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$10B Annual Tab for Spreadsheet Errors?

Zonk posted more than 9 years ago | from the thats-a-lot-of-pennies dept.

Software 305

theodp writes "According to PWC and KPMG, more than 90% of corporate spreadsheets have material errors in them. With each error costing between $10K and 100K per month, one expert estimates corporate America loses in excess of $10B annually through the misuse and abuse of spreadsheets." From the article: "The key point about spreadsheets is that you need to know which ones are critical to your business, which ones are merely important and which ones you do not have to bother too much about. Once you know that, you can start to apply appropriate policies depending on the criticality of the spreadsheet involved."

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305 comments

Does anyone understand this? (1, Interesting)

sllim (95682) | more than 9 years ago | (#12332532)

I certainly don't. How can a spreadsheet cost money?
What are businesses overpaying bills? Or keeping projects up that are not needed cause of this?

Re:Does anyone understand this? (5, Insightful)

appleLaserWriter (91994) | more than 9 years ago | (#12332558)

Spreadsheets aren't costing money, any more than pencil and paper costs money. It is the bad math that costs money.

I'd bet a LOT of money that fewer mistakes are made with spreadsheets than by people who think they can do perfect math in their head, or perfect long division or multiplication on paper.

Re:Does anyone understand this? (5, Insightful)

Klivian (850755) | more than 9 years ago | (#12332696)

>It is the bad math that costs money.
Wrong, it's not bad math it's wrong use of math. It's more the case of using wrong models to solve problems.

>fewer mistakes are made with spreadsheets
That should read, more mistakes are made faster with spreadsheets. Take a simple example like a spreadsheet to calculate the cost of some project. Lots of places they use a template, filling in some values and the spreadsheet does the rest. Small mistakes in the template can become seriously expensive when all is accumulated.

Re:Does anyone understand this? (1)

Turn-X Alphonse (789240) | more than 9 years ago | (#12332568)

One little typo and "Okay, so that means you owe me.... 10,000,000 pounds" becomes "Okay, so that means you owe me.... 19,000,000 pounds"

Re:Does anyone understand this? (4, Funny)

Creepy Crawler (680178) | more than 9 years ago | (#12332622)

So what you imply is we should overcharge on EVERYTHING and hope the people we're selling XYZ to catches it.

As long as we make mistakes, in OUR BENEFIT, we're ok, right?

Holy shit, you're stupid. (0)

Anonymous Coward | more than 9 years ago | (#12332595)

FUCK, you're so fucking DUMB. You're fucking fired. Get out.

Re:Does anyone understand this? (5, Interesting)

dykofone (787059) | more than 9 years ago | (#12332639)

I was on a co-op with GE Power Systems and was working on their spreadsheets that determined necessary pipe sizes and lengths for certain operating characteristics. There was an error in there that was causing two mismatched pipe diameters to be ordered and sent to the site, at which point it cost somewhere around $10,000 to correct the problem (mainly due to delays).

I fixed the problem in the spreadsheet, and then dug through all the existing orders that were about to be filled and corrected them. The problem had cost GE about $300,000 and was about to cost them another $120,000 in the next month. The interesting thing, is nobody had really cared to do anything about it until an intern came along, and dumped it on me. They just don't see $10,000 as a whole lot of money in the grand scheme of things, so I'm sure stuff goes on like this all the time.

Re:Does anyone understand this? (0)

Anonymous Coward | more than 9 years ago | (#12332713)

WTF are they using a spreadsheet for. Shouldn't inventory control be managed a bit better than that?

Re:Does anyone understand this? (1)

Electroly (708000) | more than 9 years ago | (#12332653)

Example: in the CNC machining industry, you have to buy steel for the jobs. Depending on what jobs you have queued up and how many pieces you want to run, you order different amounts of steel. Spreadsheets are very common for this. If it tells you to order more steel than you really need, there's several thousand dollars right there.

Re:Does anyone understand this? (2, Interesting)

Sinus0idal (546109) | more than 9 years ago | (#12332792)

Yup, and this idea isn't purely with spreadsheets. I used to work for a large supermarkets logistics dept. We used to key in, by hand, orders for stores from suppliers etc all the time. Not a week went by without a store receiving thousands of cases of a product due to a typo..

But how do you check these things? In a business which might be shifting millions of cases of product a day, how do you flag up a couple of thousand, which for any other order, might be quite a reasonable number. And well, the ground staff just did as they were told without questioning.. which is maybe the worrying thing.

Great Example (1, Interesting)

Anonymous Coward | more than 9 years ago | (#12332704)

An electronics engineer friend of mine was using Excel to calculate the durations to keep dam gates open based on sensor inputs.

During debugging and testing his misplaced decimal on the spreadhseet ended up leading to dumping tens of thousands of gallons down what was a mild stream bed.

Small figures early on can lead to dangerous figures in other places.

Re:Does anyone understand this? (0)

Anonymous Coward | more than 9 years ago | (#12332729)

Hard Coding of values, during development, where there should have been formulas. Been there seen that. Cost my government several millions of dollars.

Robert

Re:Does anyone understand this? (4, Interesting)

vegaspctech (769513) | more than 9 years ago | (#12332731)

As I understand it, it's a slow news day can mean time to post things from the totally unsubstantiated category that's always chock-full of stories thanks to the the only way I'll beat the deadline is to make something up effect.

