Many organizations have resisted automating their risk management practices. It’s comfortable to maintain the status quo – often a combination of spreadsheets, emails, and internal drives – to manage all facets of risk, including contractors. Unfortunately, there are several trade-offs.
- Spreadsheets are Error Prone
Spreadsheets are created by people, and people make mistakes. Whether the document lives on one manager’s computer or it’s saved on a company-wide server, any user can open a spreadsheet file and make changes, introducing unreliable or irrelevant data. Without oversight, errors creep in. Even leaving off an extra 0, turning a $1000 line item into a $100 line item can impact your ability to make appropriate decisions.
- Data Integrity is Suspect
When data is accurate, stakeholders can make decisions to protect the organization from financial, reputational, or regulatory risk. In spreadsheets, however, where formulas and links are easily deleted or changed by common actions like cutting and pasting- data accuracy is not guaranteed. When working with large datasets and/or performing complex calculations, this is especially true.
- Manual Work is Abundant
A spreadsheet requires manual updates, which are both time consuming and inefficient. This can lead to version control problems or an outdated spreadsheet that isn’t updated regularly. In other cases, in which only one person updates a spreadsheet, others may not understand the format intuitively, or they may lack access. But the biggest challenge occurs when the work to update the spreadsheet becomes cumbersome and arduous, and it takes more time to manage the web of spreadsheets than to do the valuable work associated with its data. Contrast this with automation and the difference is considerable.
- Data is Isolated and Less Meaningful
Risk management is best achieved when it has an enterprise-wide focus. Yet organizations that work in spreadsheets often work in departments where each team functions independently, managing their own data and analysis. However, cross-functional teams can help ensure numerical discrepancies are caught when they occur, so errors don’t slip through the cracks. What’s more, collaboration ensures that the data is understood to mean the same thing across the organization.
- Scaling up is a Challenge
While a spreadsheet can be a useful tool for a smaller project, it doesn’t scale well. Larger projects mean more people, complicated risk metrics and more complicated spreadsheets. Unlike digital management systems, spreadsheets also don’t seamlessly integrate other components, such as permits, contracts and compliance documentation, so those pieces are harder to monitor and incorporate into the decision-making process.
- High-level Analysis is Nearly Impossible
For a superficial review of the data, a spreadsheet is perfect. But when it comes to performing a detailed analysis or finding hidden patterns, a spreadsheet won’t cut it. Not only do spreadsheets become less reliable when performing complex calculations, but the analyst will need to spend more time with the data because the spreadsheet doesn’t have the right functionality to collate, analyze and report the data on its own.
It takes seconds to introduce a single error in a spreadsheet. Tracking down that error can take a significant effort – time you may not have. Through automated system alerts, a digital solution can highlight problems before the ripple effects drag the entire project off course. Data then becomes more reliable and easier to manage over the project lifecycle. As manual tasks are eliminated and collaboration is enhanced, the digital solution leads to even greater efficiencies across the organization.