Excel for decision making. What could possibly go wrong? 0

Posted on 24, May 2013

in Category bsg insight

by Stuart Gomersall, owner of our Distributed Development service.

In mid-April 2013, I engaged in some twitter banter with two other keen community observers - Joanne Jacobs (@joannejacobs) and John Machtynger (@synapcity) - on a not-so trivial topic: data versus people and where we place our trust. Basically - what do we trust more?

Excel for decision making. What could possibly go wrong?/bsg insight

Over the past few months, there has been a lot of news about Excel and the business decisions it helps support or hinder. The main story centres around the academic research of Reinhardt and Rogoff (ref: BBC), as well as the JPMorgan trading calculation faux pas (ref: Zero Hedge). In a sales meeting, I once flippantly mentioned that any company that uses Excel to make any serious business decisions is a potential customer. I may have inadvertently been right.


Simply put, the non-validated use of Excel derived data-points and the blind reliance of the output is both alarming and dangerous.


It is evident that in many places Excel is being used as a ‘business system’ that provides complex calculations on reams of manually entered data and supports decision making via information distillation and reporting. The potential for disaster, either at a business, or in the Reinhardt & Rogoff case, societal level, cannot be overlooked.

As part of my current studies (M.Sc in Information Security), we've been using the CIADA framework to consider the robustness of a system. I felt that the CIADA framework was an interesting lens through which to view the problem. CIADA stands for:
 Confidentiality – concerns the unwanted disclosure of information
 Integrity – concerns the unwanted modification of information
 Accountability – concerns the unwanted withholding of information
 Dependability – concerns the predictability of information
 Accuracy – concerns the deniability of actions on the information

Over the coming months, I plan to author a series of posts considering each of the properties in turn to build a detailed view of the wisdom, or otherwise, regarding the use of Excel as a business system.