An estimated billion people use Excel. Clearly, the business community has bought into its effectiveness. And it’s no wonder: Excel has many great features. However, when it comes to managing Governance, Risk and Compliance (GRC), spreadsheets can actually be a dangerous tool.
GRC is not a singular challenge for organizations. In fact, governance, risk and compliance are merely categories for a whole host of challenges and risks embedded within each of those categories. While there is no universally accepted definition of GRC, its three elements are usually characterized roughly as follows:
- Governance refers to the overall management processes of a given organization, which is essentially driven by the senior management (C-level) team.
- Risk Management refers to an organization’s attempts to identify and analyze threats to its operations. Often, these threats involve failure to conform to government regulations.
- Compliance refers to corrective actions made by the organization to mitigate risks that have been previously identified.
That being said, GRC is complex. And if you’re using silo-inducing spreadsheets, which “speak the language” of only one department or one type of data set in each document, the likelihood of being able to manage through that complexity is almost nil. Here are three reasons spreadsheets actually get in the way of managing GRC:
- They are difficult to manage.
- They are prone to errors.
- They do not provide a chain of evidence.
Spreadsheets Are Difficult To Manage
Searching a spreadsheet is easy. Searching many of them, not so much. With that in mind, are reams of spreadsheets an effective way to find information? Not really. Of course, you could always consolidate your many spreadsheets into one, but this is just as labor intensive.
It’s likely your risk and compliance team members spend enormous amounts of hours constructing, posting, editing, and reporting via spreadsheets. It’s critical work but is it efficient? Or cost effective? Or easy to build good reports? And finally, do they scale well? More often than not, the answer to these questions is “no.”
Spreadsheets burn through your payroll, consuming time and resources–requiring your staff to be Excel wizards instead of actual GRC experts who could be leveraged to solve critical challenges.
Spreadsheets Are Prone To Errors
Myriad spreadsheets often mean myriad mistakes. Research even suggests that 88 percent of business spreadsheets contain errors. Errors regularly result from the misinterpretation of data as one evaluates a multitude of spreadsheets in different formats; or from mistakes made while manually re-entering data in order to consolidate many spreadsheets into one.
As such, spreadsheets either lead to a false sense of knowledge and accuracy, or, conversely, they lead to complete data distrust. Either way, poor decision making is often the outcome.
Spreadsheets Do Not Provide A Chain Of Evidence
Version control and data security are real struggles with spreadsheets. Much uncertainty exists around if and when information has been updated and who updated the information. It can leave users asking
- Is this the correct date? Or was it changed?
- Is this an accurate entry? Or was it modified?
- Did I make this entry? Or did someone else?
This can further contribute to mistake-laden data, as well as a lack of accountability for faulty information that could negatively impact your business.
How To Prevent Spreadsheets From Threatening GRC
Spreadsheets have many advantages, but not when it comes to managing governance, risk or compliance. Integrated Risk Management technology, on the other hand, solves for many of the problems that spreadsheets create—simply because of its design.
First and foremost, such technology operates in the cloud—automatically collecting and updating data in real time. It surfaces relevant GRC information from wherever it’s hiding in your organization; connects it with other internal and external data; and then normalizes it with data processing tools to ensure consistency among the data you’re comparing.
As such, it’s easy to access and analyze up-to-the second risk management data with just a few clicks instead cobbling together a bunch of spreadsheets into a mega spreadsheet that will essentially be out of date once it’s time to report.
Even more, the right Integrated Risk Management technology will be specifically tailored for managing GRC—providing a whole suite of applications to improve efficiency and consistency of all business processes and decisions related to corporate governance, risk and compliance.
Don’t let spreadsheets stand in the way. Integrated Risk Management technology can simplify and automate your GRC programs—allowing you to implement, tailor, extend and scale your GRC capabilities.