There are numerous, well-publicized incidents of financial reporting errors and data breaches associated with the use of spreadsheets. These and other risks have led many to call for doing away with spreadsheets entirely. But before you go changing critical business processes that aren’t really broken, consider these 3 reasons why keeping your spreadsheets makes good business sense.
Almost every day there is another public news story about the adverse impact of a spreadsheet error or a data breach due to an Excel file being found outside of the company—like the time last summer when the CFO of Marks and Spencer was questioned during an earnings call about the validity of their Q2 sales performance. Two hours later the company issued a correction with an apology for a mistake they attributed to a “spreadsheet error.” To err is human and since humans control spreadsheets there are going to be errors. It’s not a question of if, but when.
Despite the material risks associated with the use of spreadsheets in business-critical processes, Microsoft doesn’t have to bother with defending or promoting Excel because everyone already has it. Nonetheless a very large number of other software vendors are quite vocal in preaching the evil of spreadsheets and why your life will be better without them. Rubbish! A solid business case can be made for keeping your critical business processes “as is” and not radically changing them just because they are dependent on spreadsheets. Here are the top 3 reasons:
1. The ease-of-use and low cost of spreadsheets and similar end-user controlled applications is nearly impossible to beat.
Businesses run on numbers and thus businesses run on spreadsheets. With over a billion users worldwide, Excel is the lingua franca of business and you can be assured that anyone with whom you need to share information will have a copy. Not only will they always be licensed to open your file, they will know how to use it, read results or enter data into cells. This ubiquity is unmatched by any other application on the planet, bar none. Why should you switch to a different application or platform that fewer colleagues or customers will have access to? Why should you spend more in license fees and new application development services? Using the language metaphor, why should you switch to a language that fewer people speak?
2. Despite their best intentions, the IT Department usually can’t support you.
When was the last time your IT group added staff? In fairness to IT, they are consistently asked to deliver more with less people and that trend has been constant for years. The explosion of cyber threats has diverted a large percentage of IT budget toward mitigating those risks with the net result of even fewer resources available to improve business processes. While a dedicated project to replace an end-user controlled application might be resourced initially, once the project is over you will have lost control of your destiny and those resources will have moved on. You will remain responsible for the results, but you will no longer have control over the tools to get your job done. In today’s environment, the flexibility and speed that comes with spreadsheets is needed now more than ever. You should be skeptical of any application “upgrade” that impinges on your agility.
3. While spreadsheets and other EUCs have risks, these can be controlled.
The benefits and reduced risk exposure associated with IT managed applications aren’t exclusive to those applications. There are risk mitigating controls that can work seamlessly with Excel and other end user controlled applications. So ‘Yes!”, you can keep your cake and eat it too. These controls can be simple, friction-less and as such should be explored before you start a project to eliminate your spreadsheets. For example; if there is a spreadsheet used repeatedly for daily calculation of a financial control, fix it so that users have continued access to the file and the data input fields but only authorized people in your organization can edit the formula(s).
There are risks associated with any business tool or process, and spreadsheets are no exception. The models, tools and spreadsheets built on Excel do have material risks when used in a business-critical process like external financial reporting. However, there are many good reasons why use of Excel is so pervasive in the business world. The good news is you can keep the good and minimize the bad by managing these risks to a lower, acceptable level. There are numerous steps you can take on your own, plus CIMCON and others offer automated solutions to make the risk minimization process easier. So before you agree to let someone else trash your spreadsheets, we recommend you explore these spreadsheet control options and make an informed decision on what path is best for you and your company.
Have any of you had your spreadsheets taken away and a different, IT managed application put in as a replacement?