How to keep dirt away from wood on shed?
You want to fix this, it will only get worse. You only have to replace the wood that's rotten but make sure you get it all. Cut out the rotten wood and square off the remaining strips. Frame some concrete backer board, wonder board, where the rotten wood was. Finish off the job with some stucco over the backer board and texture it similar to the wood grain. Paint it and you're good to go. That's one repair you won't have to do again. Good luck.