I recently read the article “Goodbye Spreadsheets, You’ve Had a Good Run”, by Mary Long.
The article highlights something I have been talking about with risk managers for a number of years: the spreadsheet is a nice tool, but it is dated and there are much better solutions when it comes to managing risk management programs and processes. In fact, spreadsheet technology dates back to the late 1970’s when Daniel Bricklin and Bob Frankston co-authored VisiCalc software, making it the first “killer app” for personal computers. Before Bricklin and Frankston, there were spreadsheet applications that ran on mainframe systems (remember them??) dating back to the early 1960’s.
In a recent study of technology solutions used by risk managers, conducted in mid-2016 by Redhand Advisors, it was shown that over 70% of risk managers surveyed reported that their technology solution for risk management was spreadsheets. This finding indicates that a significant majority of risk managers are satisfied with using technology that was mature when their parents were in high school!
As risk managers, we want and need to move our profession forward, both to address the risks inherent and developing in business, but also to improve our standing as contributors to the success of our enterprises. We don’t make calls on rotary phones and we don’t listen to disco on 8-track cartridges or watch movies on Betamax tapes; why in the world do we continue to lean on spreadsheets as our go-to technology?
Spreadsheets do a lot of things well and will continue to have a place in the risk manager’s toolkit. What they do not do at all well is relational analysis of data and information visualization. Enter the Risk Management Information System: a single repository for all of your risk data elements (careful here, this is not just claim data), business elements and risk-related documents. Information can stream into these modern, purpose-built systems from external datasets such as accounting systems, enterprise resource planning systems or human resource information systems, while at the same time, sharing key risk data to those that need it for operational and financial decision-making. The same data from a single consolidated source. What a concept!
I had a CFO earlier in my career that referred to the RMIS system as his “one version of the truth”. It provided a single set of data that could be optimized for use across the company in finance, operations, human resources, EH&S and many other areas. The dashboarding functionality allowed different parts of the organization to visualize the data elements that they needed to make real-time decisions in a way that made the most sense to them while using a common lexicon throughout the organization, a key consideration when common understanding of the dynamics of risk is so important.
For the risk manager that aspires to have their programs taken seriously and valued by their organizations, the spreadsheet is no longer the go-to tool. Serious risk managers need serious tools to make serious contributions. In today’s business environment, if you aren’t pushing forward on the use of tightly-focused technology solutions, you are moving backward.