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You shouldn’t use a spreadsheet for important work

lemire.me

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Re: You shouldn’t use a spreadsheet for important work

#101

Felienne Hermans has done some very interesting work examining how to refactor spreadsheets. ( http://www.felienne.com/publications ) Her PhD dissertation on the subject "Analyzing and Visualizing Spreadsheets" ( http://www.felienne.com/archives/2534 ) is particularly detailed. Much though some people might think that spreadsheets are not for serious work, they're being used for that right now, and that is unlikely t…

What's interesting to me is that software spreadsheets are more or less just evolved version of what apparently VisiCalc got right on the first try. Sure software spreadsheets are basically just parroting the physical ledgers that came before them, but turning them into software almost immediately opened up a kind of dynamic that didn't exist before. The latest Excel is basically just an organically evolved VisiCalc. There really hasn't been a huge paradigm shift since then.

It's not clear that there should be either, spreadsheets work really well. Efforts to move them into databases or whatever be damned. A spreadsheet is != to a database table except maybe in the most abstract possible sense in some cases. They really are different things and I agree that issues with spreadsheets should be solved by improving the tools not trying to paradigm shift spreadsheet users into an inappropriate environment that also happens to have a very long and highly skilled environment setup requirement.

Re: You shouldn’t use a spreadsheet for important work

#102
post #32

JP Morgan's $6.2 billion "London Whale" trading loss: An unnamed overworked staffer in London copied and pasted the wrong figures into an Excel spreadsheet, throwing the firm's risk models out of whack. http://finance.fortune.cnn.com/2013/01/18/jpmorgan-london-wh... Spreadsheet errors are reaching epidemic proportions globally. What we need is a transnational organization to contain the threat with research, best pra…

I guess it's a good thing we don't have errors in software then, because that would totally eliminate these kinds of issues.

Oh wait, a user can enter a bad number in any tool, regardless of it being Excel or some custom cobbled together monstrosity that does less than the same work, but costs 100x as much.

Re: You shouldn’t use a spreadsheet for important work

#103
Although I agree with the author, using Piketty as the example seems counter to his argument: the FT found the errors in the spreadsheet in a few weeks. They were obviously not very difficult to find. Sounds like Piketty's problem was a lack of peer-review, not the tools he used.

Re: You shouldn’t use a spreadsheet for important work

#104
Bahaha. I know of multi-million complex international 3-party deals in the oil and gas business that were worked out on a spreadsheet. Insurance actuaries I know of refuse to move away from their spreadsheets that do business-critical risk table calculations.

It's idiocy, but I've seen the poor spreadsheet program warped into even worse uses, but not for business-critical stuff.

Re: You shouldn’t use a spreadsheet for important work

#105

Let me get this straight. It is hard to review, test and maintain code in Excel workbooks, so we should instead write custom software for these tasks?! Custom software is, to a non-hacker, the definition of "difficult to review, test, and maintain." You may as well suggest they input their data into a mystery box with some pixies inside who will crunch the numbers for them. :) Remember, Excel (and spreadsheets in gen…

> It is hard to review, test and maintain code in Excel workbooks, so we should instead write custom software for these tasks?!

Well, maybe before we attempt to send men with guns to further deprive people of their property and liberty (which is, of course, the end goal of Piketty's work and advocacy of a global wealth task) we should determine whether or not his results are, y'know, true?

I know, I know, truth is such an old-fashioned concept.

Re: You shouldn’t use a spreadsheet for important work

#106
post #80

I've worked for many large financial institutions as a quant and am intimately familiar with use of spreadsheets in critical functions. I believe this is a multi-billion dollar opportunity. If someone is interested in start-up ventures in this space, I would be very interested in discussing further.

How would you overcome the very large inertial barrier that exists in that world to using something new and untested? The world of finance and investment banking is a world of networking and extreme resistance to change. There's a reason Bloomberg's suite of products sits as pretty as it does, and unless some great upheaval occurs will continue to do so for many years (it's not because the products are easy to use, d…

> How would you overcome the very large inertial barrier that exists in that world to using something new and untested?

