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Back in the Day…

January 6, 2012

Here is a story of what people used to do with Excel, back in the day… (here’s the full article)

Forgive me if I now divert into telling you a quick story about my time spent on the Microsoft Excel team way back in 1991. (Yes, I know you were not born yet, but I assure you that computers had been invented. Just hop up here on my knee and shut up.) 

Everybody thought of Excel as a financial modeling application. It was used for creating calculation models with formulas and stuff. You would put in your assumptions and then calculate things like “if interest rates go up by 0.00001% next year, what percentage of Las Vegas homeowners will plunge into bankruptcy?” For example.

Round about 1993 a couple of us went on customer visits to see how people were using Excel.

We found a fellow whose entire job consisted of maintaining the “number of injuries this week” spreadsheet for a large, highly-regulated utility.

Once a week, he opened an Excel spreadsheet which listed ten facilities, containing the name of the facilities and the number 0, which indicated that were 0 injuries that week. (They never had injuries).

He typed the current date in the top of the spreadsheet, printed a copy, put it in a three-ring binder, and that was pretty much his whole, entire job. It was kind of sad. He took two lunch breaks a day. I would too, if that was my whole job.

Over the next two weeks we visited dozens of Excel customers, and did not see anyone using Excel to actually perform what you would call “calculations.” Almost all of them were using Excel because it was a convenient way to create a table.

It’s now twenty years later, and spreadsheets are a ubiquitous tool in our daily work, and they seem to breed and grow ever more complex all on their own.  Yet we still treat them as if we’re just creating simple tables – no programming protocol, hardly any checks and balances, and very little standardization.  The spreadsheets we create today are enormously more sophisticated, complex and critical to core finance processes, so we must treat them with more rigor as well.

I presented a research paper on this last year in the UK.  I’ll be honest, it’s a little dry.  Probably better to watch this short video instead.

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