Spreadsheet risk: is your asset management potentially exposed?

Now more than ever, Australian and New Zealand organizations are looking for ways to work smarter, especially when it comes to managing property assets. Many businesses are looking closely at how they operate, and what changes need to be made to face the ‘new normal’ presented by Covid-19. There will be greater emphasis on making use of quality data when investing wisely in assets and their management.

Asset management tools and processes are adapting to the modern, digital era, but a surprising number of organizations are still using spreadsheets instead of harnessing the kind of technology that's needed for complex asset structures. Why? Because they're simple to use and all the data is there - even if that data is not accurate and it’s not easy to find the answer you’re looking for.

It's also an evolutionary thing; for so many years now, spreadsheets have been used to create asset registers. And they grow over time, because spreadsheets are almost limitless. What started out with 10 assets grows to 100, then 1000, and the spreadsheet continues to be used to manage large asset registers because they are so easy to use.

Not only that, but often spreadsheets are the mechanism by which data arrives into an organization. For example, an organization completes a new building, and receives the handover material in spreadsheets and PDFs.

Spreadsheets are simple, but they present complex risks

Like all legacy systems, that are having to cope with demands above and beyond what they were designed for, the use of spreadsheets for asset management comes with a number of risks. The main ones include:

Data integrity

Without a rules layer sitting on top of it, there's nothing stopping people from adding 'rubbish' data to the asset register, such as:

  • Inputting numbers into text fields

  • Spelling errors and using different names for the same asset

  • Corrupting data through incorrect copying and pasting

It takes only a minimal amount of this kind of data being entered before the integrity of all the data has been compromised. What happens then is a reduction in confidence in that data, and in the outputs. When data becomes compromised, organizations will very quickly lose the confidence needed for effective decision making.

Knowledge silos

When people use spreadsheets, they tend to develop their own links, formulae, charts and even macros, creating a single person dependency. When they get sick, go on holiday, or leave the organization, their knowledge of that automation goes with them. If that knowledge isn't passed on, it can cause severe problems; specifically, a reduction in the quality of data, especially when spreadsheet macros require editing. The asset management process should never be reliant on a spreadsheet that's dependent on an individual with multiple manual touch points.

Anyone who plays a key role in asset management should be able to go on holiday, fall ill or resign, and the process can still continue. It’s a mistake to rely on one individual and their spreadsheet – to have that single person dependency - when it comes to asset management, because most organizations have an obligation to provide reliable information on demand to their various stakeholders.

Not only that, but people's time is being wasted trying to decrypt a spreadsheet, and recover data and information, when they should be focusing on more high-value tasks.

"I have literally seen this happen again and again," says David Long, General Manager of SPM Assets New Zealand. "Organizations have these spreadsheets that hold all their asset information, but they can't get meaningful data out, because it's either corrupt or hidden away. They inevitably get trapped in an ongoing data improvement loop."

Security

While security layers can be built into spreadsheets, they require a fairly high level of knowledge and sophistication. And if certain areas of the spreadsheet are password protected, organizations run the risk of not being able to access it if the person with the password is absent. In a nutshell: spreadsheets are easy to corrupt, and difficult to protect.

There is also the security exposure of individuals emailing spreadsheets around an organization. This can lead to the inadvertent release of sensitive data to outside recipients. Not only that, but configuration control becomes an issue when spreadsheets are emailed around an organization. What happens then is multiple versions of the spreadsheet are created, with no configuration control.

 

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Subject to error

A study conducted by Forrester Consulting and Incisive Software found that among manager-level and above, more than a third of respondents believed that spreadsheet risk was not something to worry about.

"Spreadsheet risk is real — and many frontline workers recognise this," said a report that accompanied the survey. "But C-level management are making decisions based on spreadsheet data assumed to be accurate, but that can contain errors."

It used to be that these inaccuracies were largely the result of data being inputted manually, but other factors contribute as well, such as cutting and pasting the wrong information into multiple cells. Another study found that:

  • 90% of spreadsheets with 150 rows or more contain errors

  • 94% of shared spreadsheets contain errors

What that means is that the resulting data is inaccurate, which causes a chain reaction, giving all stakeholders the wrong asset information - information they'll be using to make critical decisions around asset management.

Moving to asset management software - how hard is it?

Often the decision to move to asset management software occurs when an organization realises the value of robust asset data and the risk of data corruption. They realise they aren't able to rely on the data for decision-making which means their decisions won’t be effective for maximising asset use and reducing waste.

When this happens, one of the first steps will be to 'cleanse' that data. In other words, you start as you mean to go on - with high-quality, high-integrity data that is in itself an asset. In addition to the number of benefits that come with using an asset management solution, there's an unintended benefit of having all your data 'cleaned'. Although this process can take time - depending on the complexity of the data and how much there is of it - it's not a difficult one but it does require focused and dedicated resources.

If an organization does have well-structured and uncompromised data, then the move is a simple one. An automated process is run over that data, which is then aligned with the systems configuration, and loaded into the system - and the job is done.

When an organization is considering implementing an asset management system, there are two considerations they need to keep in mind:

  1. Business requirements - one of the first things the solution supplier will want to identify are the organizations business needs. "We don't start with the data," says David Long. "We want to learn about the business, levels of service standards, their stakeholders, their strategies, and the information requirements. And of course, we learn about their assets and how they contribute to the services the organization provides."

  2. Information - compliance, regulatory, budgetary, legal, forecasting, projects - this is all required to support an organization's business processes.

Moving to asset management software is a structured process, and an iterative one. It's best done in stages - not all at once - so that any problems can be identified and resolved at the outset rather than further down the track.

Now is the time to remove the risks and challenges spreadsheets present. Organizations need to focus on how to harness technology to streamline their asset management processes so they can make the best and most effective decisions around them. Maximising asset use and minimising waste is going to become increasingly important as we navigate the Covid-19 era, and investing in asset management software that ensures you have the highest-quality data available is the way to achieve that.