I've already successfully done this. The sales cycle can admittedly be long, but it's not impossible.

You have to create a product that addresses pain points for business users. It has to be a compelling product and it has to solve problems for business decision makers. Initially, you want to sell to the business, not to the IT department. It turns out that spreadsheets are mainly used by business users and subject matter experts, instead of IT.

The next issue is price. If you are trying to sell something for (say) $1 million to a big corporation, then it is quite a a long sales cycle (but still achievable). My personal take on this is you do want to eventually be charging several million dollars per corporate client, but you also should have a low cost "entry level" version of the product. The cost has to be low enough that a business power user could charge it to his Corporate American Express without being noticed (say $1,000) and download and install your application (he will need admin rights, which he might in fact have).

> The world of finance and investment banking is a world of networking and extreme resistance to change.

Yes there is a lot of networking that goes on. This can really work in your favor, because there is a sort of herd mentality. Once people start talking to each other about your product, customers will want to talk to you. If you close a large deal, news will quickly spread and other large deals can follow.

I would not agree that there is "extreme resistance to change." In my experience, banks, hedge funds, etc, are often early adopters and one of the largest users of high technology.

> There's a reason Bloomberg's suite of products sits as pretty as it does

I have Bloomberg in my cross-hairs, next to Excel.

> and unless some great upheaval occurs will continue to do so for many years

You are correct that change often requires a catalyst. But I think that great upheavals are happening everyday, but they are hidden behind closed doors, occurring deep inside of companies and departments. In my experience, it is precisely during those times of upheaval that you have the best chance of introducing a new, disruptive technology into an organization. There are many kinds of upheavals that happen. (mergers, divestitures, running into Excel's maximum row limit, etc) and they can all be catalysts for change.

I've put my email address in profile now, thanks for the tip.

Re: You shouldn’t use a spreadsheet for important work

#107
post #75

Earlier quoted context omitted.

> Much though some people might think that spreadsheets are not for serious work, they're being used for that right now, and that is unlikely to change. Better to figure out how to improve the tooling, rather than undertake the quixotic quest to get business people to abandon their perfectly viable programming tool. Its largely used by business people because they (1) have inadequate IT support to have things develop…

A lot of people who have access to Excel also have access to Access - and a lot of what they do would be better served in database than a spreadsheet. Yet they don't use one - there must be a reason for that, and I don't think it's IT restrictions.

This Rory Blyth cartoon has been ungoogleable for at least ten years now, but I still check every so often. Now here it is!

http://wyorock.com/excelasadatabase.htm

What I was going to say before unexpectedly finding that, is that the gap between Excel and Access is huge. I've made a living off of that gap at various points, and at some point I stopped thinking they were "doing it wrong" and started thinking, "whatever makes you happy."

Re: You shouldn’t use a spreadsheet for important work

#109
post #79
post #58

Earlier quoted context omitted.

Apparently the errors found were "transcription errors" not "programming errors." Using Excel or not then is irrelevant. Excel (and any other spreadsheet) is a nice and convenient tool to get easy tabular inputs and some results fast. Spreadsheets were one of the first useful programs on PCs.

With spreadsheets a lot of steps needlessly require human transcription (cut/paste, typing and so on). So there is a casual relation.

[deleted]

Re: You shouldn’t use a spreadsheet for important work

#110
post #79
post #58

Earlier quoted context omitted.

Apparently the errors found were "transcription errors" not "programming errors." Using Excel or not then is irrelevant. Excel (and any other spreadsheet) is a nice and convenient tool to get easy tabular inputs and some results fast. Spreadsheets were one of the first useful programs on PCs.

With spreadsheets a lot of steps needlessly require human transcription (cut/paste, typing and so on). So there is a casual relation.

Steps require "human transcription"? I think you've got a wrong term, and if you mistype the data you have on the paper when making a spreadsheet I don't see why you wouldn't when doing the same typing using your text editor.
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