Spreadsheet Risk – Why companies can no longer ignore the threat of spreadsheet risk – Part 3 of 5
3 MIN. READ
This article is the third in a five-part series exploring spreadsheet risk, the challenges it presents, and ways to protect your company’s resources and reputation from the risk inherent in spreadsheets.
Too many companies ignore or don’t know the risks inherent in their corporate spreadsheets, so they fail to take steps to mitigate the damage an erroneous spreadsheet can cause. Managing spreadsheet risk is becoming more critical as organizations capture and use increasing volumes of data in their quest to remain competitive.
Spreadsheets can fail for many reasons. Data input errors, often made by unskilled or untrained workers, are one of the most common failures. Inappropriate or flawed formulas are also a concern, and even external events such as power outages or technology gaffes can adversely affect spreadsheet accuracy. In fact, failed spreadsheet management can skew every aspect of risk management, including risk auditing, risk analysis and risk governance.
The consequences of spreadsheet errors are also daunting. The federal Sarbanes-Oxley Act (SOX) mandates strict data management practices to prevent loss or inappropriate exposure of consumer information. Failure to achieve SOX compliance not only puts customer data at risk but also results in a heightened internal end-user computing risk. Failure to follow SOX best practices to minimize spreadsheet risk can also result in reputation damage, which will reduce shareholder returns and even cause loss of market share.
Businesses are aware of spreadsheet risk – but few are making changes
Despite these realities, too many organizations still ignore or disregard the risks that lurk within their spreadsheets. In a recent Forrester Consulting study on spreadsheet risk commissioned by Incisive Software, entitled, Think Spreadsheet Risk Isn’t a Threat? Think Again, researchers found that while more than half of respondents (53 percent) reported being very concerned about spreadsheet risks, fewer than one in five (19 percent) were actively addressing the problem, and almost one in four (23 percent) weren’t in a position within their company to do anything about it.
Unfortunately, their inability to address the very real risk presented by unmanaged spreadsheets increases the likelihood that their business will suffer when those failure risks turn into failure realities.
Spreadsheet risk is real – but companies don’t know where or how to start mitigating the risk
Although spreadsheet risk is real, the study reveals that many professionals do not know where to begin with addressing the risk or see themselves as not in charge of solving that problem. Forrester researchers discovered that a third of respondents reported that spreadsheet risk is not a priority at their organizations, and 32 percent stated that while they recognize the risk in spreadsheets, their management does not. These findings underscore the fact that C-level executives are making decisions based on data assumed to be accurate but that can contain errors.
Automated platform solutions manage spreadsheet risk – what you should look for
Automated spreadsheet management platforms offer the solution businesses need. Managing vulnerabilities means managing risk, and comprehensive automated spreadsheet management solutions are designed to scan for and address spreadsheet vulnerabilities before they can pose a risk to the enterprise. The programming provides oversight and management for every spreadsheet function, regardless of its purpose.
Automating spreadsheet management makes risk analysis, risk assessment and risk management easier, with automated programming doing the work. Dedicated spreadsheet analysis ensures that all corporate data is clean and accurate so that leadership can be confident in its subsequent corporate governance decisions.
According to the Forrester Report, many survey respondents are looking for a spreadsheet management platform with not only a low total cost of ownership but also easy integration into their existing workflows. Ease of end user adoption – rated as the third most important quality in a spreadsheet management software – is the key to truly managing risk. Without the whole organization’s buy-in, risk will remain rampant through the organization. With a holistic approach to risk management, organizations can feel confident in mitigating their risk exposure.
Whether it’s low cost of ownership, ease of user adoption or overall price, companies that define a set of criteria upfront will have greater success when selecting an automated spreadsheet management solution. To learn more about how your company can begin to mitigate spreadsheet risk, download the Forrester research today.