Danger – Too Many Spreadsheets Ahead

At Enterprise Resource Consulting, after we achieving a thorough understanding of how our clients business operates, we begin the process of guiding them through the ERP selection process. Unfortunately, because the legacy system is inadequate, we often see that the business relies heavily on Excel spreadsheets. In these instances, a major part of the ERP selection and implementation process is replacing the spreadsheets with solid ERP reporting.

Why is that so important? There have been a number of studies that demonstrate that almost ninety percent of spreadsheets contain errors that invalidate their results. Something as simple as copying a formula to too few cells, means that a total is wrong. The European Spreadsheet Risks Interest Group, a consortium of professionals, researchers, and academics, holds a yearly conference to discuss the spreadsheet’s inherent dangers to organizations. Their website shows that “research has repeatedly shown that an alarming proportion of corporate spreadsheet models are not tested to the extent necessary to support directors’ fiduciary, reporting and compliance obligations.” You may wish to view an article in CIO magazine which show some of the more extreme problems this over-dependence has caused. (http://www.cio.com/article/2438188/enterprise-software/eight-of-the-worst-spreadsheet-blunders.html)

Let’s look at some of the other dangers of over-dependence on Excel.

When each department has their own spreadsheet for customers or inventory, for example, which occurs more often than not, consolidating and analyzing the data becomes problematic. When considering that most spreadsheets contain errors to begin with, consolidation can be close to impossible to achieve.

As users email spreadsheets back-and-forth to each other, there may be several different versions of “reality”. A supervisor can have an extremely challenging time in that situation.

Another danger is that with these many versions and iterations floating around the office, over time, email servers can become overtaxed. Some of the spreadsheets may even become too large to email.

Also, in the situations above, data security becomes a genuine concern for senior management.

There’s no substitute for having all of the pertinent business data on a single ERP system. Here at ERC, we are strong proponents of utilizing best practices to transform a business from a legacy system plus spreadsheets, to a new, cohesive ERP system.

For more on this, you may contact Enterprise Resource Consulting at http://www.EnterpriseResourceConsulting.com

 

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