It's simply bad journalism. The author names PWC as a source of the 'over 90%' figure, but PWC in turn was citing some professor from Hawaii who had looked at 54 spreadsheets and found errors on 49 of them. 54 is a sample so small as to be absolutely meaningless and everyone responsible for the story finding it's way here should hang their heads in shame.

Re:Does anyone understand this? (5, Insightful)

Anonymous Coward | more than 9 years ago | (#12332795)

Rule1 - Never! Never! Never! put your busness on a speadsheet.

Rule2 - refer to rule 1

There is nothing wrong with speadsheets and they are very usefull for analysis but what happens is people try to use them for everything and eventually you have a spreadsheet that is used as a company database.

Yes I am aware you can lock a spreadsheet but how long before someone (usually a manager) makes a "special" change and before long all sorts of "special" changes occur and things start to get rapidly out of synch.

A simple analogy is how may people have ever seen simple Unix groups work really well, now take that one step further to ACL's and it starts to get interesting. This is particularly true when you have many people wanting to make changes. The poor Sys Admin can only duck and run for cover.

Oh wait (5, Funny)

Anonymous Coward | more than 9 years ago | (#12332533)

That's a $10 Annual Tab for Spreadsheet Errors. Misplaced a decimal!

Ummm (5, Insightful)

Anonymous Coward | more than 9 years ago | (#12332535)

Documents have typos. Film at 11.

Re:Ummm (4, Interesting)

Stevyn (691306) | more than 9 years ago | (#12332651)

This is probably just another case where some statistician takes a common problem, makes a few guesses, and comes up with some exorbenant figure to scare people into paying attention. You can support any point with statistics.

Think of this, when you are finished with a tube of toothpaste, there is still a little you can't squeeze out. I'm sure someone could add all that up and claim Americans are throwing out $100 million a year on toothpaste. You could say the same about a lot of products. But what's the point? If you can't do anything about it, why worry yourself over it?

So in this case, you can't eliminate all accounting mistakes and typos, but if some PHB needed to read this to question his spreadsheets, he's useless.

Re:Ummm (4, Funny)

sphealey (2855) | more than 9 years ago | (#12332703)

This is probably just another case where some statistician takes a common problem, makes a few guesses, and comes up with some exorbenant figure to scare people into paying attention. You can support any point with statistics.
Not to mention that he probably used a spreadsheet to calculate those statistics...

sPh

Re:Ummm (1)

gardyloo (512791) | more than 9 years ago | (#12332722)

Documents have typos. Film at 11.

I think you misspelled "10". Our dials don't go up that high.

Re:Ummm (0, Offtopic)

hazem (472289) | more than 9 years ago | (#12332768)

I think that's 11 as in 11:00pm. News often comes on local channels in the US at 11:00pm.

this is a news article? (3, Insightful)

Anonymous Coward | more than 9 years ago | (#12332538)

people make mistakes.... it costs money.... next please?

Re:this is a news article? (1)

RealityMogul (663835) | more than 9 years ago | (#12332619)

Put the right spin on it.

Microsoft Excel spreadsheets used in business have been proven to cost a lot of money due to mistakes.

GIGO (2, Insightful)

OverlordQ (264228) | more than 9 years ago | (#12332541)

Garbage In, Garbage Out

Just because this deals with spreadsheets makes it news? I think people have had this problem since people started making inventories.

Re:GIGO (2, Interesting)

kaiser423 (828989) | more than 9 years ago | (#12332574)

Exactly. There were most likely more errors of this type before the spreadsheet came to be. You read the article, and this guy is on some weird, stupid war against spreadsheets. The article, and the paper he wrote about spreadsheets is pure drivel, and horribly slanted. Not a study at all. He can't even suggest a viable alternative.

Re:GIGO (1)

rokzy (687636) | more than 9 years ago | (#12332575)

we need a "spreadsheets make people stupid" like with powerpoint.

at my work we use linux, but the retarded admin staff need to use windows and office for their crap.

need to email people a list of something? they reach for Word. want a 2-column list? Excel!

ffs. openoffice or my mac can deal with them fine, but it's the same sort of retardedness as HTML-emails. it's like proof that god exists and he doesn't want us to be happy using computers.

spreadsheets are insanely useful (0, Redundant)

appleLaserWriter (91994) | more than 9 years ago | (#12332544)

A major factor in my switch to Macintosh as my primary platform was that I could run both perl and Excel on the same machine.

Maybe if more geeks played with the spreadsheets we could come up with best practices to hand over to the PHBs.

It has been over a decade since the last innovative new spreadsheet - Lotus Improv. Time for something new.

Re:spreadsheets are insanely useful (1)

0racle (667029) | more than 9 years ago | (#12332586)

I must be special since I can run perl and Excel on Windows.

When was the last time your manager asked for best practices instead of dictating them?

Re:spreadsheets are insanely useful (0)

Anonymous Coward | more than 9 years ago | (#12332623)

the PHBs dictate left and right, but they actually listen when I make suggestions. Several have worked out in the past, so they are often eager for new suggestions.

Re:spreadsheets are insanely useful (1)

joshv (13017) | more than 9 years ago | (#12332590)

A major factor in my switch to Macintosh as my primary platform was that I could run both perl and Excel on the same machine.

You could have saved yourself some money and downloaded and installed Cygwin for free.

Re:spreadsheets are insanely useful (0)

Anonymous Coward | more than 9 years ago | (#12332611)

yeah, I do that on my windoze boxes, but it still doesn't make them unix.

