This should come as no suprise… Using Excel for complex analysis on an ongoing basis is asking for trouble!

22 Apr

This report on how using Excel has caused some major miscalculations should come as no surprise… Excel exists because it is pervasive, easy to use and can be applied to a range of decision making activities. However, have you ever had the experience of trying to create a repeatable, defensible and transparent report using excel WITHOUT having to make sure you had done it correctly? The attached article talks about a number of mistakes. I have had a number of discussions over the years with companies that are struggling with whether or not to implement a BI system, and if so to what extent should it provide structure and guidance to the process of using Excel?

The easy implementation of BI is to implement a tool such as Tableau that in essence takes spreadsheets and allows you to pivot the data and visualize more easily that one could in excel. I realize that Tableau does more than that now, but that is how it started and most people appear to use it that way still. This gives you great looking dashboards, and allows you to roll around in the data to bubble up insights. However, it does nothing to address the quality of the report and the issues raised by the article.

At the other end of the spectrum are enterprise level tools that do a great job of locking down the source data, and tracking everything that happens at the desktop to make the final report.These tools are focused on creating the SAME report with exactly the same inputs and calculations as all previous times. To the extent changes are made, they are tracked, and capabilities exist to flag and route changes for review and approval. The downside of course is that they often limit what the user can do with the data.

Somewhere in the middle is the happy spot. To the extent tools are not able to support the requirements for transparency, traceability, and defensibility, these requirements must be addressed through policy, process and standards.  Most of the enterprise tools are configurable to create a well defined set of gates between which analysts and report creators can have complete flexibility.

In the cases mentioned in this article, the technology exists to create the safeguards required. However, the user communities were able to resist change, and management – for whatever reason – did not make the decision to invest in underlying data management, BI and analytical capabilities. In a data driven world, it is only a matter of time before that comes back to bite you.


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