Let's Talk Excel

The Perennial Office Romance… 3 Reasons To Continue Loving Your Spreadsheets

This is a guest post by Craig Hattabaugh, CIMCON Software CEO and is meant to accompany  the video clip – http://blog.cimcon.com/blog/excel-office-romance also on YouTube https://youtu.be/9z7RI1U141w

Two recent articles in the Wall Street Journal (Stop Using Excel, Finance Chiefs Tell Staffs , Finance Pros Say You’ll Have to Pry Excel Out of Their Cold, Dead Hands) that have reignited the debate between spreadsheet defenders and foes as evidenced by hundreds of posts in various social media channels. Excel is perennially derided by software marketers who sell replacement solutions (e.g., “Spreadmarts are bad!”), yet its usage continues to proliferate. If it’s so risky, so error-ridden and/or inefficient, why is it used so often within critical business processes where the stakes are high? There is no single, one size fits all answer. But more often than not, the smart business decision is probably to keep those spreadsheets and/or spreadsheet-based models in place. Here’s why:

  1. One could argue that spreadsheet usage is one of the purest manifestations of capitalism and the principles of efficient markets. If a spreadsheet adds value, it is used. If not, it’s quickly discarded. People only build what they need and they make sure it works and continuously adds value. This is what end-user controlled computing (EUC) is all about, enabling agility and innovation to create significant competitive advantage. Our love of  spreadsheets is not purely emotional. It’s flexibility is unmatched by any IT managed application. For example, industry statistics estimate that 60% to 80% of the I.T. administered business intelligence platforms are not used. Even if those estimates are off by half, how can that dismal adoption rate be rationally used to justify replacing Excel? Given its low cost and universal accessibility, the ROI on Excel repeatedly delivers the maximum bang for your buck.
  2. It is impossible; repeat, impossible, for centrally-administered IT applications to keep pace with the data demands of an agile, modern business. That is not offered as a cheap shot at IT, it is simply reality. With each passing day, new data sources become available and older sources lose their relevance. Indeed, certain transactional processes and other reporting are more efficiently done by IT-managed applications. But typically, that’s not where transformational business value is derived. Using the latest data, analysing that data within the context of new sources or the latest proprietary model, is where the valuable insights come from.

The best information comes at the intersection of various data domains and it happens in real time. Data warehousing projects that last months (if not years) don’t come even remotely close to the speed required. To have the agility and flexibility to analyse data at the intersection of disparate data domains, or to rapidly apply innovative mathematical methods, you need to stick with Excel.

  1. Regardless of technology, in the end, human error reigns. And it’s fair to say that end-user controlled applications (spreadsheets being the #1 file type) are more prone to error. In addition, spreadsheet-based applications that are used in critical business processes typically have few (if any) controls and this translates into higher information risk (higher than an IT-managed application). But the solution is not to throw away the spreadsheet (or other EUC). Why incur the expense of new application development and testing to replace something that is proven to reliably work? Where is the ROI in that?

It makes no business sense to impede creativity or take away the computing flexibility that is vital to high performance. Fortunately, there is a middle ground which is more effective controls on your EUCs. Bring them to an acceptable level of risk consistent with, or at least closer to the inherent risks of IT managed applications. Technology can play a great supporting role in pursuit of that objective.

So in closing, this is one office romance that you don’t have to discourage. There is no need to choose sides and digress into the stereotypical “good vs. evil” emotional battles. The business need and opportunities persists… so what is the most effective way to address them while incurring acceptable risk? EUCs that underpin a critical business process yet don’t have effective controls represent an unnecessary, and hence unacceptable risk. But stay focused, don’t succumb to an emotional impulse to end the love affair with spreadsheets. Address the core issue – the lack of effective tools to check spreadsheet accuracy and to manage the risk of end-user controlled computing files.

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