Enterprise Spreadsheet Management

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Long-time readers will know that I have been taking an interest in spreadsheet management for the last couple of years, and I recently concluded that the products in this market are now sufficiently mature, and diverse, that it was worth researching a full-blown report on the subject (click here for details and a special pre-publication offer), which is now coming close to fruition.

There are a number of different solutions, from various vendors, available within the marketplace. These broadly break down into three categories, though some suppliers extend beyond a single set of capabilities. These categories can be classified as auditor’s tools, control and compliance products, and automation offerings.

Auditor’s tools typically consist of a set of tools, for example to compare versions of a spreadsheet or spreadsheets, to trace the source of a particular value, to look for errors in formulae, to discover dependencies between spreadsheets and between cells, and so on. As stand-alone product suites these are designed for use by both internal and external auditors, the companies providing them are often small, have often been formed by or with help from auditors, and you typically buy on-line (often after a free 30 day trial) for a few hundred dollars.

Control and compliance solutions cover two areas. Put (very) simply there is the monitoring of changes to spreadsheets both for good practice purposes and to comply with regulations such as Sarbanes-Oxley (compliance), and the management of who can make those changes (control). Some products provide compliance only. Prices for products in these areas typically range from 5 to 7 figures dependent on the size of the implementation.

I should point here, for those of you keen on Excel 2007 that SharePoint now provides versioning and similar functionality for spreadsheets as documents but that for compliance reasons you need to track changes at cell level, which Microsoft does not offer.

Note that you can also buy auditor’s tools in conjunction (that is, within the same suite) with control and/or compliance.

Finally, there are automation tools, which are typically much less expensive (usually 5 figures) than control and compliance products. These start from a totally different place. Rather than taking the approach of “it’s broke—let’s fix it”, vendors in this category take the view that however much effort you put into the toolsets already discussed, spreadsheets will continue to be broken and you’ll continue to have to fix them and that an altogether better approach would be to build spreadsheet applications (cash flow forecasting, sales reporting, budgeting and so on) that weren’t broken in the first place. Of course, one way to do this would be to stop using spreadsheets altogether but as this isn’t going to happen then the automation approach is proposed as being the next best thing.

Automation takes the development process for spreadsheets and turns it into a formalised process, just as the development of any other application is formalised. In particular, suppliers tend to have a single master of each spreadsheet which is populated, and customised to the user, in real-time. This eliminates all the copies of spreadsheets that tend to proliferate across the organisation and makes management and control of spreadsheets much easier, while you have a formal development process at the back-end.

Automation tools come with control and compliance functionality built-in. Versioning, for example, is something you would expect in a development environment. Similarly, there is less need for auditor’s tools as testing and debugging are formal parts of the development cycle.

Interestingly, there seems to be more interest in automation tools in Europe than there is in the United States where the focus is so much on Sarbanes-Oxley that many companies are simply focused on a short-term fix; there seem to be more companies over here that have recognised that spreadsheets need to be treated as a corporate resource and need to be managed as such.

The one problem with automation tools is that you can’t use them to discover existing spreadsheets so that you can place them under control and remediate them. What, in my view, is needed is a merger between these different approaches but, unfortunately, there is no vendor offering such a complete solution.