LONDON, 8 February 2006 -The spreadsheet may be ubiquitous as the current tool of choice for business intelligence (BI) but its time is coming to an end. Thatâs the view of IT services supplier ZEDA, which argues that it lacks the flexibility of specialist BI software, is inappropriate for calculating business risk and, most importantly, does not record the electronic audit trails now necessary to comply with regulations such as International Financial Reporting Standards (IFRS), Sarbanes-Oxley and Basel II.
Kevin Prone, Director of Business Enterprise at ZEDA comments: âPeople, particularly in smaller organisations, have become emotionally attached to spreadsheets - they come bundled in standard desktop software, appear to do the job, and users feel proud of the macros and special functions they can build into them. However, the problem is that external auditors and anyone new to the business often canât understand how they work and struggle to ascertain how sums are calculated. Plus, one small error is enough to make all the figures wrong, and hence totally meaningless, when trying to get an accurate view as to how the business is performing.â
Prone adds: âAnother worrying trend is companies using spreadsheets to assess business risk. This is a cheap and nasty way to do it - spreadsheets are simply not sophisticated enough to calculate the multitude of threats to an organisation. Again BI tools are more adept at doing this but it must be remembered that not all threats can be calculated using mathematics, and there will always be unforeseen events which can occur, such as we saw with the Buncefield oil depot explosion.â
Prone continues: âRegulators are getting ever tighter in their examination criteria. They want to know how a business arrived at key risk and performance metrics and if this canât be categorically proven, through a period of precise, methodical steps, with a corresponding electronic audit trail then theyâre going to fall foul of the requirements. Modern BI tools do this as a matter or course and are far better at importing data from multiple sources. In addition, they are far more user-friendly than they may have been in the past - a proficient spreadsheet user would be able to get to grips with the fundamentals very quickly. This makes it much easier to deploy BI across the organisation.
âCost and user acceptability are the main reasons the spreadsheet has survived so long. But, if you donât accurately know how your business is performing and canât identify the risks against it then the costs of not meeting the regulators demands will far outweigh the initial outlay needed to acquire decent BI softwareâ, Prone concludes.