As spreadsheets turn 44 this year, is the sun setting on their use in project management?
Despite a long history of high-profile mishaps and the lack of many essential features, spreadsheets are alive and well as a project management tool.
Better options exist and offer significant benefits, especially for large projects. However, organizations need to understand the reasons why employees turn to a familiar solution even if it is poorly suited for the job.
October 18th 2023 is International Spreadsheet Day – the day that officially marks the 44th anniversary of the spreadsheet, one of the most used, loved and hated computer interfaces around the world.
The origins of the spreadsheet
Computerized spreadsheets were invented in 1978 by Dan Bricklin, a Harvard student and computer scientist. Bricklin reportedly came up with the idea as he watched his accounting lecturer create a table on a blackboard and realized a computer could handle the task much better.
By October 18, 1979, this idea materialized into Visicalc, a program that quickly gained immense popularity and earned the title of computing’s first “killer app.” Six years later, Microsoft introduced Excel, now synonymous with spreadsheet software.
Originally tailored for accounting tasks, the application of spreadsheets has diversified, sometimes leading to unintended consequences. As journalist Yogi Schultz humorously noted, “Engineers are world leaders in misusing Excel.”
Room for error
Over the years, spreadsheet errors have been implicated in significant mishaps, from JP Morgan’s $6.2 billion loss due to a copy-paste error, to the misreporting of 16,000 coronavirus cases during the early days of the pandemic, and even disrupting party election results in Austria. While all of these issues often stem from human error in data handling, the inherent structure of spreadsheets can make these mistakes easy to make and hard to detect.
Yet, with 2 billion users worldwide, the allure of Excel remains strong. A survey conducted by the Project Management Institute for Hexagon found that a significant portion of companies involved in large-scale engineering, construction, or major equipment manufacturing projects still rely on spreadsheets for tasks like budgeting and forecasting.
More surprisingly, a large share of respondents admitted to using spreadsheets in areas where they are ill-suited, such as ideation, progress monitoring or risk management. “42.4% of survey respondents reported relying on spreadsheets for risk and change management,” the authors lamented. This is not only inefficient and ineffective; it increases the risks that are trying to be controlled.”
On large projects, the limitations of spreadsheets become evident. They often don’t integrate well with other software, necessitating manual data input and extraction, which heightens the risk of human errors. Furthermore, they offer limited capabilities for collaboration, access protection, and tracking changes.
Looking to the alternatives
Better alternatives exist, such as enterprise project performance software, designed specifically to cater to the needs of large projects. These platforms provide functionalities that are beyond the scope of traditional spreadsheets, especially in areas like planning, scheduling, quality control, and risk management. “Spreadsheets are no longer suitable for enterprise-level management today, and the focus should shift to integrated, enterprise-level solutions,” the Project Management Institute survey confirms.
However, companies routinely find that the challenge isn’t merely about phasing out spreadsheets, which are often a symptom of deeper issues
Most notably, their persistent use often stems from their familiarity with employees, but also from the lack of access to, trust in, or training for alternative tools. Most commonly, employees resort to spreadsheets because they find it hard to filter relevant data or do not trust the results they find and want to perform their own calculations – even at the risk of adding their own mistakes.
In this regard, the persisting reliance on spreadsheets often reveals organizational gaps. As economist Tim Harford commented on what he termed “the tyranny of spreadsheets”, “it also neatly illustrates the contortions we go through as a result of treating data as an afterthought, just something to slap together on a spreadsheet. That is a shame because history suggests that well-managed information can be transformative.”
James Tauladan is EMIA Vice President for Enterprise Project Performance, Hexagon Asset Lifecycle Intelligence Division.