You know that the spreadsheet habit poses problems for the business, but your boss says Microsoft Excel is already paid for and good enough for anything you need.
Here are 3 issues you ought to discuss with that boss.
1) Hands-on involvement sucks up expensive labor
One thing many people like about Microsoft Excel is that it’s already paid for. Who wants to spend money, deal with IT and the purchasing department, when they can use what’s already on hand and familiar?
But spreadsheets don’t just magically do whatever you need.
You have to build them, creating formulas and references, formatting output and more. Building spreadsheets takes time, and that costs money. Do this all over a business, on a daily basis, and the costs of using spreadsheets adds up. Still, many people aren’t easily convinced that it can be cheaper to buy purpose-built products than to create your own spreadsheets to do similar things.
One trouble with spreadsheets is that, even after initial setup, it can take a significant amount of time to use and maintain them. Just adding in new data can introduce error into a computation, for example, so you need to check cell references each time you make even the simplest use of a spreadsheet.
And the bigger the spreadsheet, more hands-on time you need to update, run and maintain it.
One consulting firm that I encountered provided standardized reports to its clients. The entire consulting staff devoted full time to making these reports, each consultant running spreadsheets on two computers full time to complete the calculations.
The same work could easily have been fully automated using a more appropriate tool, freeing the consulting staff to develop and offer additional services to clients and increase the firm’s revenue.
When you see someone hunched over spreadsheets all day, you’re really seeing potential to automate some operations and devote that person to more profitable (and satisfying) work.
2) Spreadsheet error leaves business open to risk and liability
Even the most conservative research-based estimate indicates that at least 1 in every 100 spreadsheet cellscontains an error.
Most of these errors are small and won’t have significant business consequences. The trouble is that the hundreds, even thousands, of spreadsheets used in any given business, each one with hundreds or thousands of individual cells, add up to a lot of errors.
Sometimes, those errors are not so minor.
If the $6 billion dollar loss attributed to the London Whalewas partly due to a spreadsheet error that caused underestimation of trading risk – not a fluke or an out-of-control individual, but a systemic business process failure.
That error was rare only in the sense that it was big and known to the public. Smaller, yet significant, flubs happen every day, with the ugly stories kept quiet within the businesses where they happen.
But keeping the story out of the papers doesn’t mean there are no consequences. Your customers, management and regulators may be affected by any error, and there may be costs to you in lost revenue, damaged reputation, fines or litigation expenses. Isn’t is worth some money and effort to avoid those risks and expenses?
3) When spreadsheet creators leave, knowledge leaves with them
A spreadsheet is a computer program.
In most cases, spreadsheets are created informally, and they lack elements that make professionally-developed software desirable, such as:
- Designers with a solid understanding of user needs
- Design review, to prevent problems before the software is built
- Programmers who are well-trained and use appropriate processes to work efficiently and minimize flaws in the end product
- Quality assurance, to ensure the program does what it’s supposed to do
- User testing to detect and correct problems in the product before it gets into general circulation
- Documentation, both internal documents used by developers and documents such as manuals and training guides for end users.
- Product roadmaps, plans for that account for future development needs
Many business people are quick to say they don’t need all that, especially when facing a deadline. Microsoft Excel is already available to them, and they can put together a spreadsheet quickly, or get their go-to “Microsoft Excel guy” to do it.
But those quickly assembled spreadsheets make their way into ongoing business use.
Over time, the people who made the spreadsheets make changes, and then they change the changes. They have no records of what they’ve done, and nobody has seriously checked the work.
Finally, the person who created the spreadsheet moves on to another job, and nobody who’s left behind knows what that spreadsheet really does.
I once got into a shouting match with a boss over one of those. Maybe that was bad form, but the problem seemed obvious to me, and I wasn’t going to be easily dismissed.
In the end, my boss had to admit the problem and correct it. Oh – it wasn’t because he respected my point of view. No, it was because an auditor came in, found the problem and reported it to higher ups.
Oops! The boss suffered the consequences. Your boss can avoid that, by replacing Microsoft Excel addiction with more appropriate analytics tools and processes.
Meta S. Brown is author of Data Mining for Dummies and creator of the Storytelling for Data Analysts and Storytelling for Tech workshops. http://www.metabrown.com.