“We have outgrown the lighter tools” is usually said with some embarrassment, as though the spreadsheet should have lasted longer. It should not have. Here is the difference, using data you can poke at.
Try the rename in both views
This is the whole argument, and it is worth doing rather than reading. Ballymore Joinery changes its trading name, which happens constantly and is nobody’s fault.
In the linked view it is one edit against one record. Every project, invoice and ticket already points at that record, so they are all correct the moment you save, and nothing else was touched.
In the flat view the same change has to reach ten cells across five rows. Switch to the spreadsheet, press “Show me the cells”, and they are highlighted. Miss one and you now have two clients who are the same client, which is the kind of error that surfaces at year end.
Why the flat version exists at all
Because it works, for a while, and it costs nothing to start. Nobody chooses a spreadsheet over a structured system; they choose it over nothing, on a Tuesday, and it does the job for two years.
The point at which it stops working is not when it gets big. It is when the same fact starts living in more than one place, because from then on every change is a chance to be wrong.
What this actually costs
Less than people expect, and often nothing. Related lists like these run on a Microsoft 365 licence you already hold, which is covered in SharePoint lists as a database. Where it starts costing is when the relationships get genuinely complex, and that is a licensing decision made early by someone who may not realise they are pricing it.
All the data here is invented. If you have something in this shape and are not sure whether it has crossed the line, describe what it tracks and where the same fact appears twice. That second part usually answers it.