Lessons from Mission-Critical Spreadsheets

Abstract

We present eighteen examples of mission-critical spreadsheets used by diverse people and organizations for application software development, financial risk management, executive information systems, sales and marketing business processes, business operations, and complex analytics. We argue the spreadsheet is a Rapid Development Language, an Integrated Development Environment, and a Fourth Generation Language, and has unusual challenges regarding source code protection. We note that intentional spreadsheet applications are largely absent from the error literature. We explain why people might prefer a spreadsheet to an application developed by the IT department, and show how some spreadsheet programmers choose to avoid-or do not have-an IT department. We find that 1) Spreadsheets are widely used for mission-critical functions; 2) Spreadsheets are an effective application development platform; 3) There is diversity of development skill in creators of mission-critical spreadsheets; 4) Sophisticated programmers sometimes choose spreadsheets over other languages; 5) Spreadsheets are amenable to formal development practices, but such practices seem rare; 6) Spreadsheets play a central role in the evolution of business processes and work systems; and 7) Spreadsheets are a source of "accidental legacy systems". We provide the Skill-User Programming Paradigm to help interpret and explain our observations. We conclude that spreadsheets are vitally important to business, and merit sustained research to discover techniques to enhance quality, productivity, and maintainability.

Integrating Spreadsheet Engineering in a Management Science Course: A Hierarchical Approach

“…I have been unable to find in the literature any studies on the productivity of spreadsheet creation, but there is reason to expect that it is not high. In our empirical work (Grossman, Mehrotra and Özlük, 2006) we found many examples of spreadsheets with poor transferability. We have heard of many situations where multiple person-months of work were lost and had to be recreated when a spreadsheet owner changed jobs or left a company, and his successor could not understand his spreadsheet.…”

“…Croll (2005) finds that spreadsheet models are essential to the finance industry in the United Kingdom, and that spreadsheets are so valuable that "within certain large sectors, spreadsheets play a role of such critical importance that without them, companies and markets would not be able to operate as they do at present." Grossman, Mehrotra, and Özlük (2006) present empirical examples of spreadsheets used as application software and used for essential roles in financial risk management, executive information systems, business process infrastructure, and complex analytics. It is easy to obtain anecdotal evidence regarding the prevalence of spreadsheets by speaking with business school alumni or by walking down the aisle of an airliner and chatting with the spreadsheet users that one inevitably encounters.…”

“…I would welcome empirical research on this topic. While performing field interviews for Grossman, Mehrotra, and Özlük (2006), the researchers discovered that interviewees laughed when asked about representing their spreadsheet models in algebraic notation. This is not to say that algebraic model representation is not powerful or sometimes advantageous, but rather that its use pales in comparison to spreadsheet model representation for general business use.…”

User requirements for a web based spreadsheet-mediated collaboration

“…Since the introduction of the first computerized spreadsheet, VisiCalc, in 1979, the adoption of spreadsheet applications has been continuously increasing in different domains, and is today recognized to play a central role in the evolution of work systems. Grossman and colleagues conclude from their research on the use of spreadsheets as an effective software development platform that 'spreadsheets are vitally important to business, and merit sustained research to discover techniques to enhance quality, productivity, and maintainability' [5]. Spreadsheets are easily customizable.…”

Advances in spreadsheet and database training: Editorial

“…The rapid spread of the use of this program and its successors revolutionized financial analysis (Ceruzzi and Grad, 2007) and drove the sale of millions of desktop computers (Campbell-Kelly, 2007). Today, programs developed using spreadsheet software are critical to the functioning of business (Grossman et al, 2007).…”