Saturday, February 08, 2014

Saturday Morning Musings - the rise of the spreadsheet

I use spreadsheets all the time. I have too, A significant part of my professional work involves the manipulation of numbers, making spreadsheets an essential tool.

For someone who thought that he was bad at maths at school, the thought that I would spend a fair bit of my working life working with numbers did not cross my mind. "Bwaa", my old maths teacher once said after looking at some of my homework, "thick head only good for football."

I am still not very good at maths as such, but I do love numbers. It turned out that I had a naturally good eye for patterns and relationships. I also enjoyed analysing them, whether in balance sheets, budget estimates or economic data. I did not enjoy econometrics, although I had to do enough there to pass my Master of Economics degree at ANU. This was a but too much  like the old maths classes for my taste. I was more interested in analysing the results compared to the mechanics involved in getting to the results. Masses of equations dulled my brain.

I can't remember when I did my first spreadsheet training course, 1983 or 1984 I guess. The Commonwealth Public Service had just begun the gargantuan task of introducing personal computing. One PC was placed in the Division and we were told to play with it. I did I was told, but only once or twice. It was just too mechanical and boring.

That first spreadsheet training course was on Lotus 1-2-3. I found it quite interesting because of the way that changes in assumptions such as inflation or interest rates altered patterns across periods. Again, patterns. I didn't rush off and start using spreadsheets; I was very  busy and in any case had people to do that for me. Still, I understood the principles.

It must have been six or seven years later when, willy nilly, I had to begin personally manipulating spread sheets.

We had developed a model of the global communications environment based on an analysis of the annual reports and various financial returns of the top fifty or so global telcos. The model was primarily qualitative. It allowed us to identify and track key trends and interactions, to make our forecasts as to what might happen over coming decades. Our focus was strategic, what it might mean for our clients' businesses. However, there were spread sheet models in some areas where data was available. To get results quickly, I had to learn to do things myself.

Spreadsheeets are a powerful tool, but they are also a dangerous one. Many years ago now, we coined the term the fallacy of number to describe a key danger. Just because something has a number attached to it doesn't make it right. And yet, we found time and time again that the apparent precision associated with a number gave it a weight, a gravitas, that was hard to argue against.

Much of my spreadsheet work can be described as rough and ready, often done under considerable time pressure. Frequently, this involves copying multiple source data and then quickly combining it and manipulating it to get new data sets, to express new relationships. I also use spreadsheets to check spreadsheets!

Outside the work space, I use spreadsheets as a tool to support some of my writing and analysis. Actually, I am a bit of a sad case,  for I become interested in what the data says far beyond the immediate purpose for collecting  the material in the first place. This is not sophisticated stuff. I am not interested in modelling for the sake of modelling and would be no good in an area where the primary focus was on spread sheet and data creation for use by others. I am far too interested in the results, nor do I have the skills required to express complex formulas. I leave that to the data experts

Not all the stuff I do requires the use of spreadsheets. Growing up in the pre-computer world, I am quite used to pen, paper and, later, a calculator.You can do a lot with  rough and ready calculations. I did not need a spreadsheet to make a rough cost estimate of that silly extension in NSW of the hours required to get a driving license. To make a rough calculation of the economic cost, all I needed were a few pieces of input data and a calculator.

Mind you, had I used a spreadsheet I could have extended the analysis.Still, I was writing a blog post, not a research paper. In any case, the incoming Liberal-National Party coalition modified the law. The silliness is still there, but the economic costs have been ameliorated.

As I said, I am a spreadsheet tragic. Looking at the masses of information I have collected as part of my current main history project, I am beginning to wonder about the possible use of spreadsheets to manipulate some of the material, Then I give myself a hasty slap on the back of the hand. Be sensible, Jim. Remember the time taken to create the bloody things, But still, the temptation is there.

3 comments:

marcellous said...

I only use the simplest of spreadsheets,on Excel,on an entirely self-taught basis. Before I got to Excel I just used totalling functions in tables in word processing.

I love the magic of the computer doing the work for you: when you drag a formula you have created down a column and all the cells fill up with the answer!

Just to show how simple and uneducated my use is, I have only just realised that when the cell says ##### that simply means the column is too narrow to display the answer.

Jim Belshaw said...

Good morning, marcellous. Your last sentence made me laugh. I totally understand! It actually is pretty marvelous.

Anonymous said...

I had a direct, and marginally profitable, experience of marcellous' problem in my early days of trying to sell my new-found 'expertise' with computers.

We had quoted two software packages to a real estate agent and an old fashioned department store, only to be beaten by a jazzy crowd with business cards displaying not 1 but 2 light aeroplanes plus three 'flash' cars, based about 100 miles south of our town. (Not small sums in those days - roughly $25000 each)

Then came the day at the RE agent's office that their operator must have leant upon the 0-ero key, and all was just as marcellous said - '#######' - which of course carried through to all associated totals and reports.

Cannot recall what made me stumble upon it, but I ended up 'deducting' a series of $500,000's from the particular rent card balance - until the 'real' balance appeared.

We got two new clients, but the planes flew fitfully for another 12 months or so - all the while taking the best flesh from what was then a very new market. So, yes marcellous, I know exactly what you mean, and carried the financial scars for several years.

And it has been my quite deliberate choice to have never, in the following 30 years or so, use either business for any of their goods or services.