Reinventing Industrial Compliance Without Abandoning the Mighty Spreadsheet

Industrial organizations have learned to be skeptical of technology promises. Too many have experienced expensive software implementations that disrupted operations without delivering promised benefits. The "rip and replace" approach ignores the substantial institutional knowledge embedded in existing spreadsheet-based processes.

Instead of abandoning spreadsheets entirely, forward-thinking organizations are seeking solutions that preserve their spreadsheet investments while addressing core limitations. This evolutionary approach recognizes that the problem isn't spreadsheets themselves—it's the lack of enterprise capabilities when spreadsheet systems reach scale.

Why Spreadsheets Dominate Industrial Risk & Compliance

I've witnessed countless manufacturing professionals masterfully orchestrate complex regulatory frameworks using nothing more than Excel's familiar grid. Yet I've also seen these same professionals wrestle with the inevitable limitations that emerge when spreadsheets meet the realities of modern industrial operations.

I've seen teams create incredibly sophisticated systems: risk registers that automatically calculate probability-impact matrices, compliance calendars that track multiple regulatory deadlines simultaneously, and incident management workflows that rival purpose-built software. A compliance manager can create a custom risk register on Monday morning and have their entire team contributing data by Tuesday afternoