This Halloween, while kids dress up in cute costumes to go trick-or-treating and homes gear up with their most ghoulish décor ever, there might be a real life “bogeyman” lurking in the shadows. A serious Excel error could cost a business thousands or millions of dollars. And while this kind of monster may not be hiding under your bed, it can keep you up at night, and even become your worst nightmare.
Here are 5 Spooky Excel Tales that we hope never becomes your nightmare
Tale #1: The Billion-Dollar Forecasting Error With Walgreens
Walgreen CFO, Wade Miquelon was forced to resign after a $1.1 billion forecasting error for the 2016 fiscal pharmacy-unit earnings, calculated based on contracts to sell medications under medicare. The wall street journal reported the error was blamed on the company’s finance and pharmacy units not “talking to each other.” While it’s not clear if the entire error was caused as a result of Excel, the use of manual, siloed systems such as Excel makes it difficult if not impossible for companies to create a fully integrated system that provides real-time updates from all departments and business units.
Tale #2: The 100 Million Tibco Shareholder Payment Mistake
In September 2014, a report noted, “a presentation to the Board of Directors using a spreadsheet overstated Tibco’s fully diluted common stock by the number of shares of restricted stock.” The error lead to the devaluation of Tibco’s equity value leading to a slightly lower payment to Tibco’s shareholders. Tibco’s shareholders filed a lawsuit.
Tale #3: The $2.6 Billion Fidelity Minus Sign Error
Fidelity Magellan in January 1995 had an excel error in its dividend estimate spreadsheet when an accountant transferring data from one spreadsheet to another accidentally eliminated the minus sign on a net capital loss of $1.3 billion. Therefore, treating all subsequent calculations using that number, as a net capital gain, leading to a dividend estimate error of about $2.6 billion.
Tale #4: TransAtla’s 24 Million Clerical “Copy-and-Paste” Mistake
In June 2003, a simple copy-and-paste error led to the Canadian power generator company, TransAlta buying more US power transmission hedging contracts in May at higher prices than usual. The copy-and-paste error was not detected until after the bids were submitted. This simple Excel blunder cost the company a whopping $24 billion.
Tale #5: The Gene Study Errors
A study conducted by Baker IDI on Excel Gene renaming errors revealed, even though Gene renaming Excel errors were first reported in 2004, the error has since increased at an annual rate of 15%. Gene symbols such as SEPT2 (Septin 2) were automatically altered in Excel to “September 2” a time-consuming error to fix for studies that may have large amounts of data. In a BBC interview Ewan Birney, director of the European Bioinformatics Institute, commented; “What frustrates me is researchers are relying on Excel spreadsheets for clinical trials.”
While Microsoft Excel still remains a viable data analysis and reporting tool, it often, relies heavily on manual, error-prone data entry and manipulation. Due to this, Excel should be used a supplemental (presentational tool) that works with your preexisting forecasting or data analysis tool. Automating your data cumulation process reduces human error as much as possible.
Turning a blind eye to the bitter experiences already faced by others could lead to your Excel nightmare becoming a reality.