Article on ZDNet 3 June 2008 by Dennis Howlett.
Dennis discusses the errors that occur in spreadsheets and how it is very difficult to detect them. It is suggested that 95% of spreadsheets have errors. This is because the error per cell is a "few percent" and so for any large spreadsheet at least one error is inevitable.
He says examples of the consequences of spreadsheet errors range from "a mortgage provider that overpaid some $270 million for a debt book, through to energy futures overpaid by $9 billion down to the $2 million a month interest calculation error."
Dennis' view is that "the spreadsheet was never designed for the sophisticated uses to which companies continue to put it. At best it is a development envronment that is rarely documented because users are not trained as developers. The net result is that when things go wrong, errors are notoriously difficult to find. What’s more, there seems to be a fundamental lack of awareness around the extent of spreadsheet error."
He questions why companies continue to use spreadsheets given the risk, but then seems to answer this by saying "the spreadsheet is seen as convenient in a way that other applications are not and that the learning curve is sufficiently shallow for anyone to pick up the basics and do something useful. It’s also cheap, often pre-installed on user machines at low cost in bulk deals."
What I don't understand is what Dennis is proposing as an alternative.
Friday, June 06, 2008
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Alternatives? Specialist aplications. Most of the errors arise in financial oriented apps. There are alternatives out there, especially in the reporting, forecasting, budgeting markets eg BusinessObjects, Hyperion etc. There are solutions for SAS Institute. Those are the ones that come immediately to mind.
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