Read this carefully if you use Excel #2
In the previous article, we were convinced that if we want to find an extra 10,000 tons in a trade position at a good price, this can easily be done using Excel.
However, they will only exist in Excel, and when you need them in real life, you will look for them in the warehouse for a long time until you find out that they were only included in the formula. If this sounds unrealistic to you, be sure that Commodity Technology Advisory (ComTech) knows at least one such real case, which caused a company loss of $ 2,000,000. And how many more preferred not to talk about such “successes” …
Today we are going to talk about other surprises of the “easy and fast” tool for commodity trading management. What we have discovered from our clients is that Excel works up to a certain point:
- until nothing happened
- until you need to understand why it happened and who did it
- while the company is quite small and less than 2 people are engaged in operational activities
As soon as these conditions change, the fun begins.
Huge issues with simultaneous work
Suffering will take place once several people are willing to change something in the static Excel file, regularly sent to each other by email (unless you use Google Spreadsheets)
However if you use GS, you might enjoy the company of such beautiful animals.
You will need additional tool in any case
It is a done deal you need additional tools and multiple systems (mail, calendar, task manager, warehouse system, invoicing system, accounting system, reporting tool).
All this leads to a zoo of different systems and platforms that are not in synchronization with each other, making it difficult to perceive, slowing down the time to receive information and react to it, and leading to data duplication.
Impossible to store a documents
In Excel, you cannot store documents, related to deals and shipments. This, usually, means you will have a lot of folders on your local drive in which you regularly need to find something.
What is even more difficult – to make sure that you already have everything by contract, that you haven’t missed anything.
Files from 50 mb – harsh reality
When you increase in trade turnover, it inevitably leads to an increase in file sizes, as a result, some transfer restrictions.
Emails usually limited up to 25MB of attachments. But this is not the worst thing. The worst thing is that you have to work with a file with thousands of lines, the file will be “slow down” a bit, especially when you try to sort the array, or filter the data.
Is it outdated?
You have the file with shipments: last change was yesterday, but it is not clear what exactly changed yesterday.
Moreover, were THESE specific shipments changed?
This still leads to unnecessary clarifications, you need to chat or call colleagues and clarify – is everything up to date?
File versions will create a mess
Different file versions are used by different departments and are not synchronized with each other until it might be too late.
According to our data, only about 30% of companies have switched to online excel. Everyone else is limited to understand who changed something, which opens up many opportunities for errors, intentional and unintentional.
Moreover, finding a deal that was 2 years ago with a specific counterparty is a half-day task.
Some of mentioned issues can be solved with the help of online excel, but main problems, i.e. those that lead to the greatest losses for the company are present even in these tools.
In the next final chapter about Excel we will disclose some real cases with examples and consequences to which this can lead.
Stay tuned.