Why Spreadsheets Are A Risk To Your Risk and Assurance Management

Spreadsheets might be familiar, flexible, and free, but when it comes to managing business-critical risk, they could be doing more harm than good.

It’s a striking irony: using a tool known for its vulnerabilities to manage what should be one of the most rigorously controlled functions in the organisation. Yet across industries like mining, transportation, and nuclear energy, spreadsheets remain surprisingly common, not because they’re fit for purpose, but because they’re easy to access. Unfortunately, that ease conceals significant risk.

When spreadsheets are used as the backbone of risk management, they introduce fragility into a process that demands robustness. What starts as a quick fix can quickly become a structural weakness – hard to scale, easy to compromise, and almost impossible to govern effectively.

Risk, by nature, is fluid. It shifts in response to operational activity, environmental conditions, regulatory expectations, and emerging threats. Managing that level of complexity with static, disconnected, error-prone tools doesn’t just fall short – it actively undermines your organisation’s ability to anticipate, respond, and assure.

To understand the limitations more clearly, it’s worth examining the specific ways in which spreadsheets compromise risk effectiveness, from visibility and control to collaboration and compliance.

A Lack of Control Means a Lack of Confidence

One of the most pressing issues is the lack of version control. With multiple copies saved across desktops, inboxes, and shared drives, it’s often unclear which version holds the most up-to-date information. Risk Managers are left navigating a web of filenames like “FINAL_v5_UPDATED” with no audit trail to track changes or verify data integrity. In sectors where regulatory scrutiny is high and risk decisions must be defensible, this ambiguity is unacceptable.

Fragmented Risk Data Across the Organisation

Spreadsheets also fragment risk data across the organisation. Each department may maintain its own risk register or mitigation log, leading to silos and inconsistencies. This decentralised approach obscures the bigger picture, making it difficult to identify cumulative risks or recurring control failures. In a transport network, for example, a lack of consolidated risk insight across regions could mask systemic issues that only emerge when viewed enterprise-wide.

Manual Errors with Major Consequences

Then there’s the matter of accuracy. Spreadsheets are notoriously prone to human error. A single misplaced formula or accidental overwrite can distort an entire risk profile. These aren’t theoretical risks – organisations have suffered significant operational and reputational damage due to basic spreadsheet mistakes. When managing safety-critical environments, even the smallest error can have disproportionately large consequences.

Collaboration That Slows You Down

Collaboration is another sticking point. Risk management is a cross-functional activity that requires timely input from multiple stakeholders. Yet spreadsheets are ill-suited to this reality. They don’t support real-time updates, controlled access, or collaborative workflows. The result is a lag in communication, duplicated efforts, and frustration for the teams who rely on current, accurate risk data to make informed decisions.

Poor Visibility, Poor Decisions

Reporting is similarly limited. While spreadsheets can store data, they don’t provide analysis. They lack the dynamic dashboards, real-time alerts, and visualisation tools needed to surface trends, track progress, or drive action. For senior leadership or regulators looking for assurance that risk is being actively managed, static tables simply don’t cut it.

Security That Simply Isn’t Secure

Security presents another challenge. Spreadsheets are easily shared, duplicated, or edited – often without trace. This opens the door to data breaches and unauthorised access, creating compliance headaches and potentially exposing sensitive operational information. In sectors such as government or nuclear energy, the implications of unsecured risk data can be profound.

Disconnected from the Business It’s Meant to Support

Perhaps most critically, spreadsheets operate in isolation. Risk doesn’t. Without integration into business systems – such as maintenance, incident management, audit, or compliance, risk processes become disconnected from the operations they’re meant to support. This limits both the effectiveness and the influence of risk management across the enterprise.

It’s Time to Rethink the Tools

The conclusion is unavoidable. Spreadsheets were never designed to support the complexity, scale, and strategic importance of enterprise risk. Relying on them today is not just inefficient… it’s risky in itself.

Modern Risk Management Software addresses these challenges head-on. It provides the visibility, control, and integration needed to manage risk as a strategic asset rather than an administrative task. Moving beyond spreadsheets isn’t just a technical upgrade – it’s a fundamental shift towards more intelligent, resilient risk practices.

And ultimately, the biggest risk isn’t the data in your spreadsheet. It’s continuing to use one at all.