Companies That Use Spreadsheets Survive
Written by Janet Swift   
Friday, 13 July 2012

The use of spreadsheets and decision analysis software has been shown to be a factor in long term corporate survival. 

The findings are the outcome of a study presented at the  recent EuSpRiG 20102 conference "The Science of Spreadsheet Risk Management" by Grenville J Croll, who is a member of the European Spreadsheet Risks Interest Group Management Committee. 

The data for his study, details of which are in the paper Spreadsheets and Long Term Corporate Survival come from the sales records of Eastern Software Publishing (ESP) which in the 1990s specialized in the sale of spreadsheet-based or spreadsheet related decision support software, including the Excel add-ins @Risk and Crystal Ball which used Monte Carlo simulation.

ESP also provided spreadsheet related management training and had purchased the sales database of a previous company 4-5-6 world which sold Lotus 1-2-3 add-ins.

A preliminary study was conducted to investigate whether variations in spreadsheet use within UK companies were correlated with variations in company survival rates as recorded at Companies House, the UK's central registry for limited companies, whose Web Check service provides an accessible way to retrieve relevant information.

Although the results of the preliminary study were not statistically significant it served to indicate that a larger study would be feasible, as it had indicated that it was possible to match and retrieve survival and dissolution data at a rate of about 30 companies per hour, and indicated the size of sample methodology required for subsequent analysis.

The main study showed a statistically significant positive increase in survival rates of companies who were purchasers of either or both of the @Risk software and related management training compared compared to a control group.

Over a period of 16 years, approximately 55% of the limited companies in the control segment survived whereas between 68% and 73% of those in Companies in the @Risk and/or seminar segments survived (p<0.05).

 spreadsheeticon

 

So if you thought spreadsheets were just a way of totaling some numbers you need to start taking them more seriously.

More Information

Spreadsheets and Long Term Corporate Survival (pdf)

EuSpRiG

Related Articles

The Monte Carlo method

Microsoft Excel 2010: Data Analysis and Business Modeling 3rd Edition (Book Review)

 

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