Carmen Reinhart and Kenneth Rogoff made a big mistake in Excel. The two Harvard economists miscalculated that countries with public debt of 90 percent of GDP or more tend to experience a slower growth at a (negative) rate of -0.1% when actual data suggests the positive rate 2.2% instead.
While everyone makes mistakes, and we do come across a lot of those in our daily practice, this is one upon which worldwide economies have made their growth forecasts and put in place austerity policies. It now appears that these may have been largely unjustified. Annoying? Not only. Embarassing? Not even that. Simply devastating!
At our Excel workshops we emphasise best practices in data modelling. We also illustrate the point with real-world mistakes which have cost real companies a lot of money. It seems we now have yet another tragic example to use, unfortunately. Here are two of these essential best practices in data modelling you need to apply today:
- Always state assumptions you make in your model
- Always put in place ways to cross-check your calculations
While your spreadsheets may not handle data which will impact the world’s economies, don’t wait until disaster strikes and take action today to ensure your spreadsheets are fool-proof. If two Harvard economists followed by thousands of experts can get it wrong, how will you know you are not putting your job, your organisation, your people at risk because of your Excel formula?
At BusinessBrains.ie we can help with the following:
- Excel training and best practices
- Data modelling
- Spreadsheet auditing
- Business intelligence
- Data management
- And many more…
If in doubt – and especially if you are not in doubt -, contact us for a free audit of your company spreadsheets. Don’t take a chance and find out today if you are at risk.