Sunday, January 31, 2016

A managerial reason for opposing the use of spreadsheets

Here is a real world example of what can happen when spreadsheets are used,

My company is trying to determine how much money has been spent so far on a very large project. A clerk was given the job of classifying lines in the purchase orders stored in Priority so that we can see how much has been spent per class. Her report totals 1.25 million NIS.

We received a print-out of her results; someone had added by hand another 250 thousand NIS, thus supposedly increasing the amount to 1.5 million NIS. We have yet to receive an explanation for the extra amount. The project's manager sent in a complicated spreadsheet whose total expense appears to be 1.75 million NIS, and a third person's spreadsheet shows 2 million NIS.

Which of these results is to be believed? We have costs ranging from 1.25-2 million, where this latter figure is 60% greater than the first! What constitutes the extra 0.75 million, and why aren't those costs written in Priority? Presumably the suppliers will wish to be paid and they won't get paid without a bill in Priority.

One could say that management should be conservative, in which case we should take the highest estimate of costs. But there is such a difference between the values that it is hard to take them at face value.

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