How are spreadsheets like cockroaches?

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[caption id="" align="alignright" width="180" caption="Image via Wikipedia"]Cockroach closeup[/caption]
“...They’ve been in existence for decades, they can spread like wildfire, and no one has quite figured out how to stop their proliferation – even if they really, really want to.”

I came across this entertaining rant in the Sourcing innovation blog.  The idea is that despite many attempts on behalf of IT to get key corporate data out of spreadsheets and into dedicated systems, spreadsheets keep coming back.  The doctor’s post was prompted by an article in that indicates that BI vendors have resigned themselves to the fact that spreadsheets are here to stay and have devised means to incorporate spreadsheet data into their systems despite the fact that studies have shown that 80-90% of spreadsheets contain serious errors. You know it’s true...How many times haven’t we been in the situation where user A’s spreadsheet showed different results than user B’s spreadsheet for the same thing?   OK, so there are a few errors...not a big deal, right?  Wrong!  To see the impact spreadsheet errors can have, check out this article from a few years ago that outline 8 of the worst spreadsheet blunders to date. Yikes! So why do people rely so much on spreadsheets?  There are many reasons I’m sure, but the top culprits are as follows;

  • The business system (BI, CRM, ERP, etc) can’t present the information the way they need to see it
  • The business system doesn’t support what-if modelling
  • The business system is too darn hard to use
  • The business system logic is fixed and can’t be changed (within a human lifetime)

Until we get enterprise tools that can change these factors, spreadsheets will continue to proliferate regardless of how much bug spray we throw around. Why do you continue to use spreadsheets?  Do you have any great spreadsheet blunders to share?  (We won’t tell... honest!)

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Carol McIntosh
- August 12, 2010 at 3:16pm
Cockroaches...what a great analogy John! It brings back nasty memories of university life!

Sometimes I dont think we give enough credit to people...I mean the 'worker bees' in an organization. They want to get the job done and if they arent given the appropriate toolset they will do anything they have to accomplish their job. It almost becomes a matter of survival and spreadsheets are usually the best answer.

They know that there are flaws but excel is far more flexible than their business system and excel is so easy to learn. The great thing about excel is that you can be an average user or a power user. It satisfies both. These are some of the requirements that business systems need to address.

I have heard organizational leaders fault their employees for using Excel instead of their business systems. It isnt really their choice. People have a job to do and without more flexible and efficient business systems Excel is their only option.

I agree with you that relying on Excel to manage mission critical application is pretty scary stuff. I am looking forward to reading responses as to Why Excel?
Ron Freiberg
- August 16, 2010 at 11:13am
I would have to agree with Carol as far as ease if use and flexibility goes but I also think the spreadsheet issue goes even deeper business use. Pre computer, back in the 60's and early 70's we were all using manually developed spreadsheets and had been for decades prior; It's as if the spreadsheet format is hard wired into our brains from pre historic times much like the need to eat, sleep, compete and yes organize data. The spreadsheet format is without a doubt the mainstay of accounting and financial reporting processes and since accounting in a company, from the data standpoint, is the basis for everything else we do i.e. inventory accounting, sales data accounting, manufacturing data accounting etc. it will not go away very soon. The format is comfortable, it's taught in business and engineering schools as the basis for data management and by the way, ingenious IT sorts have done a very good job of down loading ERP system data into the spreadsheet format and vice versa to eliminate the error effects of entering data manually.

And then you have a bunch of consultants and systems sales people come along pushing a whole new system that supposedly does away with hard wired spreadsheets and oh yes it's going to cost a couple of hundred K+++ to get the software into play; then buy the way we all have to change the way we do business to make it work. We've all heard that one before, change the way you do business to make this new high cost system work since you have already invested in it. That scenario sets up the next issue, system users no longer trust consultants and systems sales people; too many companies have been driven to ground trying to change to meet the needs of the "new system".
John Westerveld
- August 18, 2010 at 9:21am
Thanks for the comment Ron and Carol.

