Thursday, September 28, 2006

The Killer App is Killing Us

The spreadsheet has been heralded as the killer app that drove PC penetration into business (not to mention the Blue brand). The argument was that it reduced errors in manual computations and made repetitive calculations faster. Both probably true.

However, spreadsheets contain errors. For some of the more interesting ones see the web site that tracks them. Articles summarizing research shows an error range of 20-40%. Estimates of $10 billion in errors have been reported. From personal experience I know of two audits of 'production processes' that used spreadsheets where 100% (read "every d*** one") contained errors. We simply weren't consistent across projects or markets. In both cases, real money was at risk since they controlled pricing and product quality.

Bad spreadsheets aren't an IT issue; they are a management issue and go to the heart of data-driven marketing. Please have an outsider from your department look at the mechanics and logic of your spreadsheets.

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