Server Application Solutions – Don’t Let Spreadsheets Hold Your Business Back

The problems and limitations of spreadsheet-based systems are well documented. That’s why we at Denizon have come up with ways to give you freedom from these UDAs (User Developed Applications). With the server application solutions we offer, your IT and financial system can be:

Totally devoid of spreadsheet risks

By getting rid of spreadsheets, you also get rid of broken links, incomplete range selections, accidental deletion of cells, incorrect copy-pasting and other spreadsheet-related slip-ups.

In their place, we offer a faster but more robust and reliable centralised system. Errors are substantially minimised by built-in controls, while inconsistencies are avoided because changes made by one user are automatically reflected on the data delivered to others.

Built-in business-critical controls

Some solutions are designed to add control features on spreadsheets. We believe that such features can only be truly effective in today?s fast-paced and dynamic business environment if they are already inherent in the design of the IT solution; not something that’s merely added as an afterthought.

For one, while these band-aid solutions may succeed in adding controls, they don’t get rid of the slow, tedious, and time-consuming processes that accompany spreadsheet systems.

Less prone to fraud

Weak controls and the absence of reliable audit trails are two factors that encourage fraudsters to prey on spreadsheet systems.

With our server-based applications solutions, your data is protected by user-based access controls that allow users to see only the information that they’re supposed to see and modify data which they have been granted sufficient access rights to.

Our solutions also produce clear audit trails for painless tracking, viewing and searching of user-entered changes. This will enable you to pinpoint who changed what, as well as where and when the changes were made.

Ready for regulatory compliance and beyond

When better controls are enforced, financial reports become more reliable. That should give your company the edge it needs to easily comply with SOX as well as other regulations and, as a consequence, build stakeholder confidence.

And because our solutions can churn out accurate reports for regulation compliance at shorter turnaround times than spreadsheet systems, you end up saving more man-hours. That should give your team more time to innovate, analyse information and deliver goods or services to your customers faster.

Designed for agility

Let’s face it. Spreadsheets, which used to serve as nifty ad-hoc business tools, are no longer suitable for agile organisations. When faced with the demands of rapidly changing markets and dynamic environments, spreadsheets can instead slow a business down.

Multi-dimensional reports, dashboards, report filters, drill-downs, collaboration and automated reporting, budgeting and forecasting capabilities are needed for gaining insights and making fast critical decisions.

Sad to say, your trusty spreadsheet application is not designed to provide these features. Hence, it’s time to move on to the type of solutions that are.

Our solutions can transform your IT and financial systems and make them better-equipped to meet the demands of today?s rapidly changing economic environment. With features designed for agile businesses, our solutions can help you tackle change with ease.

Automatic consolidation eliminates errors and wasted time caused by tedious copy-pasting of data and linking of cells.

Better collaboration capabilities allows team members to bring their heads together for planning, budgeting and reporting even while on the go.

Mobility support enables users to input data or retrieve information through their wireless mobile devices.

Superior sharing features ensures that everyone is exactly on the same page and viewing real-time information.

Dashboards provide insightful information at-a-glance through KPIs, graphs and various metrics.

Drill-downs enable users to investigate unusual figures and gain a better understanding of the details that contribute to the big picture.

Easy to learn interfaces allow your organisation to cope with fast personnel turnaround or Mergers & Acquisitions.

More Spreadsheet Blogs


Spreadsheet Risks in Banks


Top 10 Disadvantages of Spreadsheets


Disadvantages of Spreadsheets – obstacles to compliance in the Healthcare Industry


How Internal Auditors can win the War against Spreadsheet Fraud


Spreadsheet Reporting – No Room in your company in an age of Business Intelligence


Still looking for a Way to Consolidate Excel Spreadsheets?


