When does a spreadsheet become an application?

Spreadsheets have been an integral part of business practice for more than two decades. Their influence has grown ?hand in hand with the success of the personal computer but therein lays the main downside of spreadsheet usage. When does a spreadsheet become a corporate liability rather than a personal productivity tool and what can be done to manage the risks?

Such is the pervasiveness of spreadsheets in business that there probably is not an organisation in the world that does not rely to some extent on spreadsheets. Their introduction in the early eighties was an instant success as individuals found that they could pave over the cracks in established business processes by creating spreadsheets. The results were instantaneous and best of all the spreadsheet was a private affair ? a development that could be completed out of the gaze of the IT department or anyone else. In fact, Forrester Research in 2003 points to around 55% of global companies relying on spreadsheets for analysis and reporting. So, spreadsheets are truly liberating and have allowed businesses to quickly develop critical application support especially where no readily available applications can be purchased off the shelf. But as everyone knows, spreadsheets can also represent a serious threat. Unnoticed errors in logic and inadvertently overwritten formulae are just two of the conditions that can give rise to serious adverse consequences. Thankfully, many mistakes are spotted early or contained within the boundaries of the authoring company but on many occasions the problem ?escapes into the public domain and can cause serious financial loss or reputational damage. These problems are only too familiar to David Jessop and David Tapnack of PricewaterhouseCooper who urge the proactive management of business critical spreadsheets arguing that having appropriate developmental controls around spreadsheets can be just as important as having controls over the development of any other IT applications. In practice this means that it is necessary to establish a control framework so that spreadsheets are developed according to appropriate standards laid down by the company. This could govern the way that the requirements are captured and the manner in which the spreadsheet is structured, built and documented together with a proper assessment of data requirements. An adequate specification for the spreadsheet model, user instructions, data descriptions and a statement of key limitations helps to safeguard the organisation against inappropriate use. Minimum standards such as these also provide the basis for other personnel to maintain the spreadsheet should the original author leave the company. Source and full article: www.fsn.co.uka>