You may wonder how much damage one spreadsheet can do if you are in compensation plan.
In 2012, the London Whale Disaster cost J P Morgan Chase $6 billion. That’s billion with an B. The model was called the Synthetic Credit portfolio Value at Risk Model (VaR), and it was manually updated using Excel. A mistake was made, and it was repeated, resulting in massive losses.
In 2020, the UK’s contact tracing programme missed 15,841 Covid positive cases. Why? Excel only has a certain number of rows, and no additional cases were added.
In 2024, Aomori Prefecture officials discovered that 790 million yen ($5.4 million) in lost tax revenue had been missed. They recalculated the amount and contacted thousands of taxpayers. Someone made an Excel reference mistake.
Spreadsheets are a problem
Excel isn’t bad. Excel isn’t evil. It just wasn’t built to handle critical and high-stakes tasks, such as compensation planning.
Click here to continue reading: The $6 Billion risk: Compensation Planning Doesn’t Belong on a Spreadsheet