Disadvantages of Spreadsheets


Spreadsheet woes – ill equipped for an Agile Business Environment


Spreadsheet Fraud


Spreadsheet Woes – Limited features for easy adoption of a control framework


Spreadsheet woes – Burden in SOX Compliance and other Regulations


Spreadsheet Risk Issues


Server Application Solutions – Don’t let Spreadsheets hold your Business back


Why Spreadsheets can send the pillars of Solvency II crashing down

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How to Reduce Costs when Complying with SOX 404

Section 404 contains the most onerous and most costly requirements you’ll ever encounter in the Sarbanes-Oxley Act (SOX). In this article, we?ll take a closer look at the salient points of this contentious piece of legislation as it relates to IT. We?ll also explain why companies are encountering difficulties in complying with it.

Then as soon as we’ve tackled the main issues of this section and identify the pitfalls of compliance, we can then proceed with a discussion of what successful CIOs have done to eliminate those difficulties and consequently bring down their organisation’s IT compliance costs. From this post, you can glean insights that can help you plan a cost-effective way of achieving IT compliance with SOX.

SOX 404 in a nutshell

Section 404 of the Sarbanes-Oxley Act, entitled Management Assessment of Internal Controls, requires public companies covered by the Act to submit an annual report featuring an assessment of their company?s internal controls.

This ?internal control report? should state management’s responsibility in establishing/maintaining an adequate structure and a set of procedures for internal control over your company?s financial reporting processes. It should also contain an assessment of the effectiveness of those controls as of the end of your most recent fiscal year.

Because SOX also requires the public accounting firm that conducts your audit reports to attest to and report on your assessments, you can’t just make baseless claims regarding the effectiveness of your internal controls. As a matter of fact, you are mandated by both SEC and PCAOB to follow widely accepted control frameworks like COSO and COBIT. This framework will serve as a uniform guide for the internal controls you set up, the assessments you arrive at, and the attestation your external auditor reports on.

Why compliance of Section 404 is costly

Regardless which of the widely acceptable control frameworks you end up using, you will always be asked to document and test your controls. These activities can consume a considerable amount of man-hours and bring about additional expenses. Even the mere act of studying the control framework and figuring out how to align your current practices with it can be very tricky and can consume precious time; time that can be used for more productive endeavours.

Of course, there are exceptions. An organisation with highly centralised operations can experience relative ease and low costs while implementing SOX 404. But if your organisation follows a largely decentralised operation model, e.g. if you still make extensive use of spreadsheets in all your offices, then you’ll surely encounter many obstacles.

According to one survey conducted by FEI (Financial Executives International), an organisation that carried out a series of SOX-compliance-related surveys since the first year of SOX adoption, respondents with centralised operations enjoyed lower costs of compliance compared to those with decentralised operations. For example, in 2007, those with decentralised operations spent 30.1 % more for compliance than those with centralised operations.

The main reason for this disparity lies in the disorganised and complicated nature of spreadsheet systems.

Read why spreadsheets post a burden when complying with SOX and other regulations.

Unfortunately, a large number of companies still rely heavily on spreadsheets. Even those with expensive BI (Business Intelligence) systems still use spreadsheets as an ad-hoc tool for data processing and reporting.

Because compliance with Section 404 involves a significant amount of fixed costs, smaller companies tend to feel the impact more. This has been highlighted in the ?Final Report of the Advisory Committee on Smaller Public Companies? published on April 23, 2006. In that report, which can be downloaded from the official website of the US Securities and Exchange Commission, it was shown that:

  • Companies with over $5 Billion revenues spent only about 0.06% of revenues on Section 404 implementation
  • Companies with revenues between $1B – $4.9B spent about 0.16%
  • Companies with revenues between $500M – $999M spent about 0.27%
  • Companies with revenues between $100M – $499M spent about 0.53%
  • Companies with revenues less than $100M spent a whopping 2.55% on Section 404

Therefore, not only can you discern a relationship between the size of a company and the amount that the company ends up spending for SOX 404 relative to its revenues, but you can also clearly see that the unfavourable impact of Section 404 spending is considerably more pronounced in the smallest companies. Hence, the smaller the company is, the more crucial it is for that company to find ways that can bring down the costs of Section 404 implementation.

How to alleviate costs of section 404

If you recall the FEI survey mentioned earlier, it was shown that organisations with decentralised operations usually ended up spending more for SOX 404 implementation than those that had a more centralized model. Then in the ?Final Report of the Advisory Committee on Smaller Public Companies?, it was also shown that public companies with the smallest revenues suffered a similar fate.

