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Microsoft Excel and Financial Modeling - Global Survey Results (July 2011)
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Microsoft Excel and Financial Modeling - Global Survey Results (July 2011)

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Over 320 Microsoft Excel & Financial Modelers worldwide. …

Over 320 Microsoft Excel & Financial Modelers worldwide.

For more information and survey data:

www.vumero.com/blog


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  • 1. Market  Survey:   Insights  into  the  users  of  Spreadsheets  and  Financial  Models     Summary  Presentation     July  2011  
  • 2. ¡  Financial  models  are  crucial  to  the  understanding  and   decision  making  of  many  industries  ¡  Most  prevalent  in:     ¡  Professional  services   ¡  Infrastructure   ¡  Sharemarket   ¡  Logistics  and  procurement   ¡  Strategy   ¡  Industrial  operations  processes   2  
  • 3. ¡  The  report  sought  to  develop  a   deeper  understanding  of    the   processes,  practices  and  behaviours   underpinning  the  use  of  spreadsheets   and  financial  modeling    ¡  The  survey  examined  the  preparation,   resource  sharing,  capabilities  and   perceived  risks  of  over  300  financial   model  users  worldwide       3  
  • 4. ¡  52%  of  respondents  first  search  Google/Internet  for  modeling   assistance,  almost  double  the  number  who  turn  to  wok  colleagues  ¡  34%  built  between  4-­‐10  financial  models  per  year  ¡  Large  organisations  (1000  people+)  appear  to  be  more  reliant  on   financial  modeling      ¡  86%  of  respondents  would  be  willing  to  spend  at  least  5  minutes   searching  for  a  financial  modeling  example    ¡  56%  of  respondents  say  that  the  majority  of  their  financial   modeling  knowledge  is  self  taught     4  
  • 5. ¡  Almost  half  of  the  respondents  were  willing  to  modify  an  existing   model  that  is  only  “50%”  of  what  they  required  ¡  46%  of  models  take  between  1-­‐5  days  to  build  (e.g.  ≤40  hours)  ¡  “Scope  for  error”  is  one  of  the  largest  problems  faced  by  financial   modelers  ¡  Only  53%  of  respondents  are  “confident”  or  “very  confident”  their   models  are  free  from  serious  material  errors   5  
  • 6. Which  best  describes  the  field  you  work  in?   How  large  is  the  organisa/on  you  work  for?   45.0%   40.0%   38.6%   Education   Government   5%   2%   35.0%   30.0%   25.0%   Industry   29%   20.0%   17.2%   15.0%   12.4%   11.7%   11.7%   10.0%   8.3%   Professional   Services   5.0%   64%   0.0%   Self-­‐Employed   <10  People   >1,000  People   200  to  1,000  People   50  to  200  People   10  to  50  People   6  
  • 7. Where  have  you  developed  most  of  your  financial   Which  of  the  following  best  describes  you?     modeling  knowledge?   (Only  answer  one)   External  training   5%   70.0%   61.9%   60.0%   Training   50.0%   provided  by   employer   38.1%   40.0%   23%   30.0%   Self-­‐taught   20.0%   High  school  and/ 56%   or  University   10.0%   16%   0.0%   I  understand  the  technical  side  of   I  understand  the  commercial/ financial  modelling   business  side  financial  modelling   7  
  • 8. Per  year,  how  many  projects  /  transac/ons   Within  your  role,  how  much  of  your  /me  is   require  you  to  undertake  a  significant  level  of   spent  financial  modeling?     financial  modeling?  40.0%   40.0%   34.4%  35.0%   35.0%  30.0%   28.2%   30.0%  25.0%   25.0%   20.2%  20.0%   17.2%   20.0%  15.0%   15.0%  10.0%   10.0%   5.0%   5.0%   0.0%   1-­‐3  models   4-­‐10  models   10-­‐20  models   >20  models   0.0%   0-­‐10%   10-­‐30%   30-­‐50%   >50%   8  
