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Summary
Ventana Research recently completed extensive benchmarking research on the corporate use of spreadsheets. One striking finding is the degree to which spreadsheet users have become numb to the problems the software creates for them and the extent to which using spreadsheets hinders their efficiency. Half of the research participants said the time they spend addressing problems with spreadsheets is noticeable, but two-thirds of these said the problems have minimal impact on their productivity. (Perhaps they think that part of their job is debugging spreadsheets.) We believe that one of the biggest barriers to addressing spreadsheet shortcomings is people’s acceptance of them as an inevitable cost of doing business. For most, living with the pain spreadsheets cause seems the only practical solution. Today, though, there are a range of practical alternatives available to increase productivity in using these tools. A main one is what we refer to as spreadsheet discovery, management and control (DMC).

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This is the spreadsheet paradox: When used properly they enhance productivity, but when they are used inappropriately (usually for repetitive and collaborative enterprise-wide functions) they reduce productivity. Companies have lived with this duality for years. Now they don’t have to. Spreadsheet DMC software automates the process of keeping tabs on important spreadsheets, checking them for errors and controlling their use. These tools make it possible to reduce the productivity drag without compelling people to change the ways they work.

Our benchmarking research, sponsored by Actuate and Compassoft and media partners BI Review, DM Review and Intelligent Enterprise, confirms that people use spreadsheets in all facets of business, often extensively. They like spreadsheets because they think they are easy to use and cost nothing. But in fact there are many hidden costs in lost productivity and increased business risk. Half of users routinely find data and formula errors in their most important spreadsheets, probably because most normally “eyeball” results and only check specific cells when something looks wrong. Multiple conflicting versions of the same spreadsheet is a common situation, as is finding out-of-date information in them. Combining and verifying multiple spreadsheets is a necessary but arduous task for almost all users, regardless of their level of experience. 

Dealing with errors in spreadsheets takes up what otherwise could be productive time, which is why people are more concerned with the timeliness of the spreadsheet reports they receive than with their accuracy. When there are multiple contributors to a spreadsheet, fixing mistakes can take even longer. Nearly half of participants said that resolving issues about spreadsheets stretches out the time it takes to complete business processes.

Yet despite these shortcomings, users overwhelmingly embrace them as a tool and do not want to give them up. Most of our research participants have been using them for a decade or more. Whatever the difficulties they may pose, most people feel comfortable using spreadsheets. They are fast and flexible. Mistakes happen, but usually the consequences are not dire. These factors appear to cause people to overlook the cumulative negative impact on company performance. Even though most users have grown inured to frittering away hours checking spreadsheets, Ventana Research advises executives to expose this as a hidden drag on the productivity of their company.

Moreover, spreadsheet use carries a more serious risk than wasting time. Over the past several years, larger publicly held companies in the United States have come to grips with the risks posed by spreadsheets because they need to control any that come within the scope of a Sarbanes-Oxley section 404 audit. By now, most manage very tightly access to and use of these spreadsheets, but this policy addresses only part of the problem. Spreadsheet users record, manage and analyze important processes that can have a negative impact on a company’s bottom line or propel its name into the news for undesirable reasons. As mentioned already, our research shows that spreadsheets are used extensively throughout corporations – not just in finance departments – to manage almost all critical business processes.

Assessment
All companies with 1,000 or more employees (and all but the smallest companies in heavily regulated business such as financial services and pharmaceuticals) ought to use spreadsheet discovery, management and control software. These applications automate the process of spotting and reducing errors in spreadsheets and can enable companies to control more easily exactly who can access individual cells or entire spreadsheets. In the end, companies can have more accurate and controllable spreadsheets without making people change how they do their jobs.