Power BI and Excel are both extremely powerful reporting and data analysis tools. As people look to improve and modernize their processes, the question of which one is better comes up very often.
Implementing a new business intelligence and reporting tool can be an intimidating task. We look at the differences between these two platforms to help you choose which one is right for your organization.
A Brief History of Microsoft Excel and Power BI
Excel was initially released by Microsoft in 1985 as a spreadsheet application for their new Windows operating system. Over the years it has evolved into one of the most used software applications in the world. It has hundreds of millions of users globally and is heavily relied upon by Fortune 500 companies and the smallest startups.
Power BI is a more recent addition to Microsoft’s portfolio Business Intelligence and Data Analysis software. It was first thought up in 2011 and became widely available in 2015. Microsoft recently announced that Power BI would join Microsoft Excel and be automatically installed as part of their Office software Suite.
Both platforms have constantly been improved and Microsoft regularly introduces new features on a monthly or quarterly basis.
How are Microsoft Excel and Power BI Similar?
There is a lot of overlap between the technologies used in both Excel and Power BI. This leads to confusion but also means that Power BI may be a natural progression for your organization.
Many Excel Power Users will be familiar with these features that Power BI is based one. They may even use them without knowing that it’s part of Power BI. These features are mostly available today under the Excel Get and Transform Data tab.
Power Query for Power BI and Microsoft Excel
Power Query is a data transformation tool that helps users extract transform and load data. This process is often referred to as ETL. In short, it is a method for data preparation and cleaning. It’s often the first step in preparing a report, dashboard, or Key Performance Indicator (KPI).
Another way to look at it is with comm data preparation use cases. Thinking about things like, filling in blank rows, removing headers, combining or concatenating columns, splitting one column into multiple columns, or filtering out values that you don’t want. This is the data preparation and cleaning step.
Power Pivot was a Precursor to Power BI
If you’re familiar with Excel Power Pivot, you will likely also be familiar with Power Query and understand the way that Power BI works. The steps used to access data and build data models for Power Pivot is very similar to Power BI.
Data Analysis Expressions (DAX) for Power BI and Microsoft Excel
DAX is a formula language that Microsoft created to enable people to do mathematical operations that work with larger datasets while still being familiar to Excel users. DAX formulas are used to create calculations that summarize data, create calculated columns, or enables users to perform complex calculations that would otherwise be impossible in Excel.
M Data Transformation Language for Power BI and Excel
As a compliment to Power Query, both solutions support the M data transformation language. M is used to create custom calculations, and extract data from datasets. It is often used prior to bringing data into Power Query.
Power Query, DAX and M are powerful data preparation methods that are available in both pieces of software. Learning these advanced Excel features will make it easier to transition to Power BI and add a lot of value for companies that want to publish reports in both systems.
How are Microsoft Excel and Power BI Different?
While there is a lot of overlap between the two solutions. There are specific use cases where you would use one over the other. These are some considerations you should keep in mind when choosing which system to use.
How Much Data are you Working With?
Excel is an amazing tool for quickly analyzing small to medium sized amounts of data. Newer versions of Excel support 1 million rows of data. It’s not often that you will run into this limit, but it does happen. Even prior to the row limit, Excel will slow down significantly in performance and may even crash.
Power BI was designed from the ground up for Analyzing Data and was designed with large data sets and sources in mind. It can easily work with data greater than a million rows. You can connect directly to data sources, such as Excel Spreadsheets, but you can also connect to SQL databases, data warehouses, and even work with big data solutions such as Azure Synapse. Regardless of how many data files, or the size the data files you are working with Power BI will have a way to bring it in and efficiently work with it.
Power BI’s inclusion of big data tools, data transformation capabilities and ability to use large datasets for data analytics are a big benefit to the platform over Excel.
Differences in Power BI vs Excel Data visualization
Excel provides simple visualization tools, such as charts and pivot tables. Power BI enables more advanced visualizations such as KPI Cards, AI Powered Narratives, Anomaly Detection, Q&A Features, and presents them in easy-to-use dashboards. The visuals in Power BI are modern and enable designers to create impressive looking interactive reports.
