In the absence of spreadsheet management, horror lurks
Is the spreadsheet dead? Has the cockroach been eradicated? A half-billion people use Excel.
For a story this week on spreadsheet management, I not only learned that the spreadsheet is alive and thriving in the enterprise, but also heard an interesting argument why this pesky application may deserve to survive in the face of enterprise BI, ERP and CRM solutions: To wit, as businesses adapt to ever-changing conditions, it takes time for their vendor-built solutions to catch up to the current reality. Meantime, the not-so-lowly spreadsheet fills the gap, helping business people analyze the viability of new products, for example, or helping federal government, for that matter, keep track of Troubled Asset Relief Program spending. As long as the world keeps changing, I was told, the spreadsheet will survive. (The longstanding joke in this field is a variation on the Nuclear Cher meme: Come the end of the world, only cockroaches and spreadsheets will survive. They deserve each other.)
More surprising to me than the evolutionary adaptability of the spreadsheet was the discovery that many companies are courting daily risk by not having a spreadsheet governance program in place. This is despite well-documented multimillion dollar losses, like the one suffered by C&C Group PLC, the Dublin-based maker of cider. The drinks giant saw shares plummet 15% in 2009 after admitting that, due to a spreadsheet error, it had misstated quarterly revenue and claimed a 3% rise in revenue when in fact, revenue had dropped 8%. Or the $1.2 billion Fannie Mae error caused by a spreadsheet error. Or the spreadsheet typo that caused Fidelity’s Magellan Fund to overstate a share distribution amount by $1.3 billion. Or statistics apparently showing that some 94% of spreadsheets will contain errors. (For a well-curated compilation of the best spreadsheet horror stories, check out the website of the European Spreadsheet Risks Interest Group, or EuSpRiG.)
The question: Does your company have a spreadsheet management or governance program in place? Oh, and who’s in charge of it? (Another stumbling block, it seems.) And by the way, is there an evolutionary computing surprise out there that will put the spreadsheet to rest?
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