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Risk Management
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The aim of spreadsheet risk management is to
improve the quality of the spreadsheets used and thereby reduce
the risks and increase management skills of those risks. Now
some people might ask, and many suggest, that spreadsheet and
spreadsheet programs initiating risk management use should be
limited or banned from the business world. |
Theoretically this is correct. However practically the flexibility
and value for money that spreadsheets and these spreadsheet programs
in risk management provide means that in one form or other spreadsheets
will always exist and therefore programs initiating risk management
can be implemented with the use of specialized spreadsheet software
in risk management.
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By understanding where your risks are and providing
practical solutions with the use of the specialized spreadsheet
programs in risk management, you can mitigate your risk to a more
acceptable level.
The key to risk management is first and foremost to know where
the risks are. You therefore need an inventory of where spreadsheets
are used and in doing so make use of specialized spreadsheet
programs in the field of risk management. Much of the work done
during the Y2K assessments would have focused on where IT systems
exist and with luck they would have documented where spreadsheets
play an important part in determining risks and therefore implement
accurate risk management. From our point of view the high risk areas
are often in divisions or departments where the revenue stream is ad
hoc and there are limited formal IT systems that can help as well as
where the |
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least risk management is
being employed. Departments that are full of professional or
‘expensive’ staff (Chartered Accountants, CPA, CFA, engineers,
actuaries etc) are often prone to significant Excel use and
implementation of risk management. Why? If businesses could develop
IT systems to perform the work they would not need all these
expensive staff members to initiate risk management and relating
activities. So look in your corporate finance departments, new
business developments departments etc.
Depending on the nature of your organisation it may be useful to
have the necessary expert skills applied in effective risk management.
Financial institutions that live off Excel spreadsheets and spreadsheet
programs which carry out risk management activities for the most
part should have a whole department dedicated to this skill set
of risk management. Incorporate them into you Internal Audit or
IT audit departments in order to carry out quick and effective risk
management.
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Excel training section. Go to the
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pages! |
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