{"id":15130,"date":"2021-07-02T12:29:37","date_gmt":"2021-07-02T04:29:37","guid":{"rendered":"https:\/\/psglobalconsulting.com\/blog-my\/spreadsheets-its-allure-its-flaws-and-why-it-is-time-to-ditch-it\/"},"modified":"2024-01-08T09:59:15","modified_gmt":"2024-01-08T01:59:15","slug":"spreadsheets-its-allure-its-flaws-and-why-it-is-time-to-ditch-it","status":"publish","type":"post","link":"https:\/\/psglobalconsulting.com\/my\/blog\/spreadsheets-its-allure-its-flaws-and-why-it-is-time-to-ditch-it","title":{"rendered":"Spreadsheets, its allure, its flaws, and why it is time to ditch it"},"content":{"rendered":"\n

The enduring longevity of spreadsheets is incredibly fascinating when you consider that it has been in existence for more than 700 years. Yes, many of us associate spreadsheets primarily with Microsoft\u2019s Excel software. However, the first<\/a> form of bookkeeping for growing businesses was designed by the Italian textile businessman Marco Datini. Datini did it on sheets of paper! <\/p>\n\n\n\n

It was another century before a mathematician, Luca Pacioli<\/a> refined Datini\u2019s invention and introduced the double-entry method in 1494. It would take another 500 years before Dan Bricklin<\/a>, a student at the Harvard Business School, designed the first iteration of spreadsheets as we know it today, in 1978. Bricklin\u2019s VisiCalc was subsequently upstaged by Lotus 1-2-3 and then Microsoft Excel. <\/p>\n\n\n\n

It is easy to see why this piece of invention is ubiquitous. For accountants, this tool was a godsend. It helps them collect and organise data. The columns and rows allow for information to be neatly placed, and the \u201csorted by\u201d function allows you to easily find what you are looking for. Spreadsheets help accountants, and financial officers of companies do the math, requiring them only to write the formula. <\/p>\n\n\n\n

These functionalities ensured spreadsheets became a mainstay in all business organisations. Such is the amount of importance businesses place in spreadsheets that it has stood the test of time and the onslaught of the digital age to retain its place in finance departments. <\/p>\n\n\n\n

However, as businesses grow, the limitations of spreadsheets have become more and more apparent. The flaws of using spreadsheets have also been exposed by an increasingly disruptive and competitive business environment. <\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

The lion\u2019s share of a financial officer\u2019s time is often taken up for manual entry of data. The resources of financial officers are much better spent focusing on making strategic decisions based on sophisticated presentation of data, rather than having to spend painstaking hours keying in numbers meticulously. This is also a process that is often riddled with human errors. In addition to this, spreadsheets\u2019 limited ability to manipulate data is one critical area that hinders progress. <\/p>\n\n\n\n

A study by computer scientist Felienne Hermans<\/a> on the collapse of Enron in 2001 based on tranches of email with spreadsheets attached made some startling discoveries. Out of nearly 15,000 Excel files with data on them, a quarter had at least one error such as missing circular references and other finance-related errors. Below are some of the information uncovered by Hermans:<\/p>\n\n\n\n