Businesses reliant on Excel are vulnerable to time- and money-consuming errors that restrict growth and put their business at risk. We’ve worked with many businesses who are stuck with broken business processes because they run their main business system from spreadsheets. These businesses are unable to grow because they have reached their limit for process improvement. We call this… Excel Hell. It is understandable why businesses get stuck; Excel is easy to use, learn, and adapt to a business process. When your processes are simple Excel can quickly be customized. But, as your processes become more complex, growing pains appear. The issues experienced by businesses that rely on Excel are a symptom of a much larger problem: these old practices limit growth and are costly.
88% of All Spreadsheets Contain At Least One Error
The majority of spreadsheets contain at least one error according to two separate studies. One study revealed 88%1 and another 94%2 error rate. Even if you check your spreadsheets, you may assume that you find your errors, but the studies disagree: The average person finds only around 50%3 of all errors in any given spreadsheet, so even when you check carefully, you’re still missing errors.
How many errors did you find last time you edited a spreadsheet? What if for every error you found, another one was still there, uncorrected?
The Four Signs You’re Stuck in Excel Hell
We’ve found that most businesses stuck in Excel Hell can relate to one or more of these key problems:
1. If All You Have is a Hammer and Everything Looks Like a Nail
If you only have one tool in your toolbox, you may not know that other options are available and this limits your business’s ability to grow because other tools can get the job done better.
2. A Lack of Data Integrity Produces Errors
Excel can’t enforce data integrity and is why so many errors occur. These errors often have a very real cost. In one example, a single keystroke error overbooked the London 2012 Olympic Synchronized Swimming event by 10,000 seats. The organizer had to find alternative events for those people, with some receiving more expensive tickets to compensate4. In another example, JP Morgan discovered a $6 billion error when a series of trades based on a risk model operated through manual copying and pasting were wrong. JP Morgan later revealed that problems with the model were likely partially due to the unsuitability of Excel for complex modeling5.
3. Poor Data Integrity Harms Your Decision Making
Analyzing related information is unreliable, because there is no way to maintain key data in Excel, which makes keeping information up-to-date and advanced reporting impossible.
4: With No Security, You Have No Control Over Your Data
11% of employees have accessed business information for personal profit, or know someone who has6, and the average organization experiences 3.8 incidents of insider attack every year7. Excel’s security features are non-existent, allowing malicious insiders to access and share your data whenever they want. And with no audit controls, there is a big opportunity for dishonest employees to steal.
1. Panko, Raymond, University of Hawai’i – What We Know About Spreadsheet Errors – published in the Journal of End User Computing’s Special issue on Scaling Up End User Development, Volume 10, No 2. Spring 1998, pp. 15-21. Revised May 2008.
2. Powell, Baker, and Lawson, Tuck Business School – A Critical Review of the Literature on Spreadsheet Errors – http://faculty.tuck.dartmouth.edu/serp/
3. Panko, Raymond, University of Hawai’i – What We Know About Spreadsheet Errors – published in the Journal of End User Computing’s Special issue on Scaling Up End User Development, Volume 10, No 2. Spring 1998, pp. 15-21. Revised May 2008.
4. Telegraph – London 2012 Olympics: lucky few to get 100m final tickets after synchronised swimming overbooked by 10,000 – http://www.telegraph.co.uk/sport/olympics/8992490/London-2012-Olympics-lucky-few-to-get-100m-final-tickets-after-synchronised-swimming-wasoverbooked-by-10000.html
5. Business Insider – How the London Whale debacle is partly result of an error using Excel – http://www.businessinsider.com/excel-partly-to-blame-for-trading-loss-2013-2?IR=T
6. Cisco – Data leakage worldwide white paper: The high cost of insider threats – http://www.cisco.com/c/en/us/solutions/collateral/enterprise-networks/data-loss-prevention/white_paper_c11-506224.html
7. SpectorSoft – Insider Threat Spotlight Report – http://www.spectorsoft.com/resources/infographics/insider-threat-spotlight-report/index.html?UK=true&