Spreadsheets became a staple part of our business management practices since businesses started using digital tools to aid business implementation. While a lot of organizations use spreadsheets for risk management, the important question to ask is What is the risk management cost of using spreadsheets in 2022?
If companies are to be efficient in analyzing risk data, they need to find new ways of manipulating data. For risk management organizations, having real-time data that is used to make decisions is very crucial to delivering organizational goals.
In this article, we will look at the cost of using spreadsheets to manage risks in your organization, and how to mitigate it
Cost of Using Spreadsheets for Risk Management
There are a lot of risks attached to using spreadsheets for risk management, here are some.
Human Error Cost
People that work with spreadsheets have to impute data manually and will often make mistakes either by omission or commission. The human component of using spreadsheets is what makes organizations vulnerable to a risk management cost because an error that is not noticed could be used to build predictive models that will cost the company a financial loss.
Data imputed into spreadsheets are often static data, this means the data is not dynamic and hence does not follow moving trends. Risk management organizations need to be on top of moving trends if they are to make decisions that are at the cutting edge of their industry. Data that is not dynamic is not useful because decisions will be made with stale data. Using spreadsheets for risk management exposes your organization to lags in decision making which could be costly.
With the advent of COVID-19, a lot of risk management companies had to revise how they managed risks as new components arose that were not previously available. Companies that could not adjust their risk management practices were left behind. Having a dynamic data manipulation tool that captures data in real-time is key to being an organization that will thrive in these times.
Security of Data
Spreadsheets have very limited options for security management hence are vulnerable to data loss, and data theft. As customers become more concerned about how their data are used and managed, organizations have learned to adopt systems that are secure and theft-proof. Where an organization still uses spreadsheets for handling sensitive data, they are open to vulnerabilities that may be costly. These vulnerabilities include data theft, loss, and exposure which may damage a company's reputation and attract costly lawsuits.
To make quick decisions as an organization, you need different methods of visualization that enable you to draw insights from data quickly. Using spreadsheets as a risk management tool often limits how much visualization you can create with your data set. Having a Risk Management Information System that provides good visualization capabilities can save your company from making costly decisions.
Collaboration and automation across different cross-functional teams are required for efficiency in running organizations. Using spreadsheets as a risk management tool limits your ability to automate your activities and hence increases the time spent on delivering work which ultimately affects decision making in your organization. A well-automated system will reduce inefficiency, close time lags, and deliver data when needed. Manual processes will also be minimized and hence human error minimized.
Having discussed some of the risk management costs of using a spreadsheet in 2022, it is imperative to help you see how it can be mitigated.
How to Mitigate Risk Management Cost of Using Spreadsheets
To mitigate risk management costs of using spreadsheets, here are some steps you can take
Use a Risk Management Software
Even though your organization may be conversant with using spreadsheets, it is time to retool and rethink what costs your organization continues to bear while using it. The inefficiencies outlined above can be mitigated and removed entirely with Risk Management and Information Software. Taking the bold step to eliminate the cost of using spreadsheets may be the first step to building an organization that will thrive in these times. Ventiv Risk Management Software provides all the tools your organization needs to manage its risks and take timely decisions. With Ventiv, you can remove costly data silos that do not allow for timely decisions, you can also draw out hidden insights, identify problem areas and also measure your results.
Learn More about Ventiv Risk Management Software
Train Your Personnel
It is not enough to have great software, it is also important that your employees understand how to use the software to get great results. Retooling your organization should include training your personnel to understand how to use the software, this ensures that the software is properly deployed to get the result intended.
How to Manage Risks Now
Understanding the need to move away from antiquated processes that cost your organization money and expose you to vulnerabilities is the key to becoming more attuned to how you manage risks now.