November is the second month of Spring here in Australia - and over the weekend we had temperatures soaring to the mid-to high 30's (even over 40's at the hottest point point of the day Friday - this is degrees Celsius, about 100 degrees Fahrenheit). One cannot help but to want for a nice cold watermelon on a day like this. Watermelons are great way to keep cool during a hot day. It also works in boardrooms and senior management meetings - nothing like a green scorecard to keep the temperature at manageable levels during such meetings. How? Watermelon scorecards, of course! Such scorecards, just like a watermelon, are green on the outside, but once you open them up, peer a bit deeper in the data, they are as red as can be. How are they created? With spreadsheets, of course!
It's watermelon season all year round
Who are these "data manipulators" and "corporate evil-doers"? The short answer - almost everybody you give access to a spreadsheet. The long answer is more interesting - it has to do with how it happens, and why it happens in the first place. Whilst there may be some examples out there, usually the reason behind the watermelons are not as nefarious. The outcome, though, can have significant negative consequences. Take the following situation - disconnecting the fuel light an indicator in the car does not make it go further on a single tank of fuel - it just keeps you blissfully unaware of the imminent moment when your car refuses to bring you one more meter closer to your destination, until it is too late. You would not ignore our fuel indicator in your car like that, yet we do ignore the less than favourable data in our business more often than we admit.
Good news makes you look good
In many companies, especially larger ones, your success is determined by how you contribute to your manager's success. The larger the company, the further removed you can be from what actually matters. Think about it - if you are the director of your small business, you don't have anything to gain by ignoring the signs (either favourable or unfavourable). If you are five or six steps removed from a CEO, and the CEO reports into a board of directors representing the shareholders, it may be much more expedient to create an atmosphere of good news - good for your bonus, your manager's bonus, and ultimately the share price. Up to the point where reality will not be buried under complex formula's resulting in pretty graphs showing the "right" trend.
Good intentions don't guarantee accuracy
Of course - we are not so inclined. We have integrity, we report what is actually happening in the business and we use a spreadsheet to provide insight into the data. I would think that is mostly the case. Yet spreadsheet applications are very sophisticated, with Microsoft Excel as the king of the hill when it comes to spreadsheet functionality combined with ease of use. This is often a curse disguised as a blessing. It is relatively easy to conjour up a snazzy diagram displaying the trends from the data. Yet, with the added functionalities, it is also equally easy for the multi-sheeted formula's to get so complicated, that even the original author of the spreadsheet does not fully understand how the data is manipulated. When a small change in formula results in a completely unexpected outcome, it is evident that the knowledge on the integrity of the data manipulations is lost, probably forever - and the sheet really should be rebuilt from an earlier backup (or worse case, from scratch). This will take hours, or days - if you can fully remember the structure of the data manipulations in the first place. More likely, if the represented data looks to be "good enough", then such effort can be avoided. The problem is not the little inaccuracy - it is the compound of those little inaccuracies over time.
How to get your data out of spreadsheets
By evolution of use, Microsoft Excel has grown out to be the worlds best-selling business intelligence tool. If you have read the above, you'd probably be rightfully sceptical about the "intelligence" part of the term. However, it is totally understandable how Excel took this top-spot: transactional systems were great at capturing transactions, horrible at representing data in consumable form (a thousand page report where you are only interested in the bottom-line was a common complaint up to around one-and-a-half to two decades ago). Excel had its place, but since then, various better and more robust analytics suites emerged. The inertia to move away from Excel was partially caused by the high cost of the analytics suites, partially by the complexity to get these "up and running". And in some cases, a more cynical cause could be attributed: "the actual data simply does not look as good as the trends we get out of our Excel manipulations". The first two excuses for inertia have been effectively taken away, as business analytics suites have both become less (far less) expensive, and easier (much easier) to configure.
Are you still relying on Excel to analyse your data? There is only one excuse left, and nobody can afford that for a prolonged time - talk to us now how we can get your data out of spreadsheets and into analytics.