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And now that it's a proper application they have to worry about authentication, down time, security, documentation, maintenance, and the customization and chang

And now that it's a proper application they have to worry about authentication, down time, security, documentation, maintenance, and the customization and changes they could once do in an instant now requires filing a feature request, waiting for it to be implemented and deployed... Even as a software developer I will freely admit that Excel is the right tool for many jobs. We shouldn't be so eager to transform workbooks into formal apps unless there is a really good reason to.

nordsieck 9y ago
Excel is good for many things, but I'm not sure that complex financial models is one of them. Its convenience is balanced out by its lack of testing facilities. If you assume the industry standard of 1-5 bugs per 100 lines of code, you've got a huge liability on your hands.
- cloakandswagger 9y ago
  I only worked in finance for a brief time, but the operating procedure at my job was to formulate models in Excel, then validate them in a formal QA environment before using them in production. I really doubt any major finance player allows someone to whip up a spreadsheet, plug some numbers in and start trading off that information. Excel is valuable in the early stages because it's fast, powerful and easy to collaborate in. Trying to eliminate it just because it's Excel is dogma.
  - kgwgk 9y ago
    > I really doubt any major finance player allows someone to ... Clearly you only stayed in finance for a brief time :-)
- munchbunny 9y ago
  Depending on what kind of firm or sector of the financial industry you're in, financial models have a problem of constantly changing. Web apps and other programmed solutions work well when you have to repeat the same model over and over, but they don't work well if you're constantly adjusting the model or changing its parameters/calculations. In that case Excel's instant update and flexible (but quite powerful) formula scripting is often the best tool for the job because it means you remove the programmer middle man. I know some shops prefer to just teach the analysts how to write code.
  - mr_toad 9y ago
    Nearly every Excel wordbook I've ever reviewed has errors caused by updating a complicated model. Often this is down to people adding/deleting/copying or modifying rows/columns and forgetting to change cell formula. So, in theory you can modify a workbook and get instant results. In practice this seems to be nearly impossible to to get right.
    - munchbunny 9y ago
      Maybe that implies that we just need to start teaching analysts to write code, but the problem is that when you switch from spreadsheets to honest-to-goodness text-based code, you're just trading one set of problems (spreadsheet mistakes) for another (bugs in your code). In the end I'm personally still in favor of Excel because it has a much gentler learning curve, though you are right that bulk operations in Excel are ripe territory for errors. I don't think it's "nearly impossible" though, it comes down to following best practices the same way you would in any programming language.
- intended 9y ago
  Models have lower bugs. Your fin model has normal sanity checks and then functional checks. And in the end the out put must be readable AND make sense. And whatever bug you have is going to propagate down your projected time series. Finance chaps use finance as their weapon of debugging. Sure mistakes get through. I’ve seen mistakes get through code as well though. Also - analysts get fired a lot faster.

nordsieck 9y ago

Excel is good for many things, but I'm not sure that complex financial models is one of them. Its convenience is balanced out by its lack of testing facilities. If you assume the industry standard of 1-5 bugs per 100 lines of code, you've got a huge liability on your hands.

cloakandswagger 9y ago
I only worked in finance for a brief time, but the operating procedure at my job was to formulate models in Excel, then validate them in a formal QA environment before using them in production. I really doubt any major finance player allows someone to whip up a spreadsheet, plug some numbers in and start trading off that information. Excel is valuable in the early stages because it's fast, powerful and easy to collaborate in. Trying to eliminate it just because it's Excel is dogma.
- kgwgk 9y ago
  > I really doubt any major finance player allows someone to ... Clearly you only stayed in finance for a brief time :-)
munchbunny 9y ago
Depending on what kind of firm or sector of the financial industry you're in, financial models have a problem of constantly changing. Web apps and other programmed solutions work well when you have to repeat the same model over and over, but they don't work well if you're constantly adjusting the model or changing its parameters/calculations. In that case Excel's instant update and flexible (but quite powerful) formula scripting is often the best tool for the job because it means you remove the programmer middle man. I know some shops prefer to just teach the analysts how to write code.
- mr_toad 9y ago
  Nearly every Excel wordbook I've ever reviewed has errors caused by updating a complicated model. Often this is down to people adding/deleting/copying or modifying rows/columns and forgetting to change cell formula. So, in theory you can modify a workbook and get instant results. In practice this seems to be nearly impossible to to get right.
  - munchbunny 9y ago
    Maybe that implies that we just need to start teaching analysts to write code, but the problem is that when you switch from spreadsheets to honest-to-goodness text-based code, you're just trading one set of problems (spreadsheet mistakes) for another (bugs in your code). In the end I'm personally still in favor of Excel because it has a much gentler learning curve, though you are right that bulk operations in Excel are ripe territory for errors. I don't think it's "nearly impossible" though, it comes down to following best practices the same way you would in any programming language.
intended 9y ago
Models have lower bugs. Your fin model has normal sanity checks and then functional checks. And in the end the out put must be readable AND make sense. And whatever bug you have is going to propagate down your projected time series. Finance chaps use finance as their weapon of debugging. Sure mistakes get through. I’ve seen mistakes get through code as well though. Also - analysts get fired a lot faster.