Spreadsheets are used every day in most businesses.
Take a look at these five news-worthy tales of how spreadsheet errors can cost companies both money and reputation. You might be amazed at how many big decisions are based on the belief that spreadsheets are foolproof.
1. Formatting Errors
MI5 asked for information on the wrong phone numbers due to a spreadsheet formatting error. All of the phone numbers had had the last three numbers changed to ‘000’.
2. Data Entry Errors
Spreadsheet entries don’t seem to be checked too thoroughly, as happened at the London 2012 Olympic Games, where twice the number of tickets were sold as were available for a synchronised swimming event. Someone typed in 20, 000 rather than 10, 000 as the total number of available tickets, so people just kept on selling them!
3. Layers of complexity hiding audit trail
In 2012, the UK Department for Transport West Coast franchising process ended in disarray after spreadsheet modelling was found to be fundamentally flawed. Bidders Virgin Trains suspected something was afoot and lodged a complaint. They realised that the figures weren’t adding up and looked into it further. Again it was our old friend the spreadsheet error leaving chaos in its wake.
4. Using the Wrong Version
Britain’s second largest drug manufacturer Astra Zeneca inadvertently distributed a version of a spreadsheet with confidential company information embedded in its template. The file was sent to external analysts in a “routine consensus collection process”. It was further bad news for the embattled Anglo-Swedish pharmaceutical firm which is struggling to keep pace with its peers.
5. Incorrect Formulas
JP Morgan Chase were showing incorrect VaR (Value at Risk) numbers due to a rookie Excel error in a formula. Rather than using the average of two numbers, the user had used the sum, so the resulting figures were way out. They were automatically reporting these figures and the error was not picked up until quite a bit further down the line.
How to avoid spreadsheet errors?
The first step is to recognise when to use a spreadsheet and when not to…
A good rule-of-thumb is to ask yourself:
How often am I going to do this calculation, report, task?
If it is a one-off, then use a spreadsheet.
If you are going to do it repeatedly, then get a custom database.
Luckily for you we can make your custom database here at Working Data. Contact us today.