Power BI Enables Collaboration Across Teams
While Microsoft has invested a lot of time and money into making Excel Online a great tool, it is nowhere near as powerful as Excel for the Desktop. It also doesn’t come close to the capability that Power BI has to easily share reports.
A Power BI Report is hosted on the Power BI Service. It’s a server in the Microsoft Azure Cloud that allows users to quickly and easily share reports. Data security is backed by Microsoft’s technology meaning it’s one less thing for your company to worry about.
Power BI Reports can be setup with row level security at the data model level. Meaning that the publisher of the report can publish once and control the information that business users are able to access. This relieves you having to publish multiple reports, and you don’t have to worry about someone sharing a spreadsheet with someone they shouldn’t.
Power BI Enables Automatic Report Updating
It also enables companies to build live connections to data sources, so people do not have to be involved in updating data. The service will fetch data and update reports automatically, ensuring that business users are always seeing the latest information.
When Should you Use Power BI vs Microsoft Excel?
As a quick recap of the differences between these two great data analysis and reporting platforms, we want to highlight some of key differences between the use cases when you would use Power BI and when you would use Excel.
- When Should you Use Power BI over Excel?
- When dealing with large amounts of data. Data processing in Power BI is much faster.
- When reports always need to be up to date with fresh data
- When you want advanced features like AI insights for in depth driver analysis
- When your team wants interactive dashboards
- When trying to save time by automating reports
- When you have to perform calculations on large amounts of data for faster processing
- Reports will be consumed on mobile devices
When Should you Use Excel over Power BI?
- When presenting complex tabular reports, such as complex financial statements
- When performing quick Ad Hoc Analysis on smaller datasets
- When you need to share data with people outside your organization
- When tabular style reports are rolling up to a reporting deck such as Power Point
- When there is a single source of data and data modeling is not a consideration
How Does Power BI Work Compared to Excel?
Designing a dashboard or report can look very different in Power BI vs Microsoft Excel. Most people are familiar with the interface of spreadsheets, clicking on cells, adding formulas and seeing the calculations occur immediately.
Power BI works differently. Unlike Excel, data must be brought in from a data source, transformed to create a data model, and then any needed data manipulation steps are performed, then finally data is pushed out to Power BI Dashboards.
All of the steps mentioned above are performed on Power BI Desktop, a piece of software installed on your desktop or laptop computer. Power BI Desktop is a drag and drop data visualization tool, where a designer brings pre-made visuals to a canvas, lays them out as needed and tells each visual which piece of data to present. Then finalized reports are published to the Power BI Server where other users can view the reports and dashboards shared with them.
Should you Use Power BI over Microsoft Excel?
Even though Power BI has more advanced analytical capabilities, helps people automate data, and is a very robust business intelligence solution, we see it as a complimentary solution to Excel.
Microsoft Excel has been around for decades and can accomplish many business and analytical tasks that would take longer to setup in Power BI. While we love to automate every process possible, it’s important to respect the amount of time that many people within accounting, finance, and other departments have spent becoming Excel experts.
Even if there are fewer data analysis possibilities in Excel, we would never count it out. We believe companies should choose the right tool for the right task. If you’re able to bring on both solutions Power BI gives you many modern options beyond what’s available in Excel.
How Difficult is it to Learn Power BI?
Unless someone in your department has used the advanced features of Excel, we used to say that it could take a few months to get up to speed with Power BI and be really comfortable using it and efficiently publishing reports.
Chat GPT, the AI Chat Bot developed by OpenAI has changed things dramatically. The natural language processing bot can answer many questions about Power BI (and Excel) that new users would of had to spend a decent amount of time researching on their own. Now you can ask Chat GPT questions and receive useful answers. Chat GPT can even write a lot of the formulas for you, if you don’t know where to start greatly making the tool even more approachable than it was before.
Where can you Learn More about Power BI?
If you’re interested in learning even more about Power BI, check out our comprehensive review of Power BI for Finance and Accounting Professionals.