Data spreads a bit of trouble

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The Independent Online
Computer spreadsheets can be hazardous to your financial health, according to an American scientist who has found that the programs - widely used for all sorts of fiscal forecasting and planning - demand more accuracy than humans can provide. The result can cost companies hundreds or even millions of pounds.

Professor Raymond Panko of the University of Hawaii, Honolulu, discovered that people on average make a mistake typing data into one in every hundred "cells" - a location on a grid - of a spreadsheet, which is a piece of software that can build up complex mathematical relationships between any cell. Spreadsheets are routinely used, for example, to analyse variations in financial performance or predict the effect of interest rate changes.

But spreadsheets can be so complex, and rely so heavily on data from a particular cell, that a single error can be disastrous. Professor Panko found over the course of a decade that 30 per cent of all spreadsheets he has examined contain flaws - some serious. If a quantity is entered incorrectly, or the formula linking one cell to another is written wrongly, the result can be far from correct. "Human beings do not err often," he says in today's New Scientist. "But in large spreadsheets with many hundreds of cells, the normal human error rate is fatal."