Reports The Use of Spreadsheets in Commodity Trading | Page 7

The Use of Spreadsheets in Commodity Trading – 2015

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Figure 4 | Ranked Reasons to Use Spreadsheets

We then asked the respondents what they perceived as
being the benefits of using spreadsheets. They were asked to
rank the listed benefits on a scale of 1 to 5, with 5 being “very
important” and 1 being “not important at all”. Given the widespread use of spreadsheets, it’s perhaps not surprising that

none of the benefits ranked lower than “average” and most
were most often noted as “important” and “very important”.

As a group, the respondents indicated they felt the most
important benefit was the sheer convenience and ease of
use of spreadsheets again, followed by the ability to design a
spreadsheet exactly how they wanted to (again - convenience
and ease of use). The idea that there is a strong trader’s
preferences for spreadsheets was also judged to be a factor,
while the belief that there was no problem using spreadsheets
ranked last at “average”. The lower cost of spreadsheets versus the alternatives was also viewed as having above average
importance (Figure 5).

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Figure 5 | Ranking of Spreadsheet Benefits

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alytical functions such as document management (around
10% of respondents). In fact, the same graph above could also
be used as a proxy for maturity of commercial solutions in each
functional area.

Despite the fact that most of these application areas
and business functions are fairly mature in terms of the use
of commercially available software applications, the data suggests that many companies still rely on spreadsheets as an
important supplemental component of their trading systems
landscape. So, do spreadsheets continue to be used so extensively by these individuals and their companies?

We offered the respondents a variety of reasons to
choose from as to why they might use spreadsheets and we
asked them to indicate which they believed were the most
important (Figure 4). The results suggest that by far the biggest factor is simply convenience - it is easier and faster to
use a spreadsheet. The second most important reason was
that while they believed their current application could be
modified to provide certain functionality, it was deemed too
expensive to do so and a spreadsheet (easier, cheaper and
faster) was used instead. Another important reason was the
need to bring in data or information from other sources (lack
of integration). Only 6% of the respondents indicated they did
not utilize spreadsheets at all. Overall, the results show that
spreadsheets are seen as more convenient (easier and faster
to use) and cheaper to use than the available alternatives.

On the other side of the coin, we asked the respondents
to rank their views of the potential disadvantages of using
spreadsheets. Again, all of the potential disadvantages were
ranked as ‘average’ or above, with the lack of an audit trail and
concerns regarding errors being ranked as the greatest concerns; followed closely by regulatory and governance issues,
and lack of control. Difficulty in testing, lack of concurrent access, report generation and visibility to upper management
were the least concerning disadvantages (Figure 6).
When we asked the ‘big’ question directly regarding
their level of concern over using spreadsheets at their own
company, the results were very clear. A vast majority (90% of
all respondents) are concerned to some degree about the use
of spreadsheets at their company, with over 40% indicating
they were very concerned. (Figure 7).

© Commodity Technology Advisory LLC, 2015, All Rights Reserved.