As the wave of digitalisation sweeps over the food and beverage industry, companies are scrambling to leverage business intelligence despite being limited to inadequate tools.
Is Excel still worth it for F&B businesses?
Reasons for F&B business to move on from Excel
#1: Excel is time-consuming and prone to human errors
#2: Excel scales poorly
#3: Excel is a jack of all trades but master of none
Superior alternatives to Excel
Is it time for you to graduate from excel
Microsoft Excel has been a staple software program for many businesses since the 1980s. Since then, the spreadsheet has changed the way small businesses handled their accounting and budgeting, managed their inventory, tracked staff hours, and monitored projects among other things.
Other spreadsheet programs have since come and gone, but that hasn’t slowed Excel down one bit—and for good reason. Excel is cheap (the subscription version of the software starts at US$8.25 per user), relatively easy to use, and can adapt to any organisation’s needs. These factors combine to make Excel Microsoft’s most important software product, with an estimated 750 million users.
is excel still worth it for f&b businesses?
Excel’s ability to create expense reports, track budgets, and produce inventory forecasts among others has naturally made it indispensable for companies in the food and beverage industry, which includes restaurants, raw food suppliers (e.g. farms), wholesale food distributors, groceries, and many more.
However, the food industry, like many others, is being swept up in a new wave of digital transformation. We’re now in the age of Big Data, where food companies are seeing the value of huge volumes of data in many areas of their business, from market research and customer insights, to sales and food production.
Food giants like PepsiCo, the conglomerate behind brands like Pepsi, Doritos, and Gatorade, are pumping money into tech startups to create a proprietary data analytics platform, called ADA (named after mathematician Ada Lovelace), to amass and leverage data for product ideas, packaging, and advertising messages.
For smaller food companies, the digitalisation of the food industry puts them in the awkward position of wanting to jump on the big data bandwagon but being stuck with outdated tools, like the spreadsheet, to visualize and share data.
Excel is a fantastic program, but it’s woefully inadequate for F&B businesses that want to scale and drive sales in today’s data-driven food industry.
reasons for f&b business to move on from excel
#1: Excel is time-consuming and prone to human error
Because entering and editing data in Excel is a highly manual process, spreadsheets are extremely time-consuming and prone to human error. All it takes is one wonky calculation in a single cell to mess up the rest of the data on the sheet. In fact, according to research highlighted by Oracle, as much as 90 per cent of all spreadsheets contain errors of some kind.
That same broken calculation can end up being an expensive mistake. Case in point, Canadian power company TransAlta had an Excel snafu caused by a simple cut-and-paste error, which cost them US$24 million.
Small clerical errors can be just as expensive and disastrous for F&B companies.
For example, a seemingly small error in an inventory sheet can lead to excess orders of perishable goods. You’re not only looking at unnecessary spending, but you could also be running the risk of serving your customers food products that are close to spoilage.
#2: excel scales poorly
Excel may be a godsend when you first start your food business, what with it being able to run your accounting, payroll, and inventory. But as the enterprise grows, a lot of things could change—prices increase, you expand your product line, you raise rounds of funding from new investors, and you hire more staff.
Before you know it, you have a bloated spreadsheet that can’t keep up.
Another drawback of Excel spreadsheets is how difficult they are to share. Even with cloud compatibility, you’re still passing a spreadsheet from person to person, usually through email on a weekly basis, which poses the problem of things getting lost in people’s inboxes. Not only that, each time the spreadsheet goes back and forth between team members introduces the risk of human error.
In the fast-moving F&B industry, you need tools agile enough to scale alongside your company and its needs as you grow.
#3: Excel is a jack of all trades but master of none
Perhaps the single best thing about Excel is its versatility—it’s a highly functional tool that takes care of a lot of grunt work in virtually any small business. However, this versatility is also one of Excel’s biggest weaknesses. Spreadsheets are highly functional, but they’re not designed to optimise your back office system for efficiency.
Of course, you could argue that with a bit of tweaking and a lot of care, you could ‘bend’ Excel to do just about anything you want. But if you’re operating a small F&B business, do you really have time for that?
Modern food companies deal with a myriad of challenges and—for some—razor-thin profit margins. It’s why data is so important in the first place.
With the proper information provided by a tool optimised for, say, customer relationship management, you can better understand in-store or online buying patterns and adapt your inventory, marketing messages, and store layouts accordingly.
Superior alternatives to excel
The good news is that there are better tools out there that do things more effectively and efficiently than Excel, while still being cost-efficient. Here are a few:
Foodservice companies are all too familiar with how complex, time-consuming, and accuracy-dependent accounting can be. Fortunately, accounting tools like Xero have features specifically designed for the needs of F&B and hospitality companies, such as:
- Automatic recurring online invoicing for regular suppliers
- Synchronisation with third-party apps for CRM, inventory, and point of sale
- Inventory management
- Simple payroll with automation
Say goodbye to using clunky spreadsheets for your point of sale management. Apps like Toast are built with restaurant POS systems in mind, providing a SaaS-based solution plus hardware to power your entire restaurant.
Other features to look for in POS management providers include apps for handheld POS systems, support for online ordering and delivery, and self-ordering solutions.
Apart from Xero, companies like Quickbooks also offer back office solutions like accounting and inventory management for food companies. Quickbooks’ inventory management solution lets you quickly see item quantities on hand in real-time, giving you the transparency you need to make quick decisions based on accurate data. Inventory values also adjust in your balance sheet as goods come and go, giving you a better view of your supply chain.
As data analytics becomes the new currency for strategic decision-making in the F&B industry, food companies need to be proactive not just about gathering data, but also interpreting it to make effective business decisions quickly and effortlessly.
For example, DataVLT’s easy-to-use data analytics platform allows you to capture granular customer data, allowing you to create a better dining experience or prioritise certain goods when the data predicts an upcoming spike in demand.
is it time for you to graduate from excel?
All of this isn’t to say that Excel is an obsolete program. As mentioned earlier, your average small business will probably do just fine using Excel for the years to come. But given the complex nature of the food and beverage industry, and how leveraging big data has become critical to customer satisfaction and operational efficiency, Excel simply isn’t the best tool for driving digital transformation in your organisation. For that, you’ll need alternative software that specialises in specific and advanced functions.
Need help leveraging the latest digital technologies? Get in touch with the experts at DataVLT to learn more.
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