But while spreadsheet errors can certainly cause monumental problems -- Kugel pointed to J. Morgan's .2 billion trading losses that resulted from errors in spreadsheets used for analysis -- he acknowledged that most are fairly innocuous.
However, that can cause users to take a lax attitude toward errors, which can be dangerous.
According to Ventana research, nearly half of enterprise-sized companies have experienced this problem -- 44% of survey respondents said they grapple with multiple, inconsistent spreadsheets.
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Davis INTRODUCTION In response to the September 11 terrorist attacks on the World Trade Center and the Pentagon, President George W.
Although using Excel often saves time up front because people are familiar with the program and therefore do not need to be trained, Kugel said using spreadsheets for finance processes is incredibly time-consuming in the long run.
Survey respondents said they spent approximately 12 hours each month "consolidating, modifying and correcting the spreadsheets they collaborate on with others and reuse frequently," which Kugel said equals about one and a half business days. Kugel said the majority of time users spend with spreadsheets isn't for doing complex work -- they're simply trying to find and correct errors, another weakness of the tool.
At the end of the webinar, Jennifer Jenkins, controller at Allen, Texas-based wireless services and software company Nexius, explained that her organization moved away from Quick Books and Excel after experiencing significant growth.
At one point, the finance department was generating 500 spreadsheets per month, which unsurprisingly led to errors and dueling versions.
"[But] the downside is it's just this thing that drives parallel data stores with inconsistent and inaccurate data." Kugel stressed that financial data needs to be controlled in order to remain accurate.
He recommended finance leaders establish a single, protected financial data source, which often means lessening dependence on spreadsheets in favor of dedicated financial management software.
This problem occurs because spreadsheets aren't bound to a single, unified source, he said.
Even if the original data is downloaded from the same place, such as an enterprise resource planning system, collecting it at different times can result in mismatched spreadsheets.
In a webinar titled Avoiding Five Spreadsheet Pitfalls, presented by Ventana Research and Financial Force.com, Kugel sought to inform attendees of the dangers of spreadsheets by listing the top five problems that arise when finance departments rely heavily on Excel, while acknowledging that spreadsheets will never -- and should never -- be abolished entirely.