Despite the bells and whistles offered by many enterprise risk software programs, companies still rely on Excel spreadsheets.
It’s often true in these high-tech times that people over-equip for most tasks. And while enterprise risk management seems is a ripe area for a surfeit of firepower, many companies take a more pragmatic approach: they manage ERM with Excel.
This fact was evident at a recent NeuGroup ERM peer group meeting, where about 80 percent of respondents in a pre-meeting survey said Excel was the risk management tool they used most. It should also be noted that nearly half of those companies used some sort of add-in, including other Microsoft software like MS office, Sharepoint, Archer or a component of their ERP.
The use of Excel for managing risks could be chalked up companies just getting a handle on ERM and not realizing there are better tools out there. It could also be that, like a noted British survey that found people are more likely to get divorced than switch bank accounts, people like what they have and can’t be bothered switching.
But there’s a simpler reason, according to the ERM peer group members. Many ERM practitioners feel that the programs out there are too new to and it’s not clear to anyone what’s needed in a system. Perhaps more importantly, the general ERM model is to get ERM thinking embedded throughout the organization and for the core ERM team to reduce its role over time. This would run counter to a big, centralized system. That leaves Excel. It’s a simple but powerful tool; it’s flexible and has been around for ages. In the end, it adds a lot of value at a low cost—which is one way of defining the ERM paradigm’s principal goal.