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Cost of Spreadsheet Errors!

So you did the calculations, got the formulas right, drafted the reports with the required charts. Now you’re just about to hit the SEND button of the email that contains your excel masterpiece with enough data to your boss for him/her to make a vital decision. What if there’s still a high chance for an error to exist in the sheet that could cost your company a whole lot of fortune?

No one gets the pressure right like this Artwork by MailChimp!

As for Ray Panko, close to 90% of spreadsheet documents contain errors, a 2008 analysis of multiple studies suggests. “Spreadsheets, even after careful development, contain errors in 1% or more of all formula cells and a majority of errors reported were caused by human error— which could have been completely avoidable.

Ok, let me give you some of the expensive excel errors made in real life. A simple copy and paste error for a new value at risk model costs JP Morgan Chase more than $6 Billion, that like the cost of building 4 Burj Khalifas. Due to a cut and paste and lack of a proper review, TransAlta suffered a loss of $24 million (you could own  7 McLaren P1 LM FYI). The list could be going on as there is a number of scenarios and examples where errors in spreadsheets have cost people huge losses. So it’s a safe bet that your excel sheet would undoubtedly have enough errors that your eyes would have definitely missed.

Now that we have entered into the age of Big Data, where and more and more companies are realizing the value of data and how it affects their business overall. It’s also evident that companies are still using an outdated tool in order to analyze and visually communicate their data,’spreadsheets’. Given their track record and proven drawbacks it is advisable for one to avoid using spreadsheets when it comes to analyzing data. Well, the spreadsheet is undoubtedly a champion in the field of software, however, is it not necessarily a “statistical software” as it is not designed for such a use.

Unlike recording accounting transactions, sales, budgeting etc. Analysing data via spreadsheets has a number of drawbacks and limitations such as,

Not getting the complete picture

As most of the data are uncategorized (raw), it’s difficult to interpret what’s important and what’s not, it’s hard to see the forest for the trees. The whole purpose of analyzing data is wasted if your team finds it hard to identify the messages or see how the data relates to their day job.

Complexity

Unless your an excel expert or someone who’s quite familiar with it, especially top management, spreadsheets can be difficult to analyze. Even worse, is that not everyone could identify the errors in a complex formula, making the decision makers life much harder which also leads to making poor shots or take wrong actions based on that misinterpretation.

A chance of losing historical data 

Spreadsheets aren’t designed to store historical data, so often, in an attempt to keep the size of them manageable, they are “updated” and companies lose their historical data. This makes it hard or impossible to spot trends over time and compare data across longer time horizons.

Collaborate 

On the other hand, there’s always a high possibility of data being accidentally deleted or altered, the spreadsheet that is shared is rarely “live” or real-time.

Given above are few scenarios those are common to any excel user, there might be much worse problems for users who are using Excel extensively to data analyzing purposes often. Well, if you’re really serious about data analytics, there are few tools that are recommendable for data analysis such as

Pentaho –  A BI software that provides data integration, OLAP services, reporting, information dashboards, data mining and extract etc. Only go for it if you have in-house development capabilities since setting up is quite complicated and if you require heavy analytics and high-end data science requirements.

Domo– Another enterprise BI software that provides data related services that’s highly recommended, yet this also requires heavy deployment requirements across multiple divisions and also large-scale data usage.

Or you could also use

Zepto, an AI integrated data analytics tool designed from a user-centric point, in other words, a simple tool that could be used by anyone on the go. You could give your data a shot with Zepto for free, go ahead just give it a try.

Whether you like it or not, data is and will be playing a vital role in running any business in the future. Since an average person produces enough data a day thanks to the internet, getting held to a data analytics tool is a billion dollar advice that’s offered to by us for free.