View More Content

EuSprIG 2014 – financial modelling observations

EuSprIG 2014 – financial modelling observations

Haydn Palliser, Managing Director – EMEA and myself represented Corality at EuSprIG 2014 in Delft, Holland in July this year. I would like to share some reflections on the conference, which brought together the crème-de-la-crème of spreadsheet professionals, academics and enthusiasts.

Corality’s Haydn Palliser - Infrastructure / project finance modelling

Haydn’s presentation, ‘Infrastructure model ecosystem - complex interfaces increasing risk’, built upon the developments in financial modelling standards during the last few years.  ‘Financial modelling standard’ has become a house-hold term within leading organisations with significant exposure to financial modelling risk. In his presentation, Haydn expressed his view that a financial modelling standard only addresses model risk, one model at a time. He highlighted the exponential exposure experienced in most organisations with ‘model ecosystems’ with large interconnectivity and numerous decision points. It was interesting to hear Haydn’s call for a cultural spreadsheet revolution in addition to other speakers’ more mechanical and scientific approach to spreadsheet risk. Haydn's has delivered a vast amount of financial modelling courses in London and shared his experience from consulting clients and training course participants.

Download Haydn's presentation

F1F9 Morten Siersted - FAST financial modelling standard

Morten is a fabulous speaker and has brought a lot of insights to the world of financial modelling over the years. He delivered an animated and engaging presentation, replacing Emily Cowan from the FAST modelling organisation as she was unable to attend. The key theme in Morten’s presentation was not the benefits of the FAST financial modelling standard, but instead the developments within the Institute of Chartered Accountants England and Wales (ICAEW) and their recent initiative of publishing their view of “20 principles for good spreadsheet practice”.

ICAEW - Adopt a modelling standard for your organisation and stick to it.

For an accounting body, such as ICAEW, to make the choice of selecting a financial modelling standard number two on its spreadsheet risk-list is the most positive act in taming wild spreadsheets that has been observed in a long time. The only point they saw as more important was “[determining] what role spreadsheets play in your business, and plan your spreadsheet standards and processes accordingly”, i.e., figure out what you need before you start. Makes sense!

I have much respect for F1F9 and their work on the FAST financial modelling standard (in my view the only standard that comes close to our own SMART methodology), and I agree with Morten and ICAEW that if all organisations simply picked one of these standards we would end up with a lot less Piketty style failures.

Ray Panko - Spreadsheet Risk

I listened to Ray’s presentation while enjoying a good conversation over dinner. I am pleased to say that it is refreshing to hear about his work around error detection strategies and probabilities. His thoughts on spreadsheet inspection (SI) are applicable to any organisation looking to increase their knowledge on how much testing is required to achieve a given error frequency. The reality is (and I would agree here) that a lot more time is required than what organisations are willing to invest!

Ray Panko represents an essential component on any spreadsheet risk reading list.

Felienne Hermas spreadsheet risk

Felienne is a rising star in the world of Excel risk. If you haven’t already watched it then I would strongly recommend her TEDx Delft presentation on ‘What Archimedes has to say about spreadsheets’.

The presentation at EUSpRIG in Delft 2014 had a similar Herman-esque presentation style, delivering statistical facts which would result in many sleepless nights for a lot of corporate managers trying to get on top of their spreadsheet risk situation. The refreshing thing about Felienne is that she has conducted numerous field studies in the industry to collect data for her analysis.

The social benefit of spreadsheets

No spreadsheet risk conference is complete without a big night out fuelled by spreadsheet jokes, photo session (say “spreadsheet!”) and verbal Excel keyboard shortcut battles. It may not be for everyone, but I have to say that I thoroughly enjoyed ‘geeking out’ and getting my Excel trick book updated for the coming year.

A special mention to Thomas Levine who took the conference to a new philosophical high with his experimental research on audio-representation of spreadsheets/big data, and (my absolute favourite) Gastronomification (turning data into tastes/food – think  big data represented in recipes, such as guacamole where the volume of ingredients are adjusted based on a data set).

(Warning: Read these only if you have no intention of adding corporate value today!)

Data guacamole

Thomas Levine Twitter feed

We left Delft with a sore head from bad spreadsheet jokes and deep thinking, and look forward to repeating this again next year!

Rickard Wärnelid
by Rickard Wärnelid

Rickard's passion for financial modelling is built on specialist roles in the highly quantitative fields of derivatives and project finance, a career path complemented by an academic grounding in engineering physics. Born in Sweden and with global consulting and leadership experience, Rickard is an internationally recognised authority, speaker and thought-leader on the organisational benefits of best practice financial modelling.

Contact Rickard Wärnelid

view all