Management Consulting Tools – 5 Ways Consultants Use Spreadsheets (That Could Be Improved)

By Edwin Miller

disconnected data

Of all the management consulting tools out there, the spreadsheet is possibly the most prevalent. Consultants use spreadsheets on a daily basis in the analysis stage of their projects, ultimately creating models that draw conclusions from a data set to inform the outcome of a project. Lately we’ve examined how the spreadsheet is becoming an outdated tool with alternatives that automate many of the things that must be done manually in spreadsheets. But in order to really understand how consultants would benefit from replacing spreadsheets with more updated tools, it helps to take a closer look at exactly what consultants do with Excel.

Here are a few examples of common ways consultants use spreadsheets and the problems that accompany them.

  1. Model Creation

Consultants use spreadsheets to create data models, a combination of formulas that manipulate data to form the main analysis of a project. Models need to provide accurate conclusions and also be easily understandable and easy to update. Ideally, a completed model can be used as a standardized asset that a firm can use over and over again to solve the same problem.

The problem with creating data models in spreadsheets is that they are not easily shareable or repeatable. They frequently live on individual hard drives rather than being stored in a central database where they can be used again. Rather than allowing a firm to use and build on existing models, firms are often forced to recreate the wheel every time, costing them both time and money. Consultants need a tool that stores their models in the cloud, allowing for easy sharing within the firm so that models can be used repeatedly and the firm’s intellectual property can grow continuously.

  1. Pivot Tables

Ask almost any consultant what his or her favorite Excel functions are, and pivot tables will almost certainly be one of them. Pivot tables have the ability to slice and dice data by any dimension of the data set, and they help consultants derive insights from data sets by comparing different parts of them. Ideally, they will help you understand what you can know from the data you have and where you need to fill in the gaps with further research.

But there are downsides to pivot tables. They are limited in capacity and only work smoothly with datasets that aren’t too big; when the data exceeds the capacity, Excel will slow down significantly or may crash. Additionally, some data isn’t conducive to pivot tables and must be converted into the correct format. Finally, pivot tables may not update when additional data is entered, requiring a manual update or an entirely new pivot table.

In place of Pivot Tables, what consultants need is

  1. Data Cleansing

Because data is collected in all different formats, collecting data in a spreadsheet often means that a number of different formats end up in a single spreadsheet. Not only is it important to have consistent formatting for the sake of clarity, but Excel can actually only handle a limited number of unique Go to the full article.

Source:: Business 2 Community

Be Sociable, Share!