Microsoft Excel – 40 years of #REF! #VALUE! #NAME? …

Malcolm Brock

Managing Director

Doesn’t time fly? It seems like yesterday when I got my first copy of Microsoft Excel and was amazed at the power to manage, calculate and analyse complex data in minutes, without resorting to a calculator and pencil. Mind you it did not take that long before I got my first #REF!

Last week, I read with interest, and knowing smiles, the Guardian article by Dan Milmo, Microsoft Excel’s bloopers reel: nearly 40 years of spreadsheet errors. I have made many errors in my time but fortunately nothing that has caused issues on the scale that Dan described in his article.

I would pose that this is because I have never made the mistake of treating Microsoft Excel as a software solution for a crucial Enterprise application. If you read the article, it will reveal stories of this exact mistake:

• Fannie Mae producing financial results using Excel resulting in $1b of errors
• Public Health England unreported 16,000 Covid cases in Excel
• After a $6bn trading loss at the US investment bank JP Morgan it was found flaws in how an important measure of financial risk at the institution was being calculated

I have a few of my own stories, discovered in the work done with clients over the years but I will, of course, not be revealing these here!

So why is the one of the wonders of modern software a double-edged sword? It comes down to what Microsoft Excel was originally created for – personal productivity. In the hands of an experienced single user it can, and does, save time and produce great results, especially for complex repetitive numerical tasks.

In my experience, it all goes wrong is when, often to save software costs, an organisation decides to use Excel for multi-user enterprise-wide processes like financial reporting or budgeting. Once an Excel spreadsheet is shared and used by a number of users the opportunity of user errors escalates. The more users the bigger the opportunity for:

• Misunderstanding of the structure and calculations in the spreadsheet
• Changes being made by others that compromise the integrity of the calculations
• Mistakes in the combination of multiple spreadsheets to calculate consolidated figures

With many great value software solutions, now available in the Cloud, organisations can avoid the mistake of using Excel and the potential risks this entails. Enterprise Performance Management (EPM) software provides excellent applications for budgeting, forecasting, financial consolidation, financial reporting, financial analysis and many more of the important processes organisations need. With lower costs and more flexibility these solutions are not just relevant to larger companies they are now within reach and practical for SMEs. Examples of the benefits that can be realised can be read in stories about some of our clients HERE.

The good news for those who love their spreadsheets is that market leading software provides access to these Cloud solutions via Microsoft Excel. It can be the interface used to both input, report and analyse but with security, workflow and data storage maintained with the enterprise solution. One might say you ‘can have you cake and eat it!’.

Before launching into an enterprise-wide Excel project I do suggest you have a look at the article I referenced earlier and take a look at just what is available on our website HERE. For all of the solutions we provide we offer fixed price implementations, especially for SMEs, that takes the risk out of your project overrunning and costs escalating.

Microsoft Excel is, without doubt, an amazing creation and is used by millions every day to save time in millions of different ways. I would just repeat that it is a personal productivity tool and not an enterprise-wide software solution.

I am always happy to discuss the subject of my articles, or anything related to Enterprise Performance Management. Please use the contact page on our website HERE or send me message via my LinkedIn account.

Until next time.

Malcolm