In recent years the spreadsheet management industry has flourished, fuelled by heightened awareness of financial risk and the ever burgeoning weight of regulatory compliance. Readers of FSN are aware of spreadsheet risks, yet business critical spreadsheets continue to permeate all business processes and industries. But not withstanding the risks we cross our fingers and continue our love affair with spreadsheets. So what can be done to contain the risks and identify errors before they become financially damaging or dent business reputation? Gary Simon, FSN’s managing editor takes a brief look at Apparity a new generation of spreadsheet management tool aimed at spreadsheet-bound processes.
Since Apparity represents the latest thinking in spreadsheet management it is probably worth revisiting some of the history of spreadsheet management and to take stock of where we have got to. Historically, when it came to spreadsheet risk, the minimum level of defense was to insist on spreadsheet development/documentation standards together with thorough testing and peer review. But such measures went against the grain for most users – after all, spreadsheets were personal productivity tools. In reality, few organisations were able to sustain documentation standards – and neither did they have the time or the budget to oversee every material spreadsheet.
So a new industry of software tools was spawned which automatically crawled over spreadsheets and could determine whether formulae had been over-written by data, vital assumption cells had been changed without authority or could compare newer versions with predecessor versions. Initially this was done on isolated cases but over time specialist vendors were able to check thousands of nominated spreadsheets, reconstituting earlier versions of critical spreadsheets if required.
More recently the industry added alerts and workflow functionality so that management can be alerted to unusual changes and spreadsheet results outside of expected ranges, allowing them to follow up errors and risky situations before they spiraled into a full blown crisis.
While this is all good stuff the industry generally failed to recognize that spreadsheets do not work in splendid isolation from each other. The power vested in Excel, allied to practically unlimited disk storage and processing power meant that whole applications were developed using spreadsheets – not just one spreadsheet but many spreadsheets linked together across the organisation. Nowhere is this more visible than in the finance function.
Take for example, the many mid-sized companies who think nothing of using spreadsheet templates to collect budgets, forecasts and plans from hundreds of budget holders. Or consider the financial reporting process in which spreadsheet ‘front ends’ are used to capture monthly actuals for consolidation in a master spreadsheet in the centre.
So how do you exert control over spreadsheets when they belong to a process? It’s a problem familiar to Gavin Spencer and Subash Kalbarga, the founders of Apparity, Inc. They recognized that the need for organisations to manage and secure their spreadsheets was rooted in more than just simply monitoring and reacting to activity within individual spreadsheets. In today’s world of greater compliance and regulation spreadsheet-based applications needed to be managed in the context of the processes that they were a part of.
So when Spencer and Kalbarga set up Apparity, Inc., a privately owned North Carolina company, in 2009 –their vision (developed a couple of years earlier) was to create a technology that they delivered all the functionality of the current industry players but to take spreadsheet management and compliance to the next level.
The first step in achieving that vision was to move away from the dependency on “shared drives”. Shared drives, as the name implies is where organisations tend to group all of their material spreadsheets. But shared drives are not completely secure and limit users to employing folders as the principal mechanism for managing and organizing spreadsheets. Neither does a shared drive reflect the way that spreadsheets applications work in practice.
Apparity tools are available with a pane in the spreadsheet
Take for example a group consolidation application across 20 reporting entities in 5 different countries. In these circumstances the spreadsheets that make up the process span multiple folders and locations – so Apparity believed that any new technology must allow the user to be able to group spreadsheets by their respective processes regardless of where the spreadsheets are stored.
Finally, because the solution is focused on spreadsheets bound together by a process, it must also be able to track all changes across all spreadsheets within that specific process, again regardless of where they are stored – so that if a user wishes to restore any one spreadsheet back to any prior version the technology should also be able to restore any or all of the other connected spreadsheets in that process back to that same moment in time. This ‘synchronized restore’ capability is central to the Apparity solution. This combination of a completely secure storage environment with the management of spreadsheets defined by their processes rather than where they are saved represents a very different and potentially more productive approach.
Apparity “Synchronized Restore” across linked spreadsheets in a process
So where have Apparity got to? Well around a year ago Apparity completed its first 6 month development cycle and in October 2010 launched Apparity Prefect and Apparity Auditor on to the market. Priced at between $20,000 and $40,000, (depending on the number of users), Apparity says that its product is designed to install and be production ready in less than 2 days. End user training is typically no more than 4 hours, they say.
In October and December 2010 Apparity signed its first two beta customers, a $1.7 Billion Healthcare organisation and a $2 Billion Public Retail company. Both companies have critical spreadsheet-bound applications that need to align with the demands of the latest HIPPA and Sarbanes compliance regulations.
Apparity faces stiff competition from the likes of companies such as ClusterSeven, Lyquidity and Prodiance, but its messaging is distinct and the prospect of managing applications rather than individual spreadsheets will resonate with many organisations. It is early days for the company which is entering the market with an aggressive partner growth strategy, but the early signs are that this is going to be a powerful contender. FSN will watch this vendor with great interest.