[This blog post is a repost of http://blog.atos.net/sc/2012/01/25/watch-this-space-are-we-happily-ruled-by-spreadsheets/ ]
I expect that you, like myself, love and hate spreadsheets. They are a great tool for a large variety of mathematic tasks but also for activities like project-planning or creating a really cool family calendar.
And I bet your financial controllers love spreadsheets to bring order to your business world; I can say for myself that I have been in more spreadsheet governed meetings than I care to remember. Over the last couple of years, I have observed that spreadsheets are being used more and more to forecast what is “the next step”, “the obvious strategy” and the “logical business plan”.
Spreadsheet (Photo credit: Jon Newman)
The spreadsheet is being used as a tool to combine data into (hopefully) useful information that guides us in our business decisions. This positions the spreadsheet as the poor man’s Business Intelligence tool; BI for the masses. I think there are a couple of problems with that;
First, a spreadsheet is a generic tool so it has to be adapted to the specific task or market. This creates a challenge which is solved by spending lots of time creating all kind of models by various people (the Excel-wizards…). Each model is better than another and we end up with a myriad of models across departments and organizations (and sometimes even between 2 people inside the same department).
Secondly, and a bit linked to reason number one, the models are rarely fully tested, so there could be errors in formulas or in the use of constants versus variables.
The third problem is the source of the data; is it reliable and what is the status of the data? Although the spreadsheet seems to be collection of facts – the truth is that it can be very misleading.
So it seems that we should avoid these problems and substitute the use of spreadsheets with the use of professional BI tooling. But regrettably this is not happening.
“Despite business intelligence (BI) providers’ and IT departments’ efforts to substitute spreadsheets by trusted BI solutions, it is estimated that up to 90 percent of end users use spreadsheet applications to import information obtained from BI tools and work with it locally”
This quote comes from a whitepaper published by the Atos Scientific Community.
The document shows the usage of spreadsheets as BI tools and explains the issue in much more detail, also pointing out the weaknesses of BI tools themselves.
The whitepaper also gives information on the way we can utilize the power of spreadsheets while at the meantime we can have the benefits of trustworthy data sources, versioning and uniformity.
It is not suggested in the whitepaper that we abandon spreadsheets altogether; In these times the variety of data that can be applied to support decisions is growing and expanding in areas that include external sources and non-typical information.
Because of this flexible data-set versus non-flexible BI tooling, there is a role for the flexibility that a spreadsheet offers to the end-user. The whitepaper describes 3 possible outcomes in this battle of the right way to use BI tooling versus spreadsheets; abandoning spreadsheets and mature the BI tooling, take the best of both worlds and use a spreadsheets as a front end or enhance the spreadsheets themselves.
“Spreadsheet vendors have also realized the potential of spreadsheets as the perfect business complement to BI tools. Recent developments include providing richer integration and the ability to manage large data batches in memory.”
I think the subject is worthy of a serious discussion in any business.
The Atos Scientific Community whitepaper can be downloaded