Can we draw a line connecting those two? Does it simply mean that large spending on SOX affects two sets of companies, i.e., those that have decentralised operations and those that are small? Or can there be an even deeper implication? Might it not be possible that these two sets are actually one and the same?

From our experience, small companies are less inclined to spend on server based solutions compared to the big ones. As a result, it is within this group of small companies where you can find a proliferation of spreadsheet systems. In other words, small companies are more likely to follow a decentralised model. Spreadsheets were not designed to implement strict control features, so if you want to apply a control framework on a spreadsheet-based system, it won’t be easy.

For example, how are you going to conduct testing on every single spreadsheet cell that plays a role in financial reporting when the spreadsheets involved in the financial reporting process are distributed across different workstations in different offices in an organisation with a countrywide operation?

It’s really not a trivial problem.

Based on the FEI survey however, the big companies have already found a solution – employing a server-based system.

Typical server based systems, which of course espouse a centralised model, already come with built-in controls. If you need to modify or add more controls, then you can do so with relative ease because practically everything you need to do can be carried out in just one place.

For instance, if you need to implement high availability or perform backups, you can easily apply redundancy in a cost-effective way – e.g. through virtualisation – if you already have a server-based system. Aside from cost-savings in SOX 404 implementation, server-based systems also offer a host of other benefits. Click that link to learn more.

Not sure how to get started on a cost-effective IT compliance initiative for SOX? You might want to read our post How To Get Started With Your IT Compliance Efforts for SOX.?

Data Leakage Prevention – Protecting Sensitive Information

When DuPont lost $400 million in intellectual property, it wasn’t because a hacker from the other side of the world infiltrated their system. The information was simply stolen by a former employee. Alarmingly, data loss incidents are not always caused by deliberate actions.

A file containing personal information accidentally attached to an email and sent to multiple recipients; financial data stored in a USB pen drive, accidentally left in a restaurant; or bank account data of colleagues, inadvertently posted on a company website – these are also some of the everyday causes of data loss.

A report done by research company Infowatch regarding global data leaks in 2010 showed that there were actually more accidental data leaks in that year compared to intentional ones. Accidental leaks comprised 53%, while intentional leaks comprised 42% (the rest were unidentified).

But even if they ?only? happened accidentally, breach incidents like these can still be very costly. The tens of thousands of dollars that you could sometimes end up paying in civil penalties (as in the case when you lose other people?s personal information) can just be the beginning. More costly than this is the loss of customer and investor confidence. Once you lose those, you could consequently lose a considerable portion of your business.

Confidential information that may already be leaking out right under your nose

With all the data you collect, process, exchange, and store electronically every day, your IT system has surely now become a storehouse of sensitive information. Some of them, you may be even taking for granted.

But imagine what would happen if any of the following trade secrets fell into the wrong hands: marketing plans, confidential customer information, pricing data, product development strategies, business plans, supplier information, source codes, and employee salaries.

These are not the only kind of data that you should be worried about. You could also get into trouble if your sloppy IT security fails to protect employee or client personal information such as their names; social security numbers; drivers license numbers; or bank account numbers and credit/debit card numbers along with their corresponding PINs.

In some countries, you could face onerous data breach notification requirements and heavy fines when these kind of data are involved.

There are now more holes to plug

It’s not just the different varieties of sensitive electronic information that you have to worry about. Because these data can take on different forms, i.e. data-at-rest, data-in-motion, and data-at-the-endpoints, you also need to take aim at different areas in your IT system.

Sensitive information can be found ?at rest? in each of your employees? hard disks, in your servers, storage disks, and in off-site backup disks. They can also be found ?in motion? in email, instant messaging, social networking messaging, P2P file sharing, ftp, http, and so on.

That’s not all. Your highly mobile workforce may have already introduced yet another high-risk area into your system: data-at-the-endpoints. This includes USB flash-disks, laptops, portable hard disks, CDs, and even smartphones.

