Anyone who’s tried to kick a bad habit will know the struggles of addiction. Whether it’s caffeine, Instagram or smoking, there’s always that part of your brain that wants to go back to the comfort of what you know best.
With spreadsheets it’s the same deal; they’re cheap and accessible, you’ve probably been using them your whole work life and the idea of having to ween yourself off them and switch to something new fills you with dread.
Not all the things we get addicted to are “bad” for us when used in moderation. Spreadsheets, too, can have their place in our professional lives. The problem comes with seeing them as a panacea for the many challenges we face. The global Excel addiction means spreadsheets are used for absolutely everything connected with project management, from project measurement and date-keeping to what they’re actually meant for, i.e. the storing and computation of figures and accounts.
While it is comfortable using Excel as a multi-purpose tool, the fact is that this addiction to spreadsheets is actually increasing your project and organizational risk. Using spreadsheets over specially designed project management software might seem harmless but if you were actually asked to embed the associated operational risks into your work processes there’s no way you’d agree.
Here’s some of the ways your spreadsheet addiction is increasing your project risk and organizational liability.
Making you blind to the consequences – The first step with any addiction is admitting that there’s a problem. However, with spreadsheets they won’t tell you that they’re not doing what you expect them to be doing, like when a formula is incorrect, it will just give you the wrong answer. JP Morgan found this out to the tune of billions of dollars when a portfolio, that was being run by copying and pasting Excel spreadsheets, ended up undervaluing risk by a factor of two, due to dividing by the sum of two numbers rather than their average.
Increasing regulatory risk – Financial regulators are understandably concerned at how much spreadsheets are relied upon. Two major regulatory bodies, the BCBS in Switzerland and the FSA in the UK, have already referenced spreadsheets as a major risk factor for businesses and something that requires increased oversight and control.
Lack of an integrated macro-scale view – To gain effective oversight, one would need to be able to view all projects and operations at once, at a single view. Except with spreadsheets that simply isn’t possible. The FSA has reported 9,000 sheet systems being in place, stacked like a house of cards, so poor formatting can infect an entire system yet be next to impossible to locate.
Affecting your decision making capacity – Due to human error and basic issues connected with the overuse of spreadsheets, a team from the University of Hawaii found that 90% of spreadsheets contain errors. If you don’t have the right information, then it is impossible to make informed decisions on your projects.
Creating insecure situations – Research from Dartmouth College has shown that less than a third of spreadsheets use cell protection. At a time when data and privacy compliance is such a major issue for companies, this can leave your organization open to legal proceedings. Not only that, by not securing your data you may also lose important project or client information, costing your organization revenue.
Sticking with spreadsheets is understandable but not forgivable. It’s an addiction which costs you time and opportunity as well as introducing great risks to your organization. As an the saying (kind of) goes, the best time to kick the spreadsheet habit was yesterday, the second best time is now.