M&S Error a Stark Reminder of the Risk Posed by EUC Applications
News last week that Marks and Spencer (M&S) had inadvertently issued inaccurate company results due to an error in a spreadsheet is a stark reminder of the very real business risk that using unmonitored and uncontrolled end user computing (EUC) applications such as Excel spreadsheets, databases and financial modelling tools present to corporates. In this particular case, perhaps the reputational damage and embarrassment is compounded by the fact that the ‘double-counting’ in the spreadsheet led M&S to say that sales had risen by 1.3% in the three months to July, when in reality they had fallen by 0.4%.
The use of spreadsheets is ubiquitous in the business world – Microsoft Excel for financial calculations is pervasive and a single inconsistency or discrepancy in a spreadsheet can proliferate the entire EUC application landscape in an organisation, potentially resulting in losses or misstatements in the billions of pounds – notwithstanding the additional effects such as regulatory fines, the loss of customers and reputational damage for years to come.
Due to the number of EUC applications in use, manual supervision and management of these complex files for data quality and integrity of data is impossible. Often, the knowledge of their existence and the information they contain is poor.
Effectively and securely managing EUC applications to mitigate business risk and financial losses is essential. However, one of the major barriers to the adoption of EUC application management technology is cultural. It is seen by IT managers as perpetuating the use of uncontrolled and inadequate technology – when broader enterprise financial systems already exist. The problem with these business systems is that they don’t provide all of the functionality that users require for their day to day jobs in numerical manipulation, analysis or problem solving. And no sooner are these business systems updated the business requirements move on. As such users turn to the tried and tested, pervasive, Microsoft Excel spreadsheet to fill this gap in requirements.
Organisations will do well to learn from this M&S debacle. It’s pertinent to note that EUC application management supports compliance too. Weigh up the cost of deploying an EUC management solution versus the financial cost of non-compliance and the long-term reputational damage, surely there isn’t much to consider?
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