Power BI vs Excel: Selecting the Right Tool for the Job

For nearly 40 years, Microsoft Excel has been a staple in businesses and other organizations. The spreadsheet program made it possible to crunch numbers, create forecasts, and visualize data in ways that previously had to be done by hand.

Today, new tools like Microsoft Power BI offer additional features and flexibility that make them better options for some businesses. Before ditching the tried-and-true Excel for Power BI, find out how these programs compare.

Power BI vs. Excel: Overview

Let's start with what these programs have in common. Both Power BI and Excel are Microsoft-created tools used to analyze data. Businesses rely on data analysis and actionable insights to make decisions for the company. Each program lets you visualize raw data through interactive reports and dashboards to share with other users and stakeholders.

Since they're Microsoft products, Power BI and Excel integrate with other Office apps, and both employ Power Query and Power Pivot. If you learned how to use those tools with Excel, you'll be able to apply that knowledge to Power BI. They also work well together. For example, you can use Excel to create a data model and use Power BI to publish it.

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Power BI vs. Excel: Key Differences

The BI in Power BI stands for business intelligence, and this term sums up the key difference between these two programs. Power BI is a scalable platform with desktop and online apps that work together seamlessly.

In the desktop app, you can retrieve data from multiple sources. You can then write Data Analysis Expressions (DAX) measures and formulas to sort and analyze the data and display it through reports and dashboards. In addition to the desktop app, Power BI features a cloud-based service that lets you share reports and dashboards with team members and stakeholders. This eliminates the need to send updated reports through email, as users can view and filter what they need online.

Microsoft Excel, on the other hand, is primarily a desktop program, though an online version is also available. This all-purpose spreadsheet tool makes it easy to organize and analyze data. Like with Power BI, you can create reports and dashboards to visualize data and share the insights with others. Where Excel stands out is its simplicity. You can quickly compute data sets and create reports in a few simple steps.

Power BI: Pros and Cons

Power BI is a solid choice for processing large amounts of data. Excel cannot compete in terms of data capacity. Here is a sample of what you can do on the platform.

• Direct Query allows for "near real-time" data in Power BI.
• Power BI enables you to import custom visualizations and create interactive dashboards from multiple reports.
• No need to send multiple emails to share information.
• You can set rules to restrict viewing privileges.
• Power BI is compatible with AI and machine learning.

Power BI is not a perfect solution. Here are some of the drawbacks:

• Power BI is ill-equipped to do many transformations or quick insights.
• You must pay for the Power BI service to share reports with other users.
• Learning to use Power BI may take longer, as you have to learn the DAX language.

Excel: Pros and Cons

Power BI has not eliminated the need for Microsoft Excel. It remains a valuable tool that is still widely used in a variety of organizations for the following reasons:

• Excel is a commonly-used program that most people know how to use.
• Excel costs less than Power BI.
• You can create additional sets of charts using built-in charts.
• Excel calculates numbers at a faster speed.

Although Excel is popular, it struggles to handle some tasks. You may notice the following:

• Data in shared dashboards may not remain secure.
• Visuals in Excel are limited compared to what's available in Power BI.
• Excel does not handle large amounts of data as well as Power BI.

Excel vs. Power BI: Which Is Right For Your Organization?

As you decide which program is right for your organization, consider how you plan to use the program and who will be working with it. Microsoft Excel is the more common program, and the learning curve is not as steep since most of your employees likely have a basic knowledge of how it works. It's still an excellent tool for doing complex calculations and financial forecasting, as well as tracking metrics.

Power BI may appeal more to data and business analysts who will use its robust visualization features to make decisions. It's also commonly implemented in Agile Project Management. Learning how to use Power BI may take some people more time since they need to learn how to create DAX measures and how to use all of the special features available in the program.

In the end, you may not need to choose between the two. Some companies rely on Excel for financial modeling and reporting yet also take advantage of Power BI's reporting and dashboard features. However, if you already know you want to begin working with a business intelligence tool, keep in mind that Power BI's easy integration with other Microsoft products makes it a clear winner. This is especially true when compared with similar products like Tableau.