Chaos reigns in the world of spreadsheets

Thanks to its relative ease of use, flexibility and low unit cost Excel has matured to become the most pervasive business tool for risk modelling, financial analysis and reporting applications. But Excel’s perceived ease of use and flexibility have become both its strengths and its weakness.

In many instances though Excel models operate outside normal governance and control mechanism, giving rise to increased risk of failures in such critical areas as valuations, assessments, premiums, trading and financial reporting.

At the other end of the scale, many enterprise risk and financial modelling services are hard coded into line of business or specialist applications. The process for defining and changing these services is complex, time consuming and expensive. Typically it impacts a range of systems and requires lengthy interactions between subject matter experts (e.g. risk analysts, financial analysts, researchers and statisticians) and IT development teams.

Often this results in:

• Poor time to market for new deals,
• higher than necessary development costs
• Less than optimum productivity

In my view the effective solution is effective spreadsheet management requires a risk framework encompassing

• spreadsheet lifecycle and content management and version control
• quality assurance, security and access control
• regulatory and corporate compliant business processes
• access to information required for reporting

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