5g - Preventing Errors by Design

Model errors can cost millions and crush careers. 

By the end of this course you will see how we can design errors out of our models by as much as 50% while measurably reducing model risk by more than 90%. Together, we will walk through a step-by-step build of a 100% dynamic array three statement model. You will see how we use 5g functions to replace a sea of fragile, period-by-period formulas with a fraction of the logic resulting in a level of flexibility, structural integrity and version control that traditional modeling simply cannot match. 

The 5g Advantage: Structural Integrity by Design

When we rebuild our modeling DNA using the 5g methodology, we aren't just "cleaning up" data, we are re-engineering the environment to design failure out of our model.

Reduce Model Risk by 90%+ (Eliminating Inconsistent Formulas):
Traditional models are plagued by "inconsistent formulas" - rows of logic that change halfway through because a modeler didn't know how to schedule a rate change, or worse, because they began "plugging" hard-coded values to force a Balance Sheet to balance. These manual interventions are often temporary "fixes" that are never removed, or intentional "adjustments" made to paint a specific, albeit inaccurate, picture.

Dynamic Arrays eliminate this risk entirely. Because one formula in one cell controls the entire range, it is physically impossible to have an inconsistent formula. You either get the logic right for the whole series, or it doesn't work at all. If we hard-code values to make a model right, it is because the model is wrong.

| If we hard-code values to make a model right, it is because the model is wrong.

Slash Errors by 50% (The Power of 5g Functions):
Most spreadsheet errors stem from "disposable" formulas written under pressure. 5g functions are different. Because they are designed to be reused across multiple models, they are crafted with extreme care and tested with professional rigor.

Furthermore, because 5g functions are version-controlled, they offer a safety net traditional Excel lacks. If a bug is ever identified, the function is corrected once and reapplied. This doesn't just protect our future work - it allows us to retroactively harden existing models, making them more robust over time.

What is the 5g methodology?

The 5g methodology is a response to dynamic arrays. Dynamic arrays dramatically reduce model risk and dramatically increase model flexibility, but, 20% of the time, implementing them can be difficult. To make dynamic arrays accessible to everyone, we created the 5g methodology. It packages complex native Excel formulas into simple functions that can be effortlessly imported for use by anyone of any skill level in any workbook. And if we have Office 365, there is nothing else we need to buy. 

The methodology is new to Excel, but was adapted from a decades old, proven methodology that makes the Windows operating system possible. Research shows this methodology reduces errors by 50% and increases productivity by 50%.  

Summary

The 5g methodology is about preventing errors rather than finding and correcting errors. Implementing the 5g methodology by design:

1. Dramatically reduces the probability of errors by eliminating 90% or more of potential failure points.

2. Prevents all causes of the common inconsistent formula error.

3. Makes mistakes like depreciating an asset beyond its life - impossible.

4. Eliminates errors due to mistyped, incorrect, or poorly remembered formulas.

5. Makes working with dynamic arrays easy

6. Requires no special skills

7. Requires no extra expenses

Follow the course outline at right and begin driving errors out by design.