Reducing Errors in Excel Models with Component-Based Software Engineering

TL;DR

This paper proposes a component-based approach using a new Excel function, LAMBDA, to reduce errors and improve efficiency in Excel models by enabling reusable, pre-tested components similar to software engineering practices.

Contribution

It introduces CBSE concepts to Excel modeling through LAMBDA, allowing reusable, error-reducing components that look and function like native Excel functions.

Findings

Reduced model errors with CBSE-based components

Faster model development using reusable LAMBDA functions

Lower skill barrier for junior modelers

Abstract

Model errors are pervasive and can be catastrophic. We can reduce model errors and time to market by applying Component-Based Software Engineering (CBSE) concepts to Excel models. CBSE assembles solutions from pre-built, pre-tested components rather than written from formulas. This is made possible by the introduction of LAMBDA. LAMBDA is an Excel function that creates functions from Excel's formulas. CBSE-compliant LAMBDA functions can be reused in any project just like any Excel function. They also look exactly like Excel's native functions such as SUM(). This makes it possible for even junior modelers to leverage CBSE-compliant LAMBDAs to develop models quicker with fewer errors.