RWCG


The anti-spreadsheet jihad continues
February 10, 2013, 8:26 am
Filed under: Uncategorized

I’ve LOL’ed before at the idea of blaming the financial crisis on too much reliance on Excel, but James Kwak does have some balanced and intelligent thoughts about it, and its problems, here.

It still has always seemed to me that to focus on the Use Of Spreadsheets is to go for the capillary when it comes to financial-sector leverage, ‘innovation’ and bubble-blowing. It’s a symptom rather than a cause, and it’s a tool for shenanigans, perhaps an enabling one – but it’s just not the shenanigans themselves. Moreover, as Kwak points out, you can never really get rid of spreadsheets:

For all the talk about end-to-end financial suites like SAP, Oracle, and Peoplesoft, at the end of the day people do financial analysis by extracting data from those back-end systems and shoving it around in Excel spreadsheets.

Exactly. Imagine the most perfect Secure Spreadsheet Replacement, and now imagine every single user on a day to day basis mostly using it to scrape numbers out of it so that they can actually play with the numbers.

In a spreadsheet.


5 Comments so far
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blaming spreadsheets for their user’s errors is like blaming the rope when a guy hangs himself…

Comment by Kid Dynamite

Well, there are fair points to be made (as Kwak does) about how their errors will only be caught asymetrically, i.e. only when those errors were to the bank’s disadvantage. But that’s not only true of ‘spreadsheets’, it’s true of underlying models and calculations wherever they’re performed.

More to the point, the anti-spreadsheet crusade in practice mostly seems to lead to a wasteful cul-de-sac, throwing resources at the myopic cause of Reducing The Number Of Spreadsheets.

Comment by The Crimson Reach

http://www.anaplan.com might be an interesting middle-ground. You get the flexibility to ‘play’ (and in a spreadsheet paradigm) while keeping the central control (security) and transparency (visibility into the formulae) that organizations say they want.

Comment by Ron Dimon (@rondimon)

Interesting thanks. i had not heard of that.

Comment by The Crimson Reach

[...] A lot of people have expressed surprise if not utter shock that a key risk metric at JP Morgan that (maybe? maybe not?) would have/could have/should have reined in the ‘London Whale’, but had an error in it, was being calculated on a spreadsheet. There is absolutely nothing about that incident that I found less surprising. I stand by these comments on the anti-spreadsheet jihad here. [...]

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