite source of business data, and show you how easy it is to use the data in spreadsheets.
Also, watch for the free download I’ll tell you about.