Reducing Risk in End User Computing / User Developed Applications

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There is no doubt that business critical Excel spreadsheets and MS Access databases (collectively called End User Computing - EUC - or end User Developed Applications - UDAs) create operational risk, as shown in a long list of publicly disclosed errors, maintained by the European Spreadsheet Risk Group []. These range from billion dollar failings at financial institutions to much smaller losses in local government. Of course, many similar loss events never become public.

This history begs the question as to why Excel spreadsheet risk has remained un-managed for so long, despite the long-standing existence of a variety of spreadsheet risk and spreadsheet audit technologies. The reality is that these first generation tools come with significant limitations that make them impractical in operational environments:

  • Slow desk top analysis.

  • Detecting the risky content, logic and changes in large Excel spreadsheets requires heavy-duty processing power that will tie up desk top machines for long periods of time. Not surprisingly, users avoid such tasks when business pressure increases. Complex spreadsheets also overwhelm the data presentation capabilities of tools that have been designed for simpler problems. Both limitations allow risk to slip through.

  • Isolated desk top and server components.

  • Spreadsheet risk management processes must be independent of the specific spreadsheet user in order that they can be consistently maintained across a process or a department. Solutions which comprise desktop and server components struggle to deliver central reporting to maintain this consistency. While they may improve individual user behaviour they do not establish reliable risk reduction.

  • A confusion between audit and risk management.

  • An audit trail ensures that a record of activity is available to explain how an event occurred, even if it is slow to interrogate. By contrast, active Excel spreadsheet risk management requires that anomalies are highlighted at speed in order that losses may be prevented. Given the high volume of spreadsheet activity in complex businesses, the ability to filter changes and provide focused exception reports is critical to reducing operational risk.

  • There are other things that can go wrong.

  • It is often assumed that spreadsheets only go wrong when erroneous changes are made. The reality is that stale data caused by lack of updates can be just as problematic. An effective operational Excel risk management solution must therefore be able to detect the absence of activity down to a cell level as well as the presence of erroneous activity.

    ClusterSeven is a Second Generation EUC/UDA Risk Management Solution that was built from the ground up to solve all of these inadequacies and ensure that your Excel spreadsheets and other EUC/UDAs will be protected against the fullest possible range of operational risk.

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The Benefits of EUC Management?

Shares in the Irish drinks group fell 15 per cent

Mortgage portfolio in error by over $1billion

$24m hedging error