Re:spreadsheets are insanely useful (1)

rokzy (687636) | more than 9 years ago | (#12332631)

only if you assume your time is worth nothing or that you already know linux.

Re:spreadsheets are insanely useful (1)

arose (644256) | more than 9 years ago | (#12332694)

My time is worth less then my mental healh. Yet I only pay in time when learning GNU/Linux, learning Windows costs both.

Re:spreadsheets are insanely useful (1)

rokzy (687636) | more than 9 years ago | (#12332772)

>My time is worth less then my mental healh. Yet I only pay in time when learning GNU/Linux, learning Windows costs both.

My money is worth less then my mental healh. Yet I only pay in money when using Mac/OSX, learning linux costs both (I still need to buy a computer to run linux on).

Re:spreadsheets are insanely useful (3, Informative)

jumpingfred (244629) | more than 9 years ago | (#12332594)

I run both perl and excel on my windows computers. Perl versions for windows have been out for a long time.

spreadsheets are insanely useful-XSIS (1, Interesting)

Anonymous Coward | more than 9 years ago | (#12332677)

"It has been over a decade since the last innovative new spreadsheet - Lotus Improv. Time for something new."

http://www.codecomments.com/message1511409.htm [codecomments.com]

"- Spreadsheets. The Analyst Spreadsheet (which was also sold as a
separate package) was simply the best. Cells could contain arbitrary
Smalltalk objects, and forula were arbitrary Smalltalk code. When we
showed people things like image manipulation within spreadsheet cells
or computing inverses of matrices containing fractions and/or complex
numbers, they often could not believe what they saw :-)"

Re:spreadsheets are insanely useful (1)

Ogerman (136333) | more than 9 years ago | (#12332723)

It has been over a decade since the last innovative new spreadsheet.. Time for something new.

Indeed.. time for something new. Spreadsheets, the poor man's database, are finally beginning to die out. Good riddance! Make way for RAD tools and web database applications! Any organization that stores important data in spreadsheets has something severely wrong with their IT department.

..What was the huge need for expensive MS Office again?

Re:spreadsheets are insanely useful (3, Funny)

shutdown -p now (807394) | more than 9 years ago | (#12332767)

In other words, the major factor in your switch is your laziness to google for perl+windows [google.com] ?

Other Losses? (4, Interesting)

teh merry reaper (758071) | more than 9 years ago | (#12332555)

This article only brings up losses and problems with the spreadsheet format. I'm sure, however, that there are inaccuracies in company word documents, e-mail, and other forms of communication. How should spreadsheets be any different?

Re:Other Losses? (1, Funny)

Anonymous Coward | more than 9 years ago | (#12332616)

Oh this makes me feel all warm and fuzzy. Lets build a bureaucracy around spreadsheets.

Spreadsheet requirements gathering - 2 weeks
Spreadsheet Use Cases - 1 week...

Sorry sir you can't use a spreadsheet to organize your pencil collection until next month because IT needs to make quarter numbers and cut expenses.

Primary error (4, Interesting)

Cow007 (735705) | more than 9 years ago | (#12332562)

Many people say that the whole idea or spreadsheets is fundamentally flawed because a single error can propagate itself throughout the whole spreadsheet so a miscalculation early on tends to expand exponentially down to the rest.

Re:Primary error (0)

Anonymous Coward | more than 9 years ago | (#12332600)

Your sig is backwards. That's a sign that something is finally going right.

Re:Primary error (3, Insightful)

kaiser423 (828989) | more than 9 years ago | (#12332603)

Well, that matters on how you're using the spreadsheet.

Also, if you're doing it by hand, how would that stop that error from propogating on down. I remember when I used to do tons of basic math by hand, little errors would still propagate through. At least with a spreadsheet, you can program in some error-checking logic.

With a spreadsheet it's a lot easier to get the same answer multiple times rather than doing it by hand each time.

There's nothing inherently evil with electronic spreadsheets. We had been using paper ones forever before then, and they had the same (and in many cases, worse) problems.

Re:Primary error (1)

yagu (721525) | more than 9 years ago | (#12332617)

That type of logic applies to any data error rippling through any data system... not only spreadsheets. The problem in my opinion isn't the fallibility of spreadsheets, it's the misconception that anyone can "handle" them.

Re:Primary error (1)

SUB7IME (604466) | more than 9 years ago | (#12332661)

The whole idea of any algorithm is fundamentally flawed. Any input error into, say, a math equation can be propagated throughout the whole equation, giving a wrong answer!

Re:Primary error (1)

phukraut (668761) | more than 9 years ago | (#12332670)

The whole idea of mathematical proof is fundamentally flawed because a single error can propagate itself throughout the whole proof so a miscalculation early on tends to expand exponentially down to the rest.

Really, that's exactly why spreadsheats are so useful. I think this is just a matter of people not double checking their work, like in anything else.

Re:Primary error (1)

LurkerXXX (667952) | more than 9 years ago | (#12332675)

The same can happen in a relational database. What solution do these people pose that is a better solution?

Obligatory Charles Babbage (1)

Weaselmancer (533834) | more than 9 years ago | (#12332746)

On two occasions I have been asked by members of Parliament, "Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?" I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question.

Why shouldn't a spreadsheet cause the exact same problems as entering the wrong number into a ledger? What is it about having a computer involved that somehow makes entering a wrong number more insidious?

