Should Spreadsheet Risk Really Keep You Up at Night?
At an auditor’s recommendation, your company may have been asked to better manage its spreadsheets. It may have even learned the hard way how spreadsheets can be dangerous. The risks are not unfounded. According to sources, more than 90 percent of spreadsheets contain errors, yet more than 90 percent of spreadsheet users are confident their spreadsheets are error-free. However, let’s take a closer look at where the real dangers with spreadsheets do – and don’t – occur, and whether they should really keep you up at night.
Why Are Spreadsheets So Popular?
Since its 1985 introduction, Microsoft Excel has become entrenched in business processes, including finance and accounting, human resources and product management. If your company has an ERP system like SAP, users probably export, cut and paste, or even manually re-key the data into an Excel spreadsheet, where they can easily transform the data into reports with the right format and all the necessary modifications like additional columns, calculations, or descriptions.
The painful truth is that when an ERP system doesn’t deliver the right functionality to users, those users will find another way to make things work, such as exporting to Excel. Unfortunately, as soon as the data goes into a spreadsheet, it acquires inherent risks.
What Makes Spreadsheets Risky?
The risk comes in a variety of guises. Lack of version control, erroneous calculations, old master data references, spreadsheet crashes, and lost data are just a few. Managing that risk can fall between the cracks of IT and the business, causing Excel to become the necessary evil if not handled correctly.
- Version control – Multiple versions of data that are periodically pulled into a spreadsheet quickly raise doubts: “Do I have the correct version?” The correct version should be the version that’s live in SAP.
- Multiple users – Excel is not a great collaborative tool. The more the users, the greater the chance of corruption.
- Complex cross-referencing – Multiple spreadsheets referencing each other lead to a network of interdependent spreadsheets that only their author understands. A break in the chain can be difficult to diagnose and fix.
- Master data references – Data can quickly become out of date, as master data changes over time. Any fixed reference can undo an otherwise sound report.
- Calculation errors – Spreadsheets seem to always fail when the data is needed most urgently. Identifying these calculation errors requires some degree of technical savviness. Do your users have that?
How Do I Mitigate Spreadsheet Risk Associated with SAP?
If you’re reading this, my guess is that ignoring the issue has been discounted as an ongoing option. Although there are “spreadsheet accountants” who offer services to measure the magnitude of your problems, you’ll still be left with gaps like data that is a day old or more when it arrives to the spreadsheet.
By providing access to live SAP data, Excel-based reporting tools like GL Wand and Reports Wand let users have their cake and eat it, too. Because their favorite tool, Excel, is the interface to SAP, they can get real-time, accurate and secure data with a simple mouse click.
Some of the ways Excel-based reporting tools help manage spreadsheet risks include:
- Single version of the truth – Data is refreshed as you open the spreadsheet, meaning that it’s based on the only version of the truth: your ERP system data.
- Authorization – Excel-based tools rely completely on the SAP User-ID and associated Authorization Profiles to read SAP tables, so no re-creation of the authorization concept is necessary.
- Prebuilt templates – You can refresh your prebuilt templates with current SAP data on request. Basing your reports on templates reduces calculation errors.
- Read current master data – Any new master data is added to the reports as a matter of course when you refresh the data/logon.
- Instant data refreshes – By refreshing the data when desired, the business can make more agile decisions with the very latest information.
Am I Simply Swapping Spreadsheet Risk for IT Deployment Risk?
With minimal configuration required – and no data warehouse or additional hardware, you could literally be up and running with an Excel-based reporting tool within a few days. Free software trials can be set up to show you how this works.
Author: Simon Parkes
Solutions Specialist, Excel4apps