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What business needs to know about spreadsheets

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18th Nov 2015
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Last year the ICAEW launched its twenty principles for good spreadsheet practice guide. Looking back over the principle’s first year, Simon Hurst, one of the architects of the spreadsheet guide, spoke to AccountingWEB about its impact and how more needs to be done to increase small businesses of good spreadsheet practice.     

ICAEW CEO Michael Izza reasoned in the guide’s preface why good spreadsheet use is a requirement, writing: “Material errors such as incorrect models, sending out sheets with hidden columns or careless use of formulae, have been well publicised alongside the embarrassment and financial loss that arise as a result.”

Hurst echoed Izza’s concern regarding incorrect spreadsheet ramifications, and main objective behind the principles was the hope that they might help save businesses billions of pounds worth of time and effort wasted through inappropriate usage. Looking back since the guide launched, Hurst is happy that the awareness is spreading but recognises that more still needs to be done.

“There’s probably more of a job to do in getting small businesses to think more deeply about how they use spreadsheets,” Hurst said.

Hurst advocates accountants spread the word to small businesses about the importance of the guide’s teachings. “The institute could make their members in practice as aware as possible of the existence of the principles and their benefits, and that would filter through to an enormous number of businesses,” he said.

Hurst blames some businesses inefficient spreadsheet use on a dismissive attitude towards the tool, treating spreadsheets as any other office tool like Word or PowerPoint. “I think that’s wrong for all the office applications,” Hurst said.  “Just because it’s part of something that costs very little and often comes with the computer, some assume that there’s no need to know how to use it properly.”

“People could save themselves an enormous amount time just by being better trained and more knowledgeable about how products work.”

An effective way for the guide’s teachings to sift into the small businesses’ consciousness would be through government promotion within their small business programmes. But Hurst hasn’t seen any motion from the government. On the launch of the 20 principles, Hurst visited Francis Maude, the then minister for the cabinet office, but, as far as he is aware, nothing has been done in terms of government use of the principles or the government extolling the importance of the principles' lessons.  

Although Hurst didn’t discover the courses he delivers were diametrically opposed to the principles, the guide has been a useful reference for the spreadsheet expert. “Having the principles there in black and white does prompt me to remind people when they do use certain techniques they have to be used with more care than others,” he said.

While the twenty principles are still as relevant today as they were on their launch last year, Hurst predicts that in the near future some of the principles may be affected by the way Excel is changing to more of a hybrid database application.

“Having Get & Transform right in the heart of Excel may mean certain principles, particularly those involving storing and manipulating data, could change in the future as people stop using traditional cell based functions and start using the hybrid database tools,” Hurst explained.

Although Hurst is pleased with the guide’s progress, especially having the influential weight of the ICAEW behind the document, he thinks there’s much more to be done. “It’s still in the early stages now but there’s much more chance of raising awareness with the institute behind it with their ability to influence businesses of all sizes through practice as well as directly through members on company boards,” he said.   

The full Twenty principles for good spreadsheet practice guide can be downloaded from the IT Faculty website.

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Replies (6)

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By listerramjet
19th Nov 2015 10:32

still have concerns about this
But if the.challenge is education then surely the best place is in schools.perhaps as part of ks3 maths. Sounds like ICAEW is banging wrong drum here.

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Simon Hurst
By Simon Hurst
19th Nov 2015 11:12

Right drum, could be louder

Unsurprisingly, I think the ICAEW is banging exactly the right drum, albeit not loudly enough and perhaps 15 years too late. I have been working with accountants and Excel for about 25 years. I remain convinced of three things: the use of spreadsheets in business is close to ubiquitous; appropriate use of spreadsheets in a business environment is not adequately taught at any stage in the current education process - from school to professional qualification, and that businesses of all sizes waste vast amounts of time and effort through poor application of spreadsheet technology. Admittedly, I have little research evidence for the latter assumption and would dearly love such research to be conducted or for someone to point me towards any that does exist.

The 20 Principles were designed to provide practical and straightforward guidance on how to make better use of spreadsheets. For me, it is absolutely the role of a professional organisation to help its members work more proficiently and efficiently. In addition, there is a definite public interest aspect to such a project. From the smallest business to the largest government department I am convinced that better spreadsheet knowledge would make a positive contribution to efficiency and a reduction in errors and time wasted on troubleshooting and remedial work.

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By listerramjet
19th Nov 2015 11:32

yes but
Thought the comment on how excel is changing and impact on these principles was most interesting. Which makes part of my point. The world moves on and you can't change old habits. Get them young is surely the answer.

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Simon Hurst
By Simon Hurst
19th Nov 2015 11:40

I agree entirely

I would agree entirely with the 'get them young' suggestion but this is something that is probably not in the immediate capability of ICAEW or any of the professional organisations, and would take some time to filter through to making a real difference in business. In the meantime, it's better to do what can be done and hopefully, in so doing, create a level of awareness that might in the future lead to the realisation of the need to consider the issue at a much earlier stage of the education process.

The principles were deliberately made fairly general to allow them to be applied to a rapidly changing Excel and business environment but were also designed to be the beginning of an evolutionary process rather than a one time pronouncement.

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By edhy
20th Nov 2015 10:38

Basic use vs. Expertise

What you can teach in schools is basic use of a tool, to reach to an expert level one has to use the tool in real world. I have seen countless messy worksheets, many people simply do not have awareness or appreciation of Excel's potential.

We have to keep in mind that Excel is also used by people other than Accountants, ICAEW and other professional bodies should strive to increase accountants' Excel expertise.

One important point to note is that expertise in use of tools is one thing, getting the design right is another thing.There is difference between a painted shop board and a Dali or Picasso. The guide is good step in correct direction.

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Chris Challis
By challisc
10th Mar 2016 14:38

Wasting vast amounts of time

Simon says "businesses of all sizes waste vast amounts of time and effort through poor application of spreadsheet technology. Admittedly, I have little research evidence for the latter assumption..." .

He is nonetheless absolutely right. Excel is regularly blamed for material errors, be it a school's budget (as reported in another AWeb articles) or errors in MNCs.that hit the headlines. Of course, most problems never get publicised.

Significant time is wasted trying to minimise and eliminate errors. A big issue is the difficulty of checking one's own work.

Excel is great for ad hoc analysis. For other purposes the question has to be whether another type of software tool would be more appropriate.

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