Daily Archives: May 27, 2015

Technological Damnation 83: Spreadsheets

Spreadsheets. You can’t run your business off of them. But you still can’t run your business without them. Despite the fact that it’s 2015, and that better, customized, back-office systems exist for every facet of your business, most business still run at least one key aspect of their business on spreadsheets.

This is, literally, the only technology worse to run your business, and supply chain, on than the ERP (which, as we pointed out in a recent post, is a supply chain disaster waiting to happen. Do you have to remind you again that Spreadsheets Will Cost You Billions? That Fidelity lost 2.6 Billion due to a simple spreadsheet error? That 1.13 Billion in Fannie Mae Shareholder Equity went out the window due to an honest spreadsheet mistake?

And do we need to remind you that trying to run a business off of spreadsheets is fraught with peril and could result in your organization tossing 20 Million into the trash on an annual basis? That your new support centre could be woefully understaffed upon switchover? That unavoidable delays will result in your projects as a result of spreadsheet gaps?

You know spreadsheets are a damnation because they still exist, five years after the Harvard Business Review told us why good spreadsheets make bad strategies. There’s just no such thing as good spreedsheets. All spreadsheets of any level of complexity contain errors. The most recent statistic, as reported in Forbes last year in Sorry, Your Spreadsheet Has Errors, 88% contain errors (and the vast majority are human. But what can one expect when one in one hundred keystrokes is erroneous?) And so will 88%+ of spreadsheets going forward as forecasts, models, and financial statements just keep getting more complex.

As long as they exist, spreadsheets will be an eternal damnation that might just burn your business to the ground if the sea of red isn’t detected, due to a human error, until it is too late. If it’s the last thing you do, get rid of them.