When we talk about effectively tracking inventory and sales data, there’s no greater source of truth than the Excel spreadsheet, right?
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In fact, various studies report that almost 90% of spreadsheets contain inaccuracies – most caused by human error. Despite these findings, 46% of SMBs still use manual inventory management methods or don’t track inventory at all. For multichannel businesses with complex data streams, that’s a headache waiting to happen.
For a huge number of businesses ranging from one-person startups to multinational corporations, word is bond in the spreadsheet universe. But what happens when human error comes into play?
In 2010, the economics paper Growth in the Time of Debt was used to justify austerity cuts around the world on the basis of data showing that national debt over 90% of GDP stifled economic growth. But the paper’s Harvard economist authors were wrong: their spreadsheet didn't analyze all the data and, when corrected, the effect disappeared.
Barclays wound up buying 179 Lehman Brothers contracts unintentionally during the GFC when a pair of junior lawyers converted an Excel spreadsheet into a pdf document, accidentally revealing rows that were supposed to be hidden. It’s estimated that the spreadsheet snafu ended up costing the bank millions.
Even British intelligence agency MI5 ended up bugging more than a thousand incorrect phone numbers ending in 000, rather than the correct last three digits, thanks to a spreadsheet formatting error.
If Harvard academics, a multinational bank, and an international intelligence agency can get it so wrong, it goes without saying that multichannel eCommerce businesses should tread carefully when it comes to relying on spreadsheets.
Although every business should be wary of the potential for error with spreadsheets, multichannel businesses are especially susceptible simply because the more data sources involved, the higher the likelihood of something going wrong.
Businesses with multichannel inventory management requirements and global supply chain ecosystems have to deal with a more complex web of interrelated dependencies spanning inventory, accounting, orders, receiving stock in multiple locations, reporting, demand forecasting, and more.
Integrating and tracking data across all these moving parts using manual data entry isn’t feasible long-term. The statistics speak for themselves: a third of businesses say that spreadsheet errors have caused poor decision-making. In the words of Warren Buffett, “Beware of geeks bearing formulas.”
It’s the eternal question for business owners: Do I make an investment now in the hopes it will pay off later, or do I retain profit to maintain cash flow?
An integrated cloud data management system is one investment that multichannel businesses should be confident in, because it begins paying dividends almost immediately in the form of cost- and time-savings. Consider the outcomes:
And that’s just scratching the surface. In our upcoming multichannel business blogs, we’ll dive deeper into how multichannel businesses can equip themselves with the right tools and strategies for sustainable growth and international expansion.
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