The demand for rapid response pressured individuals to be able to store and retrieve information and crunch data faster than ever before. The spreadsheet became the tool of choice, in large measure because it did not require engaging IT.
In the last few years, the architectural infrastructure of enterprise applications has changed significantly in key areas of business including finance, HR, the supply chain and operations. Demands for closer management of people and processes - and greater security of data - have driven companies to centralize technology functions. Now that the rest of the enterprise has transitioned, the independent use of spreadsheets stands out as an unwelcome and even dangerous exception.
We've found in our research that when organizations examine their processes, they often discover that many of the control points for key decision-making depend on spreadsheets embedded in those processes. This situation raises serious questions about quality of the data and the governance and security being applied to it. In complex systems with many process dependencies, changes to a single spreadsheet can have ripple effects. The lack of built-in auditing and server-level management can haunt organizations as they try to figure out who made what changes, when and why.
As a result, businesses are forced to confront the realization that there is a price for using spreadsheets as a shortcut. Simply put, where spreadsheets are involved, there cannot be a complete audit trail. In other words, the price is an absence of rigor in strategic business processes and the management of key company data. The plain fact is that this technology was not designed for critical, enterprise-wide tasks, and companies today do so at their peril.
Unfortunately, the network sophistication and enterprise readiness of spreadsheets has not changed significantly since the mid-1990s, when Microsoft started on its path to become the market leader in personal productivity tools like spreadsheets. Most business professionals will admit that they only use a fraction of the technology's capabilities. Nonetheless, they utilize spreadsheets for far more than personal calculations and individual decision-making.
Microsoft promises that the upcoming new release of its Office suite will add some enterprise and management capabilities to Excel, but the costs of upgrading an entire personal computer infrastructure company-wide to support the new storage and memory requirements will be enormous. For organizations with hundreds to thousands of computers, the cost could be dramatic, making a full analysis a necessity.
For organizations that choose not to go this way, the good news is that a new generation of spreadsheet management technologies is emerging, built around the vision of an enterprise spreadsheet that supports the governance, auditing, distribution and life-cycle management needs of business.
Answering the needs for auditing existing spreadsheets and improving their future design, companies such as ClusterSeven, Compassoft and Prodiance have stepped up and taken the early lead. Their products offer auditing and governance features for spreadsheets, features that reportedly will not be included in the version of Microsoft Excel expected to be released next year. These capabilities will be important for organizations that have moved beyond mere audits to validating and improving the quality of existing spreadsheets (if they continue to use them) or migrating to enterprise-class applications that offer spreadsheet-like functionality.
Though business now is able to further clean up its spreadsheets and impose more rigor on their design, deployment and auditing, there should be further discussion of the usage of these tools. I'd argue that in many cases the assertion that spreadsheets are easier and faster to use may not prove accurate in instances where information from within the organization needs to be integrated into other business processes or information systems.
In any case, the IT organization needs to be involved in the collaborative work on the best path forward. This will not be an easy job, since IT in many instances will not have been aware of the extent of the usage of spreadsheets and may not be clear about the true reasons for the use of spreadsheets.
Many advancements in business intelligence technology enable the controlled use of spreadsheets as an access, analysis and delivery interface to enterprise level information systems. In many cases these capabilities have been available since the late '90s, but have not been widely adopted as part of reporting systems or for ad-hoc query and analysis. Today, IT can use these approaches to make information architecture and infrastructure less rigid and more responsive. In addition, dynamic access to multiple data sources through business modeling now is more rapidly available in BI and enterprise information integration technologies.
Can your organization establish as policy the right and wrong places to use spreadsheets? This may prove challenging, but proper education and governance - guidance on how you conduct your business and use non-enterprise systems like spreadsheets - is a great first step. On the flip side, not having policies in this area is a large risk for organizations. Executive management from finance, operations, legal and even HR will need to play a larger role in this situation.
For some time now awareness has been building of the dangers of the unregulated use of spreadsheets. Each organization should plot a track forward that reduces the risks, time and cost of relying on spreadsheets for business processes that involve more than one person, or contain data with broad business significance. If you do not, you may find yourself in a situation where spreadsheet use has a problematic financial, operational or legal impact.