  • 9. When  building  a  financial  model,  how  much   Within  your  organisa/on,  can  you  easily   /me  pressure  are  you  under?   access  useful  financial  model  examples?   40.0%   34.0%   33.7%   Extreme   5.1%   35.0%   30.0%   Significant   38.7%   25.0%   20.0%   17.9%   14.4%   Some   50.7%   15.0%   10.0%  Li@le  or  none   5.5%   5.0%   0.0%   0.0%   10.0%   20.0%   30.0%   40.0%   50.0%   60.0%   No   Limited  amount   Some   Lots   9  
  • 10. Do  you  spend  any  /me  searching  for  relevant   Where  do  you  first  seek  help  if  you  have   examples  to  help  you  get  started?   problems  with  Excel  or  financial  modeling?     60.0%   51.7%  Occasionally   50.0%   40.0%   No   30.0%   27.2%   20.0%   12.9%   8.3%   Yes   10.0%   0.0%   0.0%   10.0%   20.0%   30.0%   40.0%   50.0%   60.0%   Colleague  at  work   Friend   “Help”  menu   Google/internet   10  
  • 11. Which  best  describes  the  kind  of  financial   How  long  would  you  be  willing  to  spend   modeling  you  typically  do?     looking  for  an  appropriate  financial  model   example?   35.0%   33.0%   30.0%   27.1%   25.4%   25.0%   Building  50:50   financial   20.0%   44%   models  from   scratch   15.0%   40%   10.0%   8.2%   6.2%   5.0%   0.0%   Working  with   I  wouldnt   1-­‐5  minutes   5-­‐20  minutes   20-­‐60  minutes   UnYl  I  find   exisYng   what  I’m   financial   looking  for   models   16%   11  
  • 12. How  comfortable  are  you  modifying  a   In  order  for  a  financial  model  example  to  be   colleague’s  financial  model?   relevant  and  useful  to  you  as  a  basis  for   building  a  new  financial  model,  how  much   Extremely   Not  at  all   of  it  would  you  be  willing  to  modify?     6%   comfortable   50.0%   20%   45.0%   43.3%   40.0%   35.0%   I  can  if  I  have  to   30.0%   34%   25.0%   22.3%   20.0%   15.0%   12.0%   12.7%   9.6%   10.0%   Comfortable   40%   5.0%   0.0%   10%   20%   30%   40%   50%   12  
  • 13. What  is  your  biggest  dislike  or  problem  with   When  building  a  model,  how  confident  are   financial  modeling?     you  that  it  is  free  from  serious  errors?   My  lack  of   knowledge   Other  (please   specify)   14%   50.0%   22%   44.5%   45.0%   40.4%   40.0%   Takes  too  long   35.0%   15%   Lack  of   30.0%   supervision   25.0%   5%  Too  much  to  do   20.0%  for  one  person   Boring  and   tedious   15.0%   5%   3%   8.6%   10.0%   6.5%   5.0%   Too  much   scope  for   0.0%   Not  very   Moderately   Confident   Very  confident   error   36%   13  
  • 14. Wastefulness   Distrust   82  mins   50%   Average  time  an  Executive  might   Reported  major  regular  errors  in   spend  per  day  searching  for  needed   financial  models,  including  finding  out-­‐ information   of-­‐date  information  frequently   10%  per  day   25%  Average  time  workers  spend  looking   for  the  information  they  need  to   Business’  trust  information  contained   perform  a  task  or  make  a  decision   in  financial  models   14  
  • 15. ¡  What  are  the  best  methods  for  teaching  financial  modelers?  ¡  How  can  greater  transparency  and  efficiency  be  introduced  into   the  financial  model  review  process?  ¡  Which  industries  and  communities  can  benefit  most  from   understanding  the  benefits  of  financial  modeling?  ¡  How  can  key  stakeholders  better  understand  the  risks  associated   with  poor  subject  knowledge  and  “bad”  modeling?  ¡  Are  there  better  ways  to  share  financial  modeling  knowledge?  ¡  How  can  business  intelligence  better  leverage  the  power  of  Excel?   15