A Love Hate Relationship with Spreadsheets

Date: June 26, 2013

Another article was published recently about the proliferation of spreadsheet errors and the impact that has had on the validity of data analysis done through the use of spreadsheets.

This got me thinking about the spreadsheet problem in the investment fund industry, specifically in the realm of expense processing.  When I started in the industry in 1995, investment company administrators used spreadsheets for just about everything.  While most of the repetitive tasks have been automated since then, processing payments, preparing budgets, calculating and tracking expense ratios, and compiling payment related tax information are all still manual.  Given the many issues with spreadsheets, why haven’t these spreadsheets been replaced as well?

It isn’t due to a lack of urgency or lack of information about spreadsheet risk.  The issues encountered when using spreadsheets for repetitive, enterprise level, business critical functions are many and extremely well documented – errors and their financial consequences, lack of scale, lack of standards, lack of value-add analysis and reporting, and pressure exerted by regulators.  People are dying to get rid of their spreadsheets, but no one has come up with a decent automated solution.

The lag in automating expense processing is due to a tricky combination of complexity, variability, and, for all intents and purposes, a total lack of standards.  To automate this type of process, you need frequent market feedback, flexibility in your development plan, lots of real world interaction with your software, and cutting edge software development techniques available today that were not available years ago.

Working on Confluence’s Unity NXT™ Expense Processing project has been one of the most challenging, most exciting, and most gratifying experiences in my professional career, partly because we have been leveraging a bunch of cool, cutting edge design and development methods like Agile and Human Centered Design, and partly because these tools have allowed us to do something that no one has been able to do.

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