Sword Active Risk, a supplier of specialist risk management software and services, has published a paper highlighting the risks of relying on spreadsheets within the risk management process. In the paper, Sword Active Risk Marketing Director Keith Ricketts explains why the spreadsheet approach does not work for risk management.
Ricketts states; “Spreadsheets are universally loved. Why, because they give everyone their own version of the truth, with complete autonomy to update and amend them as often as they like. However, while spreadsheets might be a great tool at an individual level they are completely un-scalable, and therefore totally unsuitable for compiling and analysing important information such as Risk data, either at enterprise or individual project level.”
“Worst of all,” states Ricketts, “is that organisations using spreadsheets for risk think they have ‘ticked the box’ when in fact they are probably in a worse situation because they are more complacent, and therefore more susceptible to risks to the business.”
Increasingly risk management is no longer a standalone function. Taking a proactive approach to risk management is becoming ever more critical to success and can deliver major benefits including:
- Improved EBITDA – up to three times, according to the Ernst & Young study in 2012
- Improved Visibility – Enhanced visibility and accountability builds confidence in the risk management process
- Actionable information – supports more effective strategic planning and decision making
- Better resource allocation – across the enterprise leads to better asset utilisation
- Achieve Goals – Increased ability to deliver capital projects on time and on budget
- Better relationships with insurance providers, regulators and stakeholders
Ricketts concludes; “Manual methods and spreadsheet solutions have become the high-risk option for managing risks and are no longer up to the job. Only a true enterprise risk management solution will capture consistent data, provide a single version of the truth, allow access to real-time, trustworthy information and provide the reports required to proactively manage risk and opportunities. ERM can move risk management from a cost to the business to a value-adding process which can make a difference to the bottom line of any organization or project.
For a copy of the paper ‘Using Spreadsheets to manage Risk is Risky Business indeed!’ please call Andreina West on 01491 639500 or email firstname.lastname@example.org