Is AI going to replace Excel?
This is the question I get in all my courses and keynotes about AI for Finance.
Today, I am going to explain to you the differences between them and which cases you should combine them for the best results.
Table of Contents
Differences of AI vs Excel
First, AI and Excel are two different types of technologies.
AI is really good at processing large data and simulates human intelligence
While Excel is excellent (pun intended) at doing spreadsheet activities
In our world, we don’t need a mega brain for all activities. To do 2+2=4, you don’t need a calculator; you use your brain or your fingers.
This is the same for AI and Excel. For many activities, Excel is better, more reliable, easier to audit, faster, and more energy efficient.
But the best is when you combine both!
Here is when to use AI, when to use Excel, and when to combine both!
When to Use AI
• Natural Language Processing
NLP can automatically extract relevant information from large volumes of text
• Big Data Processing
Handling and analyzing large datasets beyond Excel’s capacity
• Complex Decision Making
AI can process vast amounts of data to support complex decisions
• Pattern Recognition
Identifying trends and anomalies in data more efficiently
• Predictive Analytics
Use machine learning models to predict outcomes
• Optical Character Recognition
OCR automates invoices & documents processing
When to Use Excel
• Data Manipulation
Ideal for data entry, sorting, and simple calculations
• Reporting
Creating straightforward reports and charts
• Formulas and Functions
Extensive library of native formulas for data analysis
• Macro and VBA
Automation within the scope of spreadsheets
• Budgeting and Forecasting
Setting up and adjusting budgets with direct input for SMEs
• User Control
Direct manipulation and immediate error correction.
When You Should Combine Both
• Automation
Get AI to code automation via VBA or Python and use Excel either as data input or data output
• Scenario Analysis
Create reports in Excel using insights generated from AI analysis
• Enhanced Reporting
Create reports in Excel using insights generated from AI analysis thanks to
• Budgeting with Predictive Insights
Use AI to predict future trends and Excel to manage and adjust budget allocations accordingly
Bonus
Get my top 100 AI Finance tools list here.
Final Words
In conclusion, while AI and Excel are powerful tools in their own right, they are not mutually exclusive. Each has its strengths and is best suited for specific tasks. Excel shines in straightforward data manipulation, reporting, and user control, while AI excels in processing large datasets, complex decision-making, and predictive analytics. Combining AI and Excel can automate processes, enhance reporting, and provide predictive insights, ultimately leading to more efficient and accurate financial management.
FAQ
Q: Is AI going to replace Excel?
A: No, AI is not going to replace Excel. AI and Excel serve different purposes and excel (pun intended) in different areas. AI is designed for processing large datasets, making complex decisions, and recognizing patterns, while Excel is perfect for data manipulation, reporting, and using formulas and functions.
Q: When should I use AI instead of Excel?
A: AI is ideal for tasks such as Natural Language Processing (NLP), handling big data, making complex decisions, recognizing patterns, predictive analytics, and Optical Character Recognition (OCR).
Q: When should I use Excel instead of AI?
A: Excel is best for data manipulation, creating straightforward reports and charts, utilizing formulas and functions, automating tasks with Macro and VBA, budgeting and forecasting for SMEs, and for user control with direct manipulation and immediate error correction.
Q: Can AI and Excel be used together?
A: Yes, combining AI and Excel can yield the best results. You can use AI for coding automation via VBA or Python and use Excel for data input or output. AI can also enhance reporting and scenario analysis in Excel by providing insights from AI analysis. Additionally, AI can predict future trends, while Excel can manage and adjust budget allocations accordingly.
Q: How do I integrate AI with Excel into my financial tasks?
A: To start integrating AI with Excel, identify repetitive tasks that could benefit from automation. Use AI tools to create automation scripts via VBA or Python. Explore AI solutions for predictive analytics and pattern recognition to enhance your reporting and decision-making in Excel. Start small and gradually expand the use of AI as you become more comfortable with the integration process.