The main challenge of data leak prevention

Having been made aware of the various aspects of data leakage, have you already come to grips with the extent of the task at hand?

There are two major things you need to do here to prevent data leakage.

One, you need to identify what data you have that can be considered as sensitive/confidential information. Of course you have financial information and employee salaries in your files. But do you also store personally identifiable information? Do you have trade secrets that are stored in electronic form?

Two, you need to pinpoint their locations. Are they only on your hard disks and laptops? Or have they made their way to flash drives, CDs/DVDs, or portable HDDs? Are they being transmitted through email or any other file transfer media?

The reason why you need to know what your sensitive data are as well as where they are is because you would like all efforts of securing them to be as efficient and unobtrusive as possible.

Let’s say, as a way of protecting your data, you decide to implement encryption. Since encryption can consume a lot of storage space and significantly reduce performance, it may be impractical to encrypt your entire database or all your files. For the same reason, you wouldn’t want to encrypt every single email that you send.

Thus, the best way would be to encrypt only the data that really need encryption. But again, you need to know what data needs to be encrypted and where those data can be found. That alone is no simple task.

Not only will you need to deal with the data you already have, you will also have to worry about the data that will go through your systems during the course of your day-to-day transactions.

Identifying sensitive data as it enters or leaves your system, goes through your network, or gets stored in your file system or database, and then applying the necessary security actions should be done automatically and intelligently. Otherwise, you could end up spending on a lot of man-hours or, worse, wasting them on a lot of false positives and negatives.

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Business Turnaround Tip for a Successful MBO Turned Awry

When you acquire a company through an MBO, your hopes are always high. You know the business more than anyone else and you’ve got too much at stake to do a sloppy job. So how could things go wrong? Well sometimes they do. And if you don’t make a quick business turnaround, you could end up losing more than just your company.

If that management buyout was financed by a bank, then chances are you were required to invest a sizeable amount from your own pockets. I won’t be surprised if you even remortgaged your house for it.

Regardless of your source of funding, whether it was a bank, a venture capitalist or through a deferred consideration, the mere thought of losing your job and getting buried in enormous debt at the same time might be too much to bear. If you get too overwhelmed by your emotions and can’t think clearly, you’ll have to step out of the driver?s seat and have someone take over.

That someone can’t be a member of the management team that took part in the management buyout. Like you, he/she might be in panic mode as well. You need someone from the outside who has no emotional attachments to the company and hence can view the crisis from a clear perspective.

Here’s what’s needed:

Review and Plan

Take a closer look at all factors affecting your business: governance and organisational structures, employees, suppliers, systems and procedures, roles and responsibilities, etc. Identify potential risks and assess the likelihood of them affecting your business.

This will give a clearer picture of cause-and-effect relationships as well as the specific tasks on hand.

Thus, when it is time to draft a plan, you can do so from a well-informed standpoint. This will enable you to target specific areas of improvement and avoid pointless activities.

Assure all stakeholders

Once a watertight plan has been formulated, you will have to approach your stakeholders. They?ll need to know what your directions are. Once they’re all sold on the plan, you could implement our strategies unimpeded.

This is a very crucial part because a sceptical stakeholder can serve as a major stumbling block in our efforts to improve the situation. You need to convince your banks, sponsors, and investors in order to avoid additional financial obstacles. You need to convince your suppliers too. If they cut off or limit supply, you won’t be able to continue doing business.

Most of all, you need to persuade your staff and employees that the proposed major changes have to be carried out in order for the company to survive. You can’t run your operations without them on board.

Redesign and set up new systems and procedures

Any company requiring a turnaround will certainly have systems and procedures that are no longer working well in the current conditions and hence would require either major changes in key areas or a total revamp. You need to study personnel roles and responsibilities as well as systems and processes, including financial and IT systems, and supervise the implementation of necessary changes.

You will need to evaluate your existing IT architecture and determine how you can best maximise what you already have and propose what you think will work more efficiently for our proposed systems and procedures. Every piece of hardware or software recommended will take into consideration your present resources. There are many solutions out there, you just need to find the best fit.

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