Spreadsheets offer users versatile analytical capabilities, excellent presentation options and the flexibility to explore business alternatives or mine data for novel patterns. But this usability is often a challenge to the organization which has a responsibility to itself and its shareholders to ensure its decisions are based on credible data and analyses. The solution so far has been a central control service but this means many spreadsheets are still operated outside of formal controls.
However, control doesn't have to be focused on a central service model. A distributed solution can offer a robust alternative that can be implemented without the need to overhaul business processes and working practices.
Tensions in an organization can be good a thing or a bad thing and it’s a role of management to balance the competing forces that give rise to the tensions. Most modern organizations run recognizing the reality that tensions exist and can be harnessed for the good of the enterprise. Inter-department/division/company rivalries are managed to ensure that those organizational units are kept effective and that the more able people, groups and best ideas prevail.
A classic tension that exists in an organization is that between two modes which, for simplicity will be labeled “bureaucracy” and “creativity”. The processes and procedures devised by the bureaucracy allow an organization operate efficiently, to scale up and out. The ability to be efficient allows a competitive edge, to be able to grow allows the organization to reduce costs because it is able to buy more efficiently, handle more business through existing channels, etc.. but processes and procedures become entrenched. In a constantly changing, competitive landscape it is the creative element that seeks the new idea, undertakes the analysis that looks for change and identifies new opportunities in a way that the bureaucracy cannot. An effective organization needs both structure and flexibility. Without the structure provided by process and procedure the organization cannot grow; without the creative element it cannot survive.
Spreadsheets, but Excel in particular because of its predominance, are a beacon of the bureaucracy/creativity tension. The spreadsheet is a classic creative tool. Excel and the spreadsheets that preceded it, allowed departments, divisions and companies to analyze data like never before, to find better packaging, operate on thinner margins, see the value of a new market. The spreadsheet is a personal tool that doesn’t fit easily into a bureaucratic process. It costs almost nothing to create an analysis in Excel. The analysis can import data of any structure, if only because it can be typed in. The analysis can be presented in high quality reports, with charts and pivot-tables and the right analysis can be very influential.
Controlling spreadsheets
The bureaucracy would like users to implement “systems” to replace Excel. As well as being a valuable tool in the camp looking for new opportunities, and therefore a catalyst for change, Excel workbooks present a genuine threat to the good governance of an organization since the quality of the data and the integrity of the rules used to compute results cannot be assured. The Business Intelligence companies would love to encourage organizations to replace Excel but they can’t. BI systems are expensive; they are rigid because they require a structure that can be foreseen and they need to import volumes of data structured for today’s world. Meanwhile, most of the analyses performed using spreadsheets are never used and replacing them with costly systems is expensive but in many cases they are not cost justifiable.
If you can’t beat it, at least control it. The bureaucracy’s response has been to look to tools that appear to offer central control of the spreadsheet. If the spreadsheet is submitted into a server, it must be under control, right? Well, maybe. The spreadsheets that the bureaucracy cares about are the ones it knows affect decisions today. That is, those decisions which are based on processes and procedures in place today. However the spreadsheets that are going to affect the future of the organization are buried in some department or in obscure skunkworks project. Centralized control misses such spreadsheets even if the impact of the analysis undertaken today will be huge at some point in the future.
The problem isn’t with the desire to exert some control over spreadsheets; after all this is a reasonable objective. It exists in the belief that central, absolutely server-based control is the solution. There are at least two problems with a server-oriented solution. The first is that spreadsheets exist on PCs not on servers. To be effective, the Excel user has to take an additional step and submit each and every spreadsheet to server control. Aside from the question about whether all employees would do this, this centralization approach does require that *every* spreadsheet is controlled or it invites a subjective decision about whether this or that spreadsheet is important or not – a point that might not be clear today. But if every spreadsheet has to be controlled, what happens then when a user wants to create a spreadsheet in a meeting, on a plane, in a hotel room?
The second problem is that central control implies that all consumers of a given spreadsheet have access to, and authorization to use server based information. Information in spreadsheets is very often shared and shared beyond the boundaries of any one server, with supply chain partners for example, external project partners, etc..
The problems of central control are well understood. Credit card companies, long an icon of successful centralization would like to find reliable, secure ways to add intelligence to credit cards so that complete dependence on access to a central server is not required. Why? Because it adds much needed flexibility and would help reduce the costs of building an ever bigger payment authorization system.
An alternative to centralized servers
The benefit of a central, server-based approach trying to control spreadsheets is that it is conceptually simple and so makes it easy to appear to control spreadsheets. But if only the obvious spreadsheets are placed under some form of control, does control really exist or is it an illusion? The very definite down-side is that it requires effort on the part of users to work reliably.
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A more effective mechanism will be to have control built-in to the environment. Imagine if instead of requiring that users login to a server, extract a workbook, work on it and submit it, they just used a workbook with the control taking place invisibly and consistently. Imagine if control is added to a spreadsheet just because a user uses it. Imagine if anyone can see whether a spreadsheet has been approved just by looking at it.
ComplyXL
This is what ComplyXL aims to provide for Excel workbooks.
At least three questions immediately come to mind:
1) How can we see what has changed?
2) How can we report on the status of any given spreadsheet if they are all over the place?
3) Can’t the user just change the status?
ComplyXL provides reporting a tool that allows you to view the changes that have occurred within a workbook at anytime. They also allow a review of the history of the workbook including a history of the changes and any approvals. These tools can be used standalone or they can be used integrated with Windows Explorer so that just by looking at file in Windows Explorer you can see the status of the file. A manager can approve a workbook by clicking on the document and selecting an option. A record of changes and any approvals are recorded within the workbook so that the information travels with the workbook making it available at anytime to anyone that uses the workbook.
ComplyXL isn’t a replacement for a workflow process and ComplyXL doesn’t seek to replace document management. It seeks to ensure that documents entering and leaving document management are inherently controlled. When a workbook is checked out of a document management system, what control is there over that workbook? The user might rename it, change it utterly, use it for a completely different purpose and check it in as a new document. Its history will be lost. With ComplyXL, the history travels with the document itself so cannot be lost.
The history is held within a workbook but in a way that Excel users cannot delete and Excel itself cannot access. The history is encrypted to prevent tampering.
ComplyXL can be implemented on file servers so that documents saved onto a fileserver are controlled automatically. Users do not need to change their patterns of behavior, processes or procedures.
Bill Seddon is Managing Director of Lyquidity Solutions, a leading international financial software company headquartered in the UK. He has worked in the software industry for over twenty years and headed up large development teams both here and in the USA. In 2001 he, along with colleagues, founded Lyquidity. His aim was to develop software that provided tangible business benefits (SOX) at a realistic cost.
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