$10B Annual Tab for Spreadsheet Errors?

theodp writes "According to PWC and KPMG, more than 90% of corporate spreadsheets have material errors in them. With each error costing between $10K and 100K per month, one expert estimates corporate America loses in excess of $10B annually through the misuse and abuse of spreadsheets." From the article: "The key point about spreadsheets is that you need to know which ones are critical to your business, which ones are merely important and which ones you do not have to bother too much about. Once you know that, you can start to apply appropriate policies depending on the criticality of the spreadsheet involved."

Comments

Re:Does anyone understand this?

[dykofone]

I was on a co-op with GE Power Systems and was working on their spreadsheets that determined necessary pipe sizes and lengths for certain operating characteristics. There was an error in there that was causing two mismatched pipe diameters to be ordered and sent to the site, at which point it cost somewhere around $10,000 to correct the problem (mainly due to delays).

I fixed the problem in the spreadsheet, and then dug through all the existing orders that were about to be filled and corrected them. The problem had cost GE about $300,000 and was about to cost them another $120,000 in the next month. The interesting thing, is nobody had really cared to do anything about it until an intern came along, and dumped it on me. They just don't see $10,000 as a whole lot of money in the grand scheme of things, so I'm sure stuff goes on like this all the time.