This won’t be the first or last blog post on the internet about the dangers of large spreadsheets!
It is inspired by a recent Prophecy implementation where the customer, like many Prophecy customers, is migrating from a spreadsheet-based system that had grown over the years and now suffered many of the (not unusual) issues of complex spreadsheets:
- The original developer was long gone.
- It did not support multiple concurrent forecasters. (All customers were forecasted in a single spreadsheet, avoiding the need for multiple linked spreadsheets but preventing multi-user access.)
- There appeared to be design errors which lead to incorrect financial forecasts
- It contained no sales history, other than year to date.
- It was cumbersome to navigate and locate items quickly.
There are, of course, many additional shortcomings associated with using Excel spreadsheets for sales forecasting and they are documented on our main site at https://www.dataperceptions.co.uk/spreadsheets.html.
A recent discovery, for me at least, is research and data on the incidence of serious errors (i.e. errors that affect key numbers) in corporate spreadsheets.
The bottom line from this research is that more than 90% of corporate spreadsheets contain serious errors. Yes, 90%. Ray Panko is a Professor of IT Management and has curated the results of numerous studies on corporate spreadsheet errors on his website at http://panko.com/ssr/Audits.html. If you doubt the claim about 90% errors, please do hop over to his site and see for yourself!
So, the point of this post is really to say that there is a high probability (90%!) that relying on spreadsheets for sales forecasting imposes hidden costs on your organisation through formula and other errors. As well as the limitations of spreadsheets in the 10% or so that are actually error free.
That’s why a purpose-built, proven solution like Prophecy™ has to be the right way to go. If it does nothing else, it avoids the high probability of spreadsheet errors, as well as opening up a raft of serious, forecaster-specific features that will help your forecasters develop better, more defensible sales forecasts, in less time.