How to estimate your risk when using Excel?

We all know that there is an intrinsic risk in using Excel extensively in your business.

Research shows that over 80% of Excel workbooks are either faulty or not adequate for doing the job.

Still, we all love the flexibility and speed in which Excel allows us to get results for complex situations.

With great flexibility comes great responsibility to use this freedom wisely and carefully.

It’s like driving around in your car, not wearing a seatbelt…

When it comes to Excel you need to create your own seatbelts and airbags…

And unfortunately in many organisations that is not the case. 

So, how do you actually calculate the Risk you are facing.
In my view there are three components to consider…

  1. The team size [TS] – the more people work with Excel, the bigger the risk
  2. The number of Excel models [EM] you are running
  3. Your turnover [TO]

If you now multiply them::   TS x EM x TO
and take the square root you have a solid dollar figure for calculating your risk.

Maybe you have 10 people in your team and 10 Excel-models and a budget (turnover) of 10,000,000 your risk is SQRT(10 x 10 x 10,000,000)… That results to 32K per annum.

And when you are looking at your whole organisation with 100 employees and 100 Excel-models and a turnover of 50m your risk equates to ~700K per year.

Why not pick up your calculator and do the same calculation for your team or organisation?

Here’s what you can do today to mitigate that risk:

  • Audit and certify your most crucial Excel models
  • Automate them as much as possible to minimise manual work
  • Systemise your models to have a well documented company – wide structure in place


My clients can expect to trust their numbers again and minimise their risk when using Excel.
Please give me a call to find out how I could help you.

“Jürgen brings German precision and design to all of his solutions, and you can have confidence that the solution he develops is accurate and commercially robust. He has excellent communication skills and can work easily with you and your team.”
Ron Wood, Founder and Director of Pricing Insight
Use Your Systems – Trust Your Numbers
  1. You have an idea or a problem to solve and you don’t know where to start and want an honest, straight forward sounding board with business acumen and IT experience.
  2. You have an existing Excel – solution that is lacking functionality. This is exactly where I helped hundreds of clients with their Excel spreadsheets and workflow.
  3. You want to work directly with me to systemise, structure and automate your workflow models. So that they will allow you and your team to base your million dollar decision on the accurate data. Just email me to set up a time for a chat.