Ron, your last comment, about needing to adapt to the needs of the software, got me thinking about how new software can impact old processes. To me the idea of re-engineering a process to suit the software that you've purchased is an interesting one. The software we sell is designed to be adapted to meet the needs of your processes. That is, the software can be configured to enhance almost any existing supply chain process you have from S&OP planning to supplier collaboration. We market this as one of our strengths and a differentiator to our competitors; we allow you to improve your processes significantly without requiring that you spend millions of dollars redesigning every process. (are you listening SAP and Oracle???)

That being said, I've seen plenty of instances where existing customer processes could be dramatically improved by re-engineering the existing process. Let's think about how typical processes come into being:
• Someone is performing some manual process and decides that they could do it better using a spreadsheet.
• They design a spreadsheet (likely not knowing much about Excel) and use it.
• Someone else stumbles on the spreadsheet and decides that they could use it too. The spreadsheet is modified and put on a network server.
• The spreadsheet grows in use and in scope. If we are lucky, there are some hastily written notes or instructions written somewhere.
• The original designer of the spreadsheet moves on and someone else takes over, who, likely has no more knowledge of spreadsheets and who doesn't likely know the original intent or design.

Processes like the above which have developed organically and without much thought to the bigger overall system design, often result in slow response times and lack of visibility. From my time in IT, I've learned that if you take a bad process and automate it, you get a fast bad process...not very useful.

I think the ideal lies somewhere in the middle. ompanies shouldn't be forced to redesign their entire business just because they bought some software. However, the implementation of new software provides the perfect opportunity to look at existing processes. Of those that aren't performing, decide which of these processes could be improved through a redesign leveraging the new software. I believe that this moderate approach will provide the biggest improvement with the lowest impact.
Carol McIntosh
- August 18, 2010 at 12:55pm
Ron, thanks for your comment. I agree that spreadsheets have certainly become a significant part of our business culture, and have served a critical purpose over the years. And, as you say, they will not go away soon.

However, business evolution--and success--are not built upon doing things the same way they've always been done. Those businesses who strive for greater efficiencies through innovation are inevitably those who lead the pack. I was a supply chain practitioner myself for nearly 20 years, and saw firsthand that while spreadsheets have their place, we should never become complacent and think that there isn't a better way to work--that's why I'm now on the solutions side of the equation.

Regarding your comment about consultants and sales people, certainly there are those out there that will make you feel like you're being sold snake oil. But when that happens, it's not a sign that change is bad--it's a sign that you need to find a better solutions provider. The good, trustworthy ones are out there. Speaking to customer references and analysts is one great way to find them.
Colin Finn
- August 23, 2010 at 12:48pm
An ostrich like “head in the sand” approach won’t make a colony of cockroaches disappear. With 150 Million licensed users (and probably as many unlicensed users) Excel isn’t going away anytime soon.

The problems mentioned earlier with Excel are very real and fundamentally relate to the fact that Excel is a single user, desktop productivity tool. There is no security, no audit capability, no process consistency, and no capability to collaboration with a spreadsheet.

The challenge is how to better harness Excel within the organization at the individual, department and enterprise levels? And move towards better compliance with IT guidelines. What appears to be needed is a more inclusive approach that embraces Excel and its users and transforms their day to day use of Excel into an enterprise solution that interacts more effectively with systems of record. Effectively what is needed is a smarter spreadsheet.

Our company provides a tool that eliminates the financial, operational and regulatory risk of having enterprise data stored inside, and key business processes depend upon, unmanaged Excel spreadsheets... what we call “mission-critical” spreadsheets. This methodology helps companies transform unmanaged "mission-critical" spreadsheets, and data, into secure enterprise applications.

This approach works well for a variety of clients. We have helped clients as small as $50 Million in revenue and scaled the solution up to a company with $90 Billion in revenue. Don’t get us wrong, we’re not saying that a company should throw away their core systems and try to run their business on a spreadsheet. However, since many Excel based business processes already exist in most companies they create unacceptable risk for the organization. It is critical that IT and management communities find a way to eliminate this financial, operational and regulatory risk.

Trying to squash individual cockroaches is akin to the perpetual “Excel Hell” of most companies. Recent technology advances of dealing with roaches have focused on breaking their reproductive cycle. Likewise it’s time to transform Excel into something better and smarter using commercially available technologies.
Sclable – Warum ist Excel böse?
- March 26, 2013 at 5:57am
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