A number of recent studies have shown that, among other things, up to 94% of spreadsheets used today contain errors.
Let me repeat that - 94% of spreadsheets used today contain errors. The problem, of course, is not the tool. It is the use, or misuse, of the tool. Spreadsheets in and of themselves are extremely powerful.
It is as simple as the old adage – garbage in, garbage out. The integrity and consistency of the data being entered in your spreadsheets will in large part determine the value of the data that comes out. Common problems include links to bad data, lack of standards, poorly written or inaccurate formulas, not to mention good old fashioned human mistakes like typos.
Considering the previous factoid, did you know that up to 85% of organizations use spreadsheets for critical aspects of managing the business like forecasting, budgeting, planning, and performance management? One study even suggests that as many as 47% of mid market organizations use manually created spreadsheets for many of these purposes, meaning that these spreadsheets are not connected to their accounting or other systems. So not only are most spreadsheets flawed, but most organizations are using these flawed tools to make important business decisions.
Certainly most people who create and use spreadsheets have the best of intentions. The reality is that spreadsheets, even those with flaws, deliver powerful information to business decision makers. People create these spreadsheets to fill the information gap relative to the fundamental decisions of their organization. Examples of this might include territory assignment, or quota setting for the VP of Sales, or ROI on campaigns and customer satisfaction tracking for the VP of Marketing, or operational metrics and job costing for the COO. The list goes on and on…
Thus, if spreadsheets are your compass – the tool you are using to guide critical decisions about the direction of your business – then you should take the time to make sure your compass is really pointing to “true north.” If your information is flawed, you can make all the “right decisions,” but wind up in a very wrong place.
Are you confident in the data going into your spreadsheets? How about the decisions that result from that data? Are you confident that your information is in the 6% minority of spreadsheets that are free from error?
At LÛCRUM, we specialize in finding ways to help our Clients realize the true value of their data. Sure we perform a lot of complicated analytical modeling, create fancy dashboarding tools, and deliver some amazing solutions, but often times we deliver untold value just by making sure the compass is working properly.
How is your company ensuring that the information you use is accurate, timely, and actionable? Do you encounter issues with your spreadsheets and data? How are you overcoming them? How can we help you do this more effectively?