- Third-Party Excel Utilities
- Pitfalls of Using Excel Tools
- Where to Find Excel Resources
- Customizing Third-Party Resources
- Make or Buy?
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Pitfalls of Using Excel Tools
Whether built-in or obtained from third parties, Excel tools are just that—tools, not magic. In some ways, using Excel tools is like taking a four-wheel-drive vehicle into the back country. Either one can give you unprecedented capability—or leave you stranded in the middle of nowhere—depending on how you use it.
There are several situations that can get you in trouble with these resources, and you need to consider that fact when choosing and using Excel tools.
You Must Understand What’s Happening
The biggest danger in using an Excel resource of any sort lies in not understanding what it’s doing. The resource may be working perfectly correctly, but be inappropriate for the job you’re attempting.
For example, if you don’t know what Markowitz Portfolio Analysis involves, and you don’t have at least some understanding of its strengths and weaknesses, you’re better off not trying to use it to evaluate an equity portfolio.
In addition to understanding the strengths and limitations of the tool, you should also try to understand the implementation. If at all possible, you should examine the workings of the resource to try to understand what’s going on under the covers.
Tools Are Often Highly Specific or Difficult to Modify
Many Excel resources, especially the free ones, were written to do just what their authors wanted them to do. Which is fine if you want to do exactly the same thing. It’s not so good if your needs are different.
As noted earlier, Excel resources can be difficult to customize for your specific needs.
Security Is Always a Consideration
In these days of Trojans and rootkits, security has to be a major concern. Although gimmicked Excel add-ins aren’t the most common ways of getting into your computer, they can be used to do it.
It pays to read the descriptions carefully. Often, you’ll have a dozen or more resources to choose from to do a specific job. A study of the description and a quick visit to the author’s web site (if any) can be a big help in selecting the best tool for you.