Spreadsheets are ubiquitous, heavily relied on by organizations to manage data and make critical business decisions. Spreadsheets are an excellent tool for independent analysis. The problem is that they are often stretched far beyond their home territory. Furthermore, spreadsheets tend to have limited scalability beyond the desk and the fidelity is constrained by the organization’s ability to invest in additional technology capability to manage its reliability.
It’s imperative to note that the goal of inputting data in a spreadsheet is not to get an answer, but to get the correct answer. Often a wrong answer is much worse than no answer at all. There are a number of features of spreadsheets that present a challenge to error-free analysis. It is extremely common for data to be added to a spreadsheet after it has been created. The augmentation of data can go wrong, rendering a correct spreadsheet incorrect. Even the most experienced practitioners, using all the armory at their disposal to prevent mistakes from creeping in as they work, will make common errors from time to time. The requirement in organizations to work under huge pressure to achieve deadlines makes the probability of error even higher. Some of these errors will be caught by the fail-safe mechanisms built in. But some will not.
Additionally, many spreadsheets take all night to compute. These computations can be complicated and commonly fail. However, when such spreadsheets are replaced by capabilities more suited to the task, it is not unusual for the computation time to be cut to a few minutes and the process much easier to understand.
Why Do Organizations Continue to Use spreadsheets?
The technology acceptance model holds that there are two main factors that determine the adoption of a technology: the perceived usefulness and the perceived ease-of-use. Perception need not correspond to reality. The perception of the ease-of-use of spreadsheets is to some extent an illusion. It is easy to get an answer from a spreadsheet, however, it is not necessarily easy to get the right answer. Thus the distorted view. The difficulty of using alternatives to spreadsheets is overestimated by many people. Safety features can give the appearance of difficulty when in fact these are an aid.
The hard way looks easy, and the easy way looks hard.
When Do Spreadsheets Go Wrong?
In a recent survey conducted by Daptiv, it was revealed that 76 percent of IT organizations still rely on spreadsheets for critical decision-making purposes. Spreadsheets are good when small amount of data needs to be managed. However, the "spreadsheet as database" is not always easy to maintain. At some point of enterprises will need specialized application capability to manage their database for managerial purposes. Research, such as that reported by Raymond Panko in "What We Know About Spreadsheet Errors", has found that most of the spreadsheets used by organizations contain errors—and that a considerable number of those errors are serious. In one case reported in Panko's research, the error would have caused a discrepancy of more than a billion dollars! Finally, academics have published studies of the prevalence of spreadsheet error and have sought to identify circumstances dangerous in the context of error and other circumstances that are regarded as safer. Therefore, unless spreadsheets are being used for single functionality, it must not be overburdened with complex calculations and codes.
One of the most widely used tools for project management in software teams today is the spreadsheet. Although fairly cheap and easy to use, spreadsheets are extremely vulnerable to errors. They hide problems that can hinder the success and create more costs than one has planned for. Here are some of spreadsheets’ inherent limitations:
To be fair, spreadsheets aren't the only models that contain errors. We all know that software has its fair share of bugs. But the sheer number of spreadsheets, coupled with "homespun" development, and the difficult of reviewing their logic, makes spreadsheet development the Wild West of the modeling community. If you are using spreadsheets for anything more than individual prototyping in your organization, I would recommend you to seriously consider replacing them with models that are more suitable.
Expanding beyond team/social collaboration to business collaboration
The term “collaboration” has become one of the primary hot topics for businesses and analysts throughout the industry lately. At its most basic level, “collaboration” simply means “working with others in a coordinated fashion toward a common goal.” But few actually attempt to define what it really means in the context of business and PPM.
If you ask most people what capabilities define collaboration in the workplace, they generally talk about the sharing of information within a given team: document management, threaded discussions, activity feeds, instant messaging, shared calendars, task assignments, facilitation of problem solving and idea development, communication of decisions and meeting minutes, etc. This is all good, and certainly helps a team move forward in coordinated fashion toward the common goal of completing a project or specific unit of work. Nearly all PPM solutions provide functionality to address each of these needs within the scope of a project. SaaS PPM solutions are particularly well-suited to providing this level of team collaboration since, by their very nature, they are accessible to all team members regardless of geographic diversity and the information they contain is always available in near real-time.
I would argue, however, that this limited view of collaboration is incomplete. Looked at from a broader perspective, an entire organization can be viewed as a collection of units which must all work together in a coordinated fashion toward the common goal of alignment and execution against the business’ corporate vision and strategic objectives. Thus, business-level collaboration is necessary to establish the direction for an entire organization. “Business Direction” includes the definition for the organization’s Vision, Goals and Strategies. By sharing and collaborating on the Business Direction, the business teams will be better prepared to drive the various work efforts. True business-level collaboration therefore depends on the free flow of information between the project teams and the outside world – management, other departments, executives, stakeholders, etc. – to facilitate proper alignment and effective decision-making throughout the entire organization. It is this level of “business collaboration”, as opposed to individual “team collaboration”, which is often missing from a company’s collaboration strategy. All too often, anyone not on the core project team is actually excluded from access to the system of record for project performance and must therefore depend upon periodic status updates or word-of-mouth communications to understand, participate, or make critical business decisions on project information.
Business collaboration provides a level of transparency and visibility to project details throughout an organization. At its heart, business collaboration makes heavy use of enhanced dashboarding and powerful reporting capabilities to expose appropriate project information to those who are outside the core project team. Ideally, facilitation of business collaboration also provides processes and methods for these external resources to submit inquiries and participate in discussions, access project documentation, and all of the other traditional collaboration capabilities as well.
When examining the collaboration strategy within your organization, be sure to keep the big picture in mind. Team-level collaboration is certainly important. But enabling collaboration across departments and across levels within a larger organization can often be even more critical to the success of the entire business.