09-02: Modelling Manifesto, Conferences, 30 years of spreadsheets, cold-hearted utility

09-02 Contents: Modelling Manifesto, Conferences, 30 years of spreadsheets, cold-hearted utility

Welcome to PraxIS

Both John Dvorak in the US and Paul Wilmott in the UK are reminding people of the limitations of financial models. My book "Spreadsheet Check and Control" and the Spreadsheet Safe (tm) syllabus both require a developer to document assumptions and limitations.

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1) IT Risk

The Financial Modeler's manifesto

Our experience in the financial arena has taught us to be very humble in applying mathematics to markets, and to be extremely wary of ambitious theories, which are in the end trying to model human behavior. We like simplicity, but we like to remember that it is our models that are simple, not the world. [...]Finance is not one of the natural sciences, and its invisible worm is its dark secret love of mathematical elegance and too much exactitude. [...] All models sweep dirt under the rug. A good model makes the absence of the dirt visible. You know what you are assuming when you use [a good] model, and you know exactly what has been swept out of view.
The Modelers' Hippocratic Oath
~ I will remember that I didn't make the world, and it doesn't satisfy my equations.
~ Though I will use models boldly to estimate value, I will not be overly impressed by mathematics.
~ I will never sacrifice reality for elegance without explaining why I have done so.
~ Nor will I give the people who use my model false comfort about its accuracy. Instead, I will make explicit its assumptions and oversights.
~ I understand that my work may have enormous effects on society and the economy, many of them beyond my comprehension

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2) Quality

Software & Systems Quality Conference Dublin, 4 March 2009

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3) Spreadsheets

Thirty years of spreadsheets

http://www.pcmag.com/article2/0,2817,2338796,00.asp
The 30th Anniversary of the (No Good) Spreadsheet App
This is what caused the mortgage crisis: Spreadsheets instead of people were making decisions on loans. Soon these loans were wrapped up into neat financial packages all based on spreadsheet accounting. Brokers gave these packages high, triple-A financial ratings because the spreadsheet told them to. All spreadsheets, except the most mundane, are flawed in one way or another. You guess what the growth rate might be. You guess at the future cost of goods. You play what-if until you get what you want. There's a lot of guessing games played with spreadsheets. This is a flaw.
Discussion: http://discuss.pcmag.com/forums/1004414259/ShowPost.aspx

http://www.dvandusen.com/visicalc_story/index.htm
Dennis Alan Van Dusen The Structured Analysis Resulting in VisiCalc

"The design of the spreadsheet actually was done at TI and leaked to Personal Software (later called Visicorp) after [Dennis] interviewed Dan Fylstra and offered him a job at TI (he persuaded me to join him instead, then .... (long story there, not all good...)."

Ray Butler and Patrick O'Beirne at EuroCACS Frankfurt 15 March 2009

This one-day workshop:
Offers a comprehensive approach to auditing spreadsheets.
Uses real-world examples and hands-on learning to demonstrate the benefits of such an approach.
The participant will learn more about:
Where to start and the most efficient techniques to use
How to cut down a system of spreadsheets to a manageable audit task
The symptoms that indicate potential or actual problems
How an enterprise can create an inventory of its critical spreadsheets, assess them for risk and prioritise scarce resources
Little-known secrets of Excel's auditing features
The causes of spreadsheet errors
The risk environment and processes around spreadsheet use
Techniques for inspecting a spreadsheet for errors
Techniques to reduce the incidence of errors in spreadsheets
What to look for in software tools

VBA + Excel Performance: MS asks for your Feedback

Spreadsheet Check and Control: 47 best practices to detect and prevent errors

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FEEDBACK

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4) Off Topic

Michigan man freezes to death after electric company cuts power

http://www.mlive.com/news/bay-city/index.ssf/2009/01/autopsy_bay_city_man_froze_ins.html
In this case the risk appears to be the assumption that anyone who wishes to pay their electric bill can do so easily. The 93-year-old WWII veteran may
not have had a checking account, a computer, or online bill paying, and the weather was too severe for him to leave home to pay his electric bill in
person. After his death, a large amount of cash was found clipped to his utility bill on his kitchen table.

The Michigan Attorney General's Office is reviewing Schur's death. "Situations like this should be avoidable," Matt Frendewey, spokesman for the Attorney General's Office, told the Detroit Free Press for a story published today. A limiter, placed outside Schur's home adjacent to his electric meter, restricts the amount of electricity reaching the residence. If a home owner tries to draw more electricity than allowed by the limiter, the device cuts off all electricity to a home until the home owner resets the device. Neighbors said Schur struggled to hear, and may have suffered from some amount of dementia. City officials said they don't believe a city worker ever made one-on-one contact with Schur to explain the limiter's operation.

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Systems Modelling Ltd.: Managing reality in Information Systems - strategies for success
IN THIS ISSUE
1) IT Risk The Financial Modeler's manifesto
2) Quality 20% Discount on Software Testing Conference Dublin 4 March
3) Spreadsheets Thirty Years of spreadsheets Ray Butler and Patrick O'Beirne at EuroCACS Frankfurt 15 March 2009 VBA + Excel Performance: MS asks for your Feedback
4) Off Topic Michigan man freezes to death after electric company cuts power
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PraxIS Feb. 2009

IN THIS ISSUE

Welcome to PraxIS

1) IT Risk

The Financial Modeler's manifesto

2) Quality

Software & Systems Quality Conference Dublin, 4 March 2009

3) Spreadsheets

Thirty years of spreadsheets

Ray Butler and Patrick O'Beirne at EuroCACS Frankfurt 15 March 2009

VBA + Excel Performance: MS asks for your Feedback

Spreadsheet Check and Control: 47 best practices to detect and prevent errors

FEEDBACK

4) Off Topic

Michigan man freezes to death after electric company cuts power