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Do Spreadsheet Errors Lead to Bad Decisions: Perspectives of Executives and Senior Managers
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posted on 01.01.2008by Jonathan P. Caulkins, Erika Layne Morrison, Timothy Weidemann
Spreadsheets are commonly used and commonly flawed, but it is not clear how often spreadsheet errors lead to bad decisions. We interviewed 45 executives and senior managers / analysts in the private, public, and non-profit sectors about their experiences with spreadsheet quality control and with errors affecting decision making. Almost all said spreadsheet errors are common. Quality control was usually informal and applied to the analysis and/or decision, not just the spreadsheet per se. Most respondents could cite instances of errors directly leading to bad decisions, but opinions differ as to whether the consequences of spreadsheet errors are severe. Some thought any big errors would be so obvious as to be caught by even informal review. Others suggest that spreadsheets inform but do not make decisions, so errors do not necessarily lead one for one to bad decisions. Still, many respondents believed spreadsheet errors were a significant problem and that more formal spreadsheet quality control could be beneficial.