“Preventing Evil.” “Exorcising Evil.” “Towards Heaven.” The session titles at the annual meeting of the European Spreadsheet Risks Interest Group (Eusprig) in July seemed to promise sermons of fire and brimstone. They may not have delivered as much, but they featured plenty of cautionary tales to send shivers down a CFO’s spine.
By spicing up its subject material, Eusprig hopes to draw more attention to lax oversight of company spreadsheets — the “Preventing evil” session dealt with training; “Exorcising evil” was about debugging; and “Towards heaven” discussed control methodologies.
To demonstrate the gravity of the situation, the conference began with a “bug hunt,” challenging attendees to identify mistakes in spreadsheets seeded with deliberate errors. Worryingly, Europe’s foremost spreadsheet experts found only half of the errors in the allotted time.
Of most relevance to corporate spreadsheet users was the presentation by Stephen Powell of the Tuck School of Business, at Dartmouth College in New Hampshire. The latest paper, produced as part of a three-year project on “spreadsheet engineering”, examined 25 “live” spreadsheets provided by five companies. In all, 117 errors were found in 16 of the spreadsheets. Most of the mistakes altered cell values by less than 10%, but in absolute terms, errors in seven of the spreadsheets amounted to millions of dollars (and, in one extreme case, hundreds of millions).
There was also a lack of consistency in the design of the spreadsheets. In terms of costs, according to Powell, “time wasted working with awkward spreadsheets is a more significant practical problem than errors.” Or as Soheil Saadat, of software vendor Prodiance, put it, once information leaves a centralised data warehouse and makes its way on to a spreadsheet, “all hell breaks loose.”