Spreadsheet errors are costing businesses billions, according to financial modelling company FIF9. In their eBook "The Dirty Dozen - 12 Modelling Horror Stories" they estimate that 88% of spreadsheets have some sort of error in them and that approximately 50% of spreadsheet models in use operationally in large businesses have material defects. They state that these mistakes are not just costly in terms of time and money - but also lead to damaged reputations, lost jobs and disrupted careers.
The dirty dozen spreadsheet horror stories include leading organisations such as Oxford University, MI5, The London 2012 Olympics, JP Morgan Chase and the US Federal Reserve. According to their eBook the biggest blunder came from Harvard University who had a spreadsheet error in their analysis of international Government debt to GDP ratios. The flawed research has been quoted as a basis for various European Government austerity measures, which are having profound impacts on millions of its citizens. They say that although there is some debate about the why’s and wherefores' of the economics, the discovery of the spreadsheet error has been well publicised and is highly embarrassing for the 2 eminent academics involved, Carmen Reinhart & Kenneth Rogoff. You can download the full eBook via this link
Spreadsheets undoubtedly have their place within businesses and can be used by many areas of the business, not just finance, for data computation and reporting. However, there is no doubt that there are limitations and errors are common. Many of the companies that use our solutions migrated from "Excel systems" I use the word system loosely!
Before installing Softworks, their HR, time & attendance, holidays/vacations and even scheduling/rostering data was managed in Excel spreadsheets. Separate spreadsheets for each, often managed by different departments and/or personnel. Of course, not surprisingly the data never seemed to match up perfectly between spreadsheets and errors were common. I think we can learn something from this ... and certainly in our experience and our space, change has meant savings in time, money, administration and errors.