The Calculation Engine can convert a complex business spreadsheet into an online, cloud-hosted web service with a few clicks of the mouse, that can be easily integrated into existing web-sites and can save weeks or months of development and testing. 

Many businesses in the financial industry depend upon spreadsheets to perform important business tasks, such as pricing models for the insurance industry, financial analysis for the financial planning industry, risk assessments, budgeting, data collection & validation and an assortment of other uses.

Spreadsheets are great tools. They are easy to use, quick to setup, provide immediate results and can solve some very complex calculations. They can evolve over a period of time, accumulating increasingly complex business rules, and can be authored, maintained and tested by an appropriate expert in the business without development or coding skills.

… at some point in time, the business realises they need to “systematise” the spreadsheet…

However, spreadsheets also have limitations. Despite various workarounds, they are designed for a single user. The clients data, the reference data and all of the calculations are bundled together into the same file – e.g. saving a copy of a pricing model for a client also saves a snapshot of the reference data and calculations. Updating that client’s model later runs the risk of using out-of-date reference data or calculations.

Systematise the spreadsheet

At some point in time, the business realises they need to “systematise” the spreadsheet, and convert it into a centrally managed web hosted solution. Perhaps there is a need for many people to use the same spreadsheet, or people make mistakes by using the wrong version, or the spreadsheet calculations need to be integrated into the corporate website. Maybe the business needs a better way to manage the reference data used, or Compliance may require more rigour around version control and auditing usage.

At this point the spreadsheet usually becomes part of the specification for the solution, and it is given to a development team to implement into a web application. Depending upon the complexity of the spreadsheet this can take weeks or months, as the development team need to understand and decompose the spreadsheet, implement database tables for reference data, and re-code all of the calculations into the application. A large amount of testing is often required to ensure that every business rule and corner case has been implemented correctly.

Often the real cost of systematising a spreadsheet is not the initial implementation but the ongoing costs and maintenance. As each calculation is typically hard-coded into the web application, every change to a calculation or reference data typically requires coding changes by a developer, testing and a new release/deployment. Depending upon the complexity of the system this can take days, weeks or months especially if the release must be co-ordinated with other software changes.

What if there was a better way? What if the spreadsheet could be loaded into a calculation engine, and all of the business rules, calculations and corner cases were automatically extracted and loaded into a cloud-hosted online solution? What if this delivered the same calculation results as the spreadsheet without needing to re-test all of the calculations? What if this could be achieved in a few minutes without the developers needing to even understand the complexity of the calculations? What if the expert who created the spreadsheet could continue to enhance and refine the spreadsheet and then upload and publish updates to the calculation engine without even needing a system outage?

About the Calculation Engine

The innovation of creating a calculation engine arose from a client engagement with a company that creates financial planning software. Their software provides tools to financial planners and implements dozens of complex financial calculations around taxation, superannuation, investments, pensions, forecasts and suchlike. Each of these calculations require specialised reference data and calculations, and are also highly susceptible to budget changes, taxation updates and other rule changes.

First each calculation tool was implemented in a spreadsheet so that the financial analyst could test the business rules and ensure they understood and implemented the calculations correctly. Historically, these spreadsheets were provided to developers who could spend hundreds of person-hours deconstructing the spreadsheets and implementing hard-coded calculation solutions. Instead, these spreadsheets can be loaded into the Calculation Engine, and with a few clicks of the mouse are configured into online cloud-hosted web-services.