Author: Circadian – circadian-capital.com
ExcelNation #1: when is a system not a system?
Ever described your Excel model as a “system”? Come on, tell the truth (shame the devil).
Many businesses (every business?) and especially those involved in financial services, are stuffed to the gills with Excel models masquerading as systems.
Fret not – you’ll see no stone throwing from me. I’m as guilty as the next girl, and I promise not to tell your regulator about all that undisclosed risk.
It’s already there on your machine, and it’s free[*].
You can see what you’re doing and put it together in blocks. A bit like lego really. Prototyping is fast and feedback is instantaneous.
That grid interface is just so good at presenting numeric data, who can resist? When it comes to organising and running calculations there is no equal.
Reaching first for Excel, the world’s best Swiss army knife, is entirely natural.
But difficulties arise when we overuse it. When we extend it so far that it takes hours to run. VBA can certainly sort out many problems[**], but if you’re heading down to Coding Alley you might as well go that bit further.
Difficulties also arise when we’ve many data sources all trying to dynamically update at once. It just never seems to work, or rather, consistently work.
Sharing? Teamwork? Hhhm, tricksy. Typically, there’s one witch-doctor on the team who knows how to magic the results; you rely on him.
And, because it’s so ubiquitous we’ve all mostly stopped asking why it operates as it does, or thought about ways it could work better.
But, maybe it’s no longer the best way to run a finance business. The Bank of England thinks so too – they worry about
“robust processes and controls”
and how spreadsheets undermine them.
We do – we were lucky enough to have a client ask us to solve this exact problem. They had existential business-risk reliant upon Excel modelling that was highly-complex and under-controlled – but more of that later.
Maybe you care too, and if so, here’s the follow up posts:
- ExcelNation #1: when is a system not a system? [this post]
- ExcelNation #2: how much does Excel cost your firm?
- ExcelNation #3: who wants a piece of the Excel market?
- ExcelNation #4: adventures in being wrong
- ExcelNation #5: redesignOut with Mari Kondo
- ExcelNation #6: redesignIn
Transform your office procedures into services. Fund ranking, Model Portfolios, Client Docs, Client Comms. These are just some of the ways we build your business.
[*] Hey, guess what? It isn’t, but more on this later.
[**] And no Marc, “Record Macro” doesn’t count. Still.