16,000 lost COVID tests, MI5 misdirecting surveillance, and a 400 million dollar discount are just some of the biggest (known) Excel mistakes in history. We've all made mistakes in Excel, but hopefully not on the same scale as the examples below.
During the 2012 London Olympics, a staff member accidentally entered a "2" instead of a "1" in a spreadsheet when counting the number of available tickets for the competitions in synchronised swimming. This resulted in 10,000 more tickets being sold than the venue could accommodate. Fortunately, the mistake was discovered before the competitions and those who had purchased non-existent tickets were given tickets to other Olympic events. This is a clear example of how a small manual error can have a significant impact.
In 2005, the photography giant Kodak suffered a loss of 11 million dollars in their budget. This was due to a typo where too many zeros were added in the spreadsheet, leading to severance pay and pension benefits being calculated incorrectly. The mistake occurred at an already difficult time for the company, which was losing over 100 million dollars every quarter. Although the error was discovered and Kodak was able to adjust its financial reports, the loss was still substantial for the company.
During the pandemic, vast amounts of data about COVID were circulating, regarding for example the number of infected and isolated, countries in lockdown, and the number of deceased. During this time, Public Health England failed to register nearly 16,000 COVID-19 cases. This was because one of the laboratories conducting the tests reported the results through a CSV file – which was later uploaded to Excel. Since Excel has a limit on the number of rows that can be read, the last part of the CSV file was not included, and the positive results were therefore missed.
In 2010, MI5 had a list of phone numbers that were to be wiretapped. However, a formatting issue in an Excel sheet containing the phone numbers created significant problems. The last three digits of the phone numbers in the list were all changed to "000" by a formula, which resulted in the agency wiretapping 134 people who were not involved in the ongoing investigation. The error was discovered relatively quickly, and the material was destroyed, but it shows how important it is to have a firm grasp on how Excel handles data.
In 2012, one of JPMorgan Chase & Co’s employees, Bruno Iksil, nicknamed the "London Whale," managed to lose at least $6.2 billion for the company. Iksil had accumulated a massive amount of Credit Default Swaps (CDS) on the market as part of the bank’s hedge fund strategy. Soon, insiders began noticing that the market was affected by his aggressive trading style, and chaos ensued. It was eventually revealed that the risk model that was used involved manual copying and pasting of data from several different spreadsheets. The formulas had not been adjusted correctly, leading JPMorgan to be fined $920 million, and their CEO’s salary was cut in half in 2012, from $23 million to $11.5 million dollars.
In 2016, Lazard Investment Bank was acting as an adviser to SolarCity Corp regarding their $2.6 billion dollar sale to Tesla. However, an error in the spreadsheet led to a discount of around $400 million dollars being applied to the sale. Lazard's analysis of the company indicated a value of between 14.75 and 34 dollars per share. However, this was incorrect because the analysis mistakenly double-counted some of the company's expected liabilities. The error was discovered, and the valuation was adjusted to between 18.75 and 37.75 dollar per share.
For a long time, Excel has been a standard tool for companies' financial teams, and as we often point out, there are many advantages to the tool. But as most of us know, it is also incredibly easy for something to go wrong (#REF). The examples above show that small errors in formulas or data can quickly lead to big problems and costly consequences for businesses. Managing these risks requires a significant amount of manual work and a deep understanding of each part of the budgeting and forecasting process. With a planning tool like Planacy, you can simplify, automate, and secure your financial processes, which not only saves time but also significantly reduces the risk of errors that Excel can cause. With a modern system, you can feel confident in your financial planning.
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