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Five Costs and Perils of Spreadsheets for Business Analytics:

Avoiding Errors and Costly Mistakes

Managing Performance and Spreadsheets

Managing performance effectively requires that a company be able to provide executives, managers and employees with accurate, timely information and make it possible for them to work interactively with that information – to see the numbers behind the numbers. Our research repeatedly confirms that spreadsheets remain the dominant method companies use for analysis and reporting. For example, our Business Planning benchmark research found that 70 percent of organizations use them as their preferred technology supporting a broad range of planning processes. Yet spreadsheets are challenged when it comes to accuracy and timeliness because they lack the dimensionality and interactive capabilities necessary for effective business analysis. Spreadsheets also pose risks in governance and control.

It’s obvious that accuracy is important; decisions based on inaccurate information can have material financial consequences. In this respect, spreadsheets pose ongoing risks. Because they are notoriously error-prone, spreadsheets are a poor choice for the sort of repetitive enterprise reporting and analysis companies routinely do. To ensure that their spreadsheets are accurate, organizations must spend time reviewing and revising them, which delays their availability. Nearly half of organi-zations (47%) in our benchmark research on business intelligence (BI) and performance management said such errors must be cor-rected often or very often after the spread-sheet has been shared with others. Spread-sheets also have limited dimensionality, which makes it more difficult than it should be to examine results from multiple perspectives. Moreover, stand-alone spreadsheets (as opposed to server-based spreadsheet software) are limited in their ability to enable users to work interactively with the reports. It is far too difficult to drill into the numbers be-hind the performance issues to better understand what’s driving results.



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