There’s been an interesting discussion in one of my LinkedIn groups about this article in the Financial Times on errors in spreadsheets. Although some years old the article talks about research from the University of Hawaii showing that

“between 78 and 97 per cent of spreadsheets contain “serious material errors” with a potential to devastate the bottom line.”

I wonder, did they use a spread sheet to collate that figure?

In my view it’s the very aspects of Excel that make it so widely used that can lead to problems. It’s the flexibility, the speed in which fairly complex calculations can be done, its accessibility and widespread use. At its best it’s an incredibly powerful tool which shouldn’t be underestimated. I’d say that careless use of business critical spreadsheets is analogous to putting a young inexperienced driver in control of a new, more powerful car and telling them to rely on that car to get around.  Whilst they may not have a terrible crash, a minor bump or scratch somewhere along the line is likely unless that driver is given the time and support to get to know and understand the vehicle, along with a good set of documentation for backup.

But don’t panic, of course you shouldn’t abandon Excel entirely! Yes many organisations rely on complex and unstable spreadsheets when there are more appropriate Business Intelligence solutions however Excel can also enhance your business giving you the management information you need in a format and style that suits you.  It’s particularly suitable for SMEs, freelancers and micro businesses, helping them working more efficiently and effectively understanding their business.  Management Information, KPI reporting, Business Intelligence and Data Analysis may seem complex terms but shouldn’t be reserved for large corporate customers, every business needs to be able to lay their hands on their key data and Excel can help you do that. A properly constructed spreadsheet should be an asset to your business and Excel should never be a burden to be endured!

In coming blog posts I’ll cover various spreadsheet tools and some suggestions of best practice when designing a new workbook which can be used to help you avoid problems, but in the meantime what’s the biggest problem a spreadsheet has ever caused you?