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True Tales of Spreadsheet Nightmares

Oct 16th 2015
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In the spirit of the season, I thought I'd focus on despite how accountants may claim to love Microsoft Excel and use it for everything from budgeting and forecasting to operational analysis, it can be pure evil.

Alone, Excel provides little to no protection against data corruption, no way to validate numbers or “mysterious” errors, nor does it offer the transparency accountants require today.

Halloween may only come around once a year, but truly frightful spreadsheet mishaps and mayhem occur on a daily basis. As such, I have pulled together some of the spookiest spreadsheet horror stories ripped straight from the headlines. As these wicked tales demonstrate, unmanaged spreadsheets can wreak havoc on an organization. For those who dare to continue, a warning: The stories you are about to read are frighteningly true.

Beware of Numbers

What began as a seemingly straightforward buyout quickly turned into a horror show following the discovery of a nightmarish (and costly) spreadsheet mistake. Last fall, Tibco Software agreed to a more than $4 billion sale to Vista Equity Partners. Just days after announcing the buyout, a bone-chilling discovery was made. An employee for Tibco's advisor in the deal, Goldman Sachs, noticed something frightfully wrong â€“ the aggregate value within the proposed proxy statement looked suspicious.

Upon further examination, Tibco and Goldman discovered a key document – a spreadsheet – had overstated the number of fully diluted shares. This dreadful situation meant that the implied equity consideration was $4.14 billion instead of $4.24 billion. Moreover, this spreadsheet error led to a miscalculation of Tibco's equity value, a $100 million savings for Vista, and a slightly lower payment to Tibco's shareholders. The mystery regarding who created the $100 million spreadsheet error has yet to be solved.

Devilish Behavior

Just a few months after the Tibco scandal, another grisly spreadsheet story made headlines. Buckhead Beef, a business unit of Sysco Corp., filed a federal complaint against rival meat purveyor Revere Meat Co. and its owners after acts of evil were discovered. The suit alleges the former president of Buckhead Beef and a buyer misappropriated trade secrets and other confidential information to establish a competing business.

One particular document at issue is (you guessed it) a spreadsheet! The yield formulas spreadsheet was described in the suit as “literally the most important document at Buckhead Beef because it allows the company to have accurate cost information for its beef processing operations.”

According to the lawsuit, this incident has already resulted in lost business for Buckhead Beef. These sinister acts led Copper River Grill, which has eight locations in the Carolinas, to terminate its relationship with Buckhead Beef in favor of rival Revere Meat. The customers targeted represent tens of millions of dollars of revenue for Buckhead Beef annually. Now THAT is scary!

Mysterious Mistakes

If you don't have goose bumps yet, here is another spreadsheet tale of horror. Just this month, an email incident was discovered that affects 9,400 Schwab Retirement Plan Services (SRPS) participants.

A spreadsheet containing personal information belonging to participants in a company-sponsored retirement plan serviced by SRPS was accidentally emailed through a secure channel to a participant in another retirement plan serviced by SRPS. Included in the spreadsheet were the names, addresses, dates of birth, Social Security numbers, dates of termination (when applicable), employment statuses, division codes, marital statuses, and account balances for each of the 9,400 participants.

Unfortunately situations like this happen rather frequently, simply because too many organizations overlook the importance of keeping spreadsheets with key data in a more controlled environment. In response to this hideous error, all impacted individuals are being notified and offered a free year of credit-monitoring services in addition to the embarrassment that SRPS is left to deal with.

The Grim Conclusion

While one of these wicked cases involved theft and the others appear to be the result of mysterious fat finger and human error, these cases confirm that spreadsheets left unmanaged can be downright dangerous to an organization, its reputation, and its bottom line.

While many apps have been launched over the years touting their ability to rid companies of evil spreadsheets, it seems organizations are no closer to giving them up.

Why? Because despite the menacing risks, spreadsheets continue to provide the flexibility that users need: no waiting for IT to make changes to systems, no workarounds needed, and no compromises. In short, until organizations put management controls in place, blood-curdling tales of gruesome spreadsheet horror will continue.

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By CliffB
Nov 4th 2016 10:46 EDT

Please - this is NOT Excel's fault - it is the fault of the user - don't blame the tool. It's like saying I wrote down the wrong number so the pen is at fault!
'Spreadsheet horror' is YOUR fault - Excel only does what it is told.

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