Bad data propogates throughout any set of calculations, making the ones that come after....wrong. This shouldn't be a surprise to anyone.

Re:Primary error (4, Insightful)

bcrowell (177657) | more than 9 years ago | (#12332776)

Many people say that the whole idea or spreadsheets is fundamentally flawed because a single error can propagate itself throughout the whole spreadsheet so a miscalculation early on tends to expand exponentially down to the rest.
Well, that would be that case no matter how the calculation was done, wouldn't it? I think the issue is more that spreadsheets tend to be impossible to test or debug adequately. It's like spaghetti code without comments. Of course in a simple case, each column has a clear name, and the calculation flows nicely from left to right, and everybody understands what it's doing. But that's like saying that in a simple case, FORTAN programs flow from top to bottom, and everybody understands what they're doing.

I know at least one not-pointy-haired boss (my mom) who has had major problems with spreadsheets created by employees that are flaky, poorly documented, or poorly understood.

The good news is that spreadsheets let people who aren't programmers do all kinds of fancy calculations on a computer. The bad news is that spreadsheets let people who aren't programmers do all kinds of fancy calculations on a computer.

1 small problem with spreadsheets (5, Insightful)

aendeuryu (844048) | more than 9 years ago | (#12332563)

One small problem with spreadsheets is that people sometimes use them instead of databases, I guess because the interface seems simpler than making a properly developed interface to a database from the getgo. Then you get locked into the solution, etc.

This was definitely a problem at my old job. They wanted to create a payroll sheet to keep track of hours, and the easiest way to do it was via a spreadsheet. I was the most programming-savvy person there (heh, you can already smell their doom), at so, not having any database training, I created a really suped-up spreadsheet that handled it for them. It was GREAT, until we had a work situation in which some people worked past 12:00 at night. At that point, people's total shift hours came out negative. We got it fixed eventually, but it involved some really nasty calculation, and it was a problem that could have much more easily fixed if it'd been done by database from the start.

Re:1 small problem with spreadsheets (0)

Anonymous Coward | more than 9 years ago | (#12332612)

I'm not trolling but can't you just kick their asses before the problems begin? Can't you just say that you will use a real database instead of a spread-sheet? (I'm a student and don't know what's happening in the real world...)

Re:1 small problem with spreadsheets (1)

Metaphorically (841874) | more than 9 years ago | (#12332646)

This is a perfect example of the problem with spreadsheets. As for using a database from the start: it is the better idea, but you'd be surprised at the opposition that you can get. Some managers just don't like databases. Don't ask me why, but it happens.

Re:1 small problem with spreadsheets (2, Interesting)

Klivian (850755) | more than 9 years ago | (#12332793)

It can get worse. Try having one of the PHB drop by when you're working/debugging on one, in table view(Used Access in this case). And then having him on later project meetings constantly referring to it as "excel sheets". It gets rather hard do convince the management to give resources for further development/bug fixing for those excel sheets, as they never need such for their own.

Re:1 small problem with spreadsheets (1)

aendeuryu (844048) | more than 9 years ago | (#12332650)

Two problems:

1. tech-unsavvy bureaucracy. They want quick solutions, and don't want to do research into the best alternative so long as they can get a good-enough alternative.

2. tech-unsavvy employees. I had no database training at the time, so I couldn't recommend it at the time. But I'd done some payroll stuff with spreadsheets before, so when they said they wanted a spreadsheet to do it, I said alright.

Sometimes, a tech-savvy employee can help guide the tech-unsavvy management to the right decision. Unforunately, that's not always the case...

Re:1 small problem with spreadsheets (1)

splitterbob (878646) | more than 9 years ago | (#12332630)

Talk about spreadsheet abuse! A project i worked on for the production division of an oil company involved a huge spreadsheet with over 50 fields. they pretty much used it as a "database". Took a while to sift thru the data and make an access DB out of it and normalize the data(they didn't even use IDs).

Re:1 small problem with spreadsheets (0, Troll)

cinnamon colbert (732724) | more than 9 years ago | (#12332756)

maybe if the DBs were a little easier to use.... always easy to blame the user, isnt it.

I once tried to download Mysql, just for laughs. Boy, those people could use a trainign lesson in how to present software to newbys....

Nonsense (0)

Anonymous Coward | more than 9 years ago | (#12332569)

More nonsense brought to you by someone who wants to be paid to solve the "problem". My guess is that these so-called spreadsheet errors are essentially random, and that for every error that leads to a bad decision, there's probably one that mistakenly leads to a good decision.

Adopt a spreadsheet today, for the children. (4, Insightful)

ScentCone (795499) | more than 9 years ago | (#12332570)

abuse of spreadsheets

Is it just me, or is that just a wee bit breathless, from an analytical point of view? I doubt that even "misuse" really even has the right connotation, here. More like, misuse of math.

Re:Adopt a spreadsheet today, for the children. (0, Troll)

F13 (9091) | more than 9 years ago | (#12332762)

Get your barely legal shreadsheets HERE [bls.com] today!

All the hottest math this side of a database, including SUM, AVERAGE, MAX and SIN. Don't forget for this week only we are having a special on STDEV.

Re:Adopt a spreadsheet today, for the children. (2, Interesting)

TopShelf (92521) | more than 9 years ago | (#12332779)

I would agree that "misuse" is a better word, but misuse of spreadsheets themselves can wreak havoc within an organization. Here's just one recent example from my experience.

We're loading tens of thousands of items into an ERP from spreadsheets put together by users. Many items have leading zeroes which are to be preserved, and spaces which are not. For example, part number 0032330 189 5 should be loaded into the ERP as 00323301895. When using Excel's Find/Replace function (replacing " " with ""), the leading zeroes were lopped off of some records. If a string had letter contained in it, the leading zeroes were left alone - if it was all numbers, the leading zeroes were lopped even though the cells were formatted for text. This led to wrong information getting loaded in and subsequent rework to correct the errors.

Spreadsheets can be a powerful tool in the hands of a strong analytical user, but their sloppy data handling leaves a gap compared to more structured business systems.

And this money goes where? (3, Insightful)

geophile (16995) | more than 9 years ago | (#12332571)

If I undercharge due to a spreadsheet error, then I'm out $N, but someone else is $N better off.

If only there were some consulting company, someone who I could call to help me implement some best practicies, to help me avoid these tragic errors. Do PWC and KPMG know anyone who can help?

Re:And this money goes where? (1)

s7uar7 (746699) | more than 9 years ago | (#12332601)

Exactly. Never ask a barber if you need a haircut.

Re:And this money goes where? (1)

Mr.Progressive (812475) | more than 9 years ago | (#12332684)

Slashdot really ought to include a permanent link to that recent Paul Graham article [paulgraham.com] on the front page. Just for, y'know, context.

yoy (2, Interesting)

yagu (721525) | more than 9 years ago | (#12332576)

I never ceased to be amazed at "projects" handed to me from which the management of the assets, funding, etc. were all contained in a spreadsheet, typically in that person's "Documents and Settings" directory somewhere (the "My [insert the item du jour here]" sometimes, sometimes not.

And the spreadsheet often as not was written by someone not familiar with how spreadsheets worked, and were not of programming ilk.

Once (and I'm NOT making this up) I watched as one of the afore-referenced changed a value in a cell, added the values of a small range and entered that number in a "totals" cell. Said person was very surprised when shown the "sum" function.

And this was an incident in a very large corporation... with lots o' money at stake. I was never very popular for taking my stance, but I would always refuse to allow any spreadsheets be a part of my projects for managing info.... (and don't EVEN get me started about using spreadsheets for documentation... )

Re:yoy (1)

TopShelf (92521) | more than 9 years ago | (#12332820)

You should see the process maps that some people in my company make with Excel. Yup, colored boxes and arrows with associated text all cobbled together in a spreadsheet!

How'sabout calculating the cost (1)

Creepy Crawler (680178) | more than 9 years ago | (#12332578)

Of having people working on these problems?

We address the cost of every little thing in this culture. How much do adverts bring? How much does this job bring in? How much will it cost to clean this chemical spill up? How much does it cost to treat our employees better?

There's a bigger question these businesses could ask: How much would we save if we just shut our doors now?

During the Microsoft DoJ lawsuits, I wondered why MS just didnt close up shop, rescend all the EULA-licenses and just quit. Why would you deal with legal harassment when you can just take the profits you already have, and just shake your hands and say "Too bad"?

Oh well, I guess Karl Marx was right about his looking at Capitalism: He said it would continally be vigilant about 'lost profit' and cut all costs so effectively in that the people would be paupers.

Just think, does 10 Billion actually sound right, or does it sound like every other 'computer number cost' associated...

Re:How'sabout calculating the cost (1)

cyberfunk2 (656339) | more than 9 years ago | (#12332747)

"Why would you deal with legal harassment when you can just take the profits you already have, and just shake your hands and say "Too bad"?
"

1) because the cost of closing shop is very expensive, and cuts into profits.

2) this move doesnt benefeit the shareholders.

2) being the most important, since they control the company.

Re:How'sabout calculating the cost (1)

Creepy Crawler (680178) | more than 9 years ago | (#12332778)

You have no clue what board meetings liek that could be like....

for example...

"The law is now harassing us and many of them want for our splitting and destruction. The best solution we forsee is that we literally lay everybody off, seel everything to reimburse our stockholders, and file bankurptcy proceedings. If we continue on this course we're on now, we possibly we split, and perhaps lose everything cause of judgements aginst us"

It really comes down to a vote and what the 'stockholders could forsee to make best profit'.

Re:How'sabout calculating the cost (1)

cyberfunk2 (656339) | more than 9 years ago | (#12332814)

MS didnt close shop for several reasons. First and foremost, many of the stockholders are MS employees, and they have pride in their company, and a personal investment in the company that gives them reason to not want to just give up. Second, it was clear that Microsoft thought it could win, and in fact, for all practical purposes, it DID win. Third, closing shop would require all outstanding shares to be bought by the company, at enormous cost, this is potentially money they dont HAVE. Fourth, and this is ironic coming from microsoft, but there is the issue of corporate responsibility. If Microsoft just "gives up" do you realize the impending panic in the computer world? Especially among people who've only ever known a MS-OS ? MS giving up was never an issue, MS knew this and the DOJ knew this. I'm sure a real economist can explain better than I , and with more justification, why they didnt close shop, but I never wondered why they didnt. The idea seems, quite frankly, rediculous that they would.

Sarbanes-Oxley (0)

Anonymous Coward | more than 9 years ago | (#12332579)

Costly Compliance: As the full demands of complying with Sarbanes-Oxley become clear, companies are increasingly calling for help to rein in the costs. [gfmag.com]

"It's only a three-sentence section tucked inside the 64 pages of the Sarbanes-Oxley Act--that sweeping piece of federal legislation aimed at curbing corporate corruption in public companies--but Section 404 is costing corporations at home and abroad billions of dollars in compliance costs and missed business opportunities."

Attn: Companies (2, Informative)

MrPoopyPants (146504) | more than 9 years ago | (#12332585)

I am an excellent proofreader. Pay me $10K per month to proof all of your spreadsheets. My job will pay for itself!

Re:Attn: Companies (1)

wootest (694923) | more than 9 years ago | (#12332634)

I'm sure you meant to say "$100K".

Criticality? ARGH! (1)

dzeaiter (524393) | more than 9 years ago | (#12332591)

I hate business-speak so much.

Just say "depending on the importance" or something simple like that.

Plain-speaking will save us all =)

How did they work this out? (0, Funny)

Anonymous Coward | more than 9 years ago | (#12332592)

Did they run the numbers through a spreadsheet?

Defects in software, use, or both? (1)

Spoing (152917) | more than 9 years ago | (#12332615)

For the software errors, do they mean the problems listed here? [csdassn.org]

What tools can they use? (5, Insightful)

Metaphorically (841874) | more than 9 years ago | (#12332621)

The scary thing is the suggestion that the IT department should take over spreadsheets. Many people use a spreadsheet for applications that would better be served by a database with the appropriate front end and back end, or a dedicated software application. This article mentions managers specifically, but lots of employees whip up a spreadsheet and throw in some macros then find that the spreadsheet grows to a point of some real usefulness.

It's when the spreadsheet becomes useful that people realize it's not scalable (maybe they don't use that word, but I do) and can be tough to maintain.

Not to single out IT departments in particular, but I think the reason that these spreadsheets start up and grow is specifically that it's often difficult to get someone in another department to understand your needs well enough to make the tool that you really need.

Today managers can't fund a good solution because their budget doesn't allow for the necessary development. Tomorrow they won't be able to afford to get the support they need to get a spreadsheet done.

I don't have a great solution outside of better training for people on how to make spreadsheets that serve their needs.

Of course. (0, Troll)

lheal (86013) | more than 9 years ago | (#12332626)

A spreadsheet is really a simple language. Toss in the horrid formulas Microsoft, err, innovated from Lotus 1-2-3, and you have a programming environment.

It's axiomatic that every nontrivial program has at least one bug.

Are 10% of spreadsheets trivial?

Loses 10 Billion? (2, Insightful)

tyleroar (614054) | more than 9 years ago | (#12332635)

I don't get his point. Of course there are going to be some errors within the spreadsheets. Does this mean people are actually losing money because of it? The benefit that they provide far outweighs its disadvantage.

Spreadsheets get used in weird places (3, Interesting)

GileadGreene (539584) | more than 9 years ago | (#12332637)

Spreadsheets get used in the weirdest, most unexpected places. For example, both JPL's Project Design Center [nasa.gov] , and the Aerospace Corporation's Concept Design Center [aero.org] , use multiple Excel spreadsheets to design spacecraft. Not to the "nuts and bolts" level, but a preliminary design concept that can be used for rapid feasibility and trade studies, and rough cost estimates. Note that most JPL missions pass through the PDC during their development. And the bulk of the new generation of USAF spacecraft get their requirements, cost, and payload complements hammered out in Aerospace's CDC.

ESA has a similar facility, as does NASA Goddard. And from what I've heard contractors like Boeing have experimented with the same kinds of ideas.

Re:Spreadsheets get used in weird places (0)

Anonymous Coward | more than 9 years ago | (#12332825)

This is exactly what spreadsheets should be used for.... what-if analysis.

the difference is that these spreadsheets are often dynamically linked to more complex simulation and analysis models

this allows an analyst to apply their experience and quickly see the interaction of design parameters... an excelleent use of spreadsheets

and how were these data collected? (1)

yagu (721525) | more than 9 years ago | (#12332638)

And how were these data collected?, and the conclusions therein derived?

A spreadsheet, perhaps?

junk journalism (0)

bolix (201977) | more than 9 years ago | (#12332640)

I have problems digesting theRegisters style of self-important braggart journalism. Its more than just juvenile sensationalism, its downright irresponsible reporting. Stick to the fucking facts and shove the opinion.

[TheRegister Article Summary]

Rampant KPMG/PWC cronyism blames spreadsheets for mangerial incompetence rather than the managers. Shock Horror!

[/TheRegister Article Summary]

Shameful reporting (1)

andrewzx1 (832134) | more than 9 years ago | (#12332641)

Whosoever put this up should be spanked. This really smacks of a strawman argument. Consider where we would be if we suddenly dumped spreadsheets and went back to calculators. Consider that spreadsheet errors might really just be the poor implementation of lackluster business practices by poorly trained or less than motivated workers? But wait, isn't that just called 'business'? This reminds me of how big a buzzword Business-to-business was some 5 years ago. And then people started to realize how redundant this was. Afterall, B2B is really just business afterall. So why blame spreadsheets? I blame President Bush.

This will cost you... (2, Interesting)

Reignking (832642) | more than 9 years ago | (#12332655)

This happened to a friend of mine. A consultant decided to send a spreadsheet around to all of the employees, about 25, with some HR data, such as hours worked, etc. However, some of it had been copied and pasted as an object, from another worksheet.

What was in that other worksheet? Oh, everyone's salaries :)

Spreadsheets vs. programming languages (4, Insightful)

G4from128k (686170) | more than 9 years ago | (#12332657)

Although spreadsheets can contain costly errors, so can programs written in any language. I would argue that spreadsheets are a very powerful IDE for a wide class of small problems and can more easily create software with lower rates of errors than other "language oriented" approaches to software development.

The reason spreadsheets provide superior debugging versus language-based software is that they instantly display the intermediate results of the formula every time the inputs or formulae change. Change one number in the inputs and the programmer can instantly see the intermediate and final calculations and do a visual sanity check on the results. In contrast, language-based software creates several impediments such as a manual edit-compile-run cycle, manual/isolated debugging statements, and few easy ways to visually monitor all the values of all the intermediate variables.

Don't get me wrong, spreadsheets have some severe limits. First, they can provide too much power to developers with too little experience/competence. If the developer is an idiot, they are more likely to be able to create a spreadsheet than a program, but just as likely to create (and not find) serious logical error. Programming languages, to some extent, create a barrier that blocks morons (not always). Second, spreadsheets don't scale to large/complex problems very easily. Some of this reflects the monopolist state of the spreadsheet market -- the lack of competition for Excel means that it has not substantively improved in the last decade. (e.g., why is Excel still limited to 256 columns?!?!?).

Computers - Better Mistakes (3, Insightful)

johnnick (188363) | more than 9 years ago | (#12332668)

This one has been known for a while, but perhaps the FUD associated with a number like "10 BILLION DOLLARS" (said in appropriately Dr. Evil-ish fashion) could get some attention.

Spreadsheet functionality enables people to bury calculations and they become legacy tools within departments. They are like some of the worst spaghetti code. Someone who may be a serious spreadsheet jock develops a neat tool and it gets implemented in his/her department. The jock leaves, but the tool stays and continues to be used, despite the fact that no one left really knows how it works. Even assuming that there are no errors in it, as circumstances change, the spreadsheet might not produce the "correct" answer, but everyone accepts the answer produced by the legacy spreadsheet because "that's the way we've always done it." And, should someone attempt to modify the spreadsheet, they could get bitten by buried or misunderstood calculations.

Also, spreadsheets enable executives to embed assumptions and play "what ifs" with their forecasts, which is good. But then they use the scenarios they like best to get their pet projects approved using some rather suspect forecasts that "must be true because that's what Excel says the results are."

Spreadsheets are valuable tools, but, like any tool, you can get bitten if you don't really understand what you're using.

John

Whoa slow down (3, Interesting)

Illserve (56215) | more than 9 years ago | (#12332676)

This is money that is "lost" or "gone".

Assuming these errors are uniformly distributed, there are roughly equal numbers of errors in the positive and negative directions. The idea that such money is just vanishing from our economy is flat out wrong.

And even if the errors are heavily biased in one direction, the money is still somewhere, it's just being less efficiently distributed.

Spreadsheets vs. Databases (4, Insightful)

SerialHistorian (565638) | more than 9 years ago | (#12332682)

How do spreadsheets cost companies money?
Just about everything in many companies is tracked on spreadsheets. Expenses, costs, estimates, budgets, projects, etcetera so on so forth.

Often times, employees will use spreadsheets when a database (even Access) should've bene used. As soon as the spreadsheet becomes 'mission-critical' and contains information that is used to run the business and cannot be lost, you'll start to see employees whose sole job is to feed, maintain, and munge that spreadsheet. When data's in a format like Excel that can be shakey, you can see data errors start to build up when one page is dependent on another page which is dependent on another page which is dependent on some figure buried back in cell DA256 on Page 5 of the workbook... which is dependent on some other figure ... which gets munged or erased due to a
And the worst part is that it's usually impossible to trace these errors back because there's no way to take a step away from it or a debug tool.

(How do I know this? I write custom software for small businesses that realize that they can't continue doing business the way they're doing it.)

Re:Spreadsheets vs. Databases (1)

SerialHistorian (565638) | more than 9 years ago | (#12332714)

(Bah. ... gets munged or erased due to an error with something else, a data source, or a wayard macro.)

S10B breakdown (0)

Anonymous Coward | more than 9 years ago | (#12332693)

$1B for calculation errors $9B for cost of pc's thrown out of office window due to Clippy popping up.

This IS a serious problem (0, Redundant)

omb (759389) | more than 9 years ago | (#12332697)

Before spreadsheets, managers used bookeepers, ie junior accountants, who both kept the records and reported the results.

And if slow, and mode costly, they did, by and large have some insight into both the data and what they were doing.

Now, less skilled people input the data and the spreadsheets themselves are rarely maintained, debugged and audited; no is the security of and version control of the spreadsheet-code seen as important.

No wonder bad business decisions are made with this, and with Sabannes-Oxley you can be sure internal auditors will start noticing and complaining.

Management by Spreadsheet (1)

Phil06 (877749) | more than 9 years ago | (#12332765)

Has anyone walked through a typical office lately? Doesn't it seem like everyone is working endlessly on spreadsheets? They all seem to be spending more time formatting things than actaully getting useful/profitable information out of them. I'm sure you have all been there, you give your boss an exquisitely formatted sheet and he wnats you to change it anyways. Check any class in Excel, the first thing they teach you is how to format, not the basic math and logic you need to create something useful. The problem with the $10-100K number is that someone probably formatted the number wrong.

spreadsheet vs database (1)

headhot (137860) | more than 9 years ago | (#12332766)

I can't believe how many times I've seen data that should be in a database instead of a spreadsheet. At my old company they would do monthly reports, and every month was a new spreadsheet. Because of this performace from month to month could not easily be tracked. If it were in a database, they could have looked at the performace over any time period.

For the love of Cthulhu! (1)

shift.red.avni (858445) | more than 9 years ago | (#12332786)

Has anyone done research on how much money is wasted each year on pointless white papers by IT research firms?

Hm? (0)

Anonymous Coward | more than 9 years ago | (#12332788)

I bet corporate America makes a lot more than $10B on spreadsheet "errors."

Silos of Information Cost Money (1)

Proudrooster (580120) | more than 9 years ago | (#12332800)

Sometimes I think Excel should be de-installed from corporate PC's. Excel allows well-meaning employees to create little piles or "silos of information" which aren't shared in any type of sane manner. Since the silos of information are not connected in any centralized manner, people are just guessing at costs, numbers and estimates. Using guesses to make key business decisions and can lead to very poor performance. Just ask the spreadsheet kings [spredgar.com] over at Enron and Worldcom. I wonder how many secret spreadsheets or silos [suu.edu] these guys had lying around? However, thanks to Dick Cheney we may never know.

To illustrate how spreadsheets can kill, imagine you are working on a project proposal. Usually a typical Excel spreadsheet will get emailed, modified, emailed, modified, emailed, modified for weeks to many, many people. Until... one morning at 2:00AM, the day before the proposal is due, the final cut will need to be made. How do you know which spreadsheet contains the correct numbers? Maybe you needed to merge multiple master spreadsheets together. Maybe you were waiting on numbers from someone else. Have you ever been here? What do you do? What did you do?

Using Excel to manage a corporation reminds me of an old saying, "When the only tool you have is a hammer, every job looks like a nail." Instead of investing time into procedures and systems (to do things correctly and sanely), companies rely on managers with Excel to get numbers for proposals, projects, quotes, etc ... I can see how spreadsheets can lead to lost revenue and bad decision making.

Spreadsheet Hell (1)

Jere H (220274) | more than 9 years ago | (#12332806)

There is a quote spreadsheet at my work that I have had the unfortunate task of dealing with. There are 14 tabs of information on it, many dealing with displaying the same information in different forms (cover sheet, billing sheet, materials sheet, build sheet, etc.) and there are multiple ODBC queries and links to other (some non-existant) spreadsheets.
Every quote that is generated is saved as its own file based on the part number being built and the customer. There are approximately 3500 different quotes that have been generated over the years.
My task was to pull certain fields of information off of different tabs in each of these Excel files and combine it all into a master "database" of information - once again in an Excel spreadsheet. The problem is that the data and presentation are not separate and the format of forms has changed over the years, so information is not in the same place on all of the files. I managed to do it in a couple weeks' time using VBA macros in Excel.
My pleas for a database solution went unheard.

One time I forced a database upon my management, and they still refuse to use databases for any new projects even after seeing some of the benefits of keeping the data and presentation separate. Keeping track of all the IT assets has been easier, though. When they asked for labels for all of the computers stating what the system specs of each machine were, they could be printed in less than 5 minutes, which was mostly spent designing the form to print the labels.

KPMG Should Know (0)

Anonymous Coward | more than 9 years ago | (#12332809)

KPMG knows a thing [nysscpa.org] or two [boston.com] or three [sec.gov] about numbers not quite adding up.

Article Has Spreadsheet Error (4, Funny)

rewinn (647614) | more than 9 years ago | (#12332821)

>... $165,000 times 9 times 500. That amounts to just shy of three quarters of a billion dollars. And is that anywhere near realistic? No. It is probably safe to say that corporate America, for example, loses in excess of $10bn annually ...

Can You Spot The Spreadsheet Error?

Cell B1 = $165,000
Cell B2 = 9
Cell B3 = 500
Cell B4 = B1*B2*B3
Cell B5 = $10 BILLION

caca (0)

Anonymous Coward | more than 9 years ago | (#12332829)

this is pure caca.. you know... shit

KPMG anthem (1)

Solder Fumes (797270) | more than 9 years ago | (#12332834)

Remember the old days of Corporate Anthems?

chorus
KPMG, we're strong as can be
A team of power and energy
We go for the gold
Together we hold onto our vision of global strategy.

KPMG, we're strong as can be
A dream of power and energy
We go for the gold
Together we hold onto our vision of global strategy.

verse one
We create, we innovate
We pass the ones that are la-a-ate.
A global team, this is our dream of success that we create.
We'll be number one, with effort and fun
Together each of us will run for gold that shines like the sun in our eyes

chorus
KPMG, we're strong as can be
A team of power and energy
We go for the gold
Together we hold onto our vision of global strategy.

KPMG, we're strong as can be
A dream of power and energy
We go for the gold
Together we hold onto our vision of global strategy.

verse two
The time is now to lead the way
We share the same idea that may win by the end of the day
Our strength is here to stay
Identity, one energy, one strategy, with sympathy
These are the words that will lead us into our new world.

chorus, repeat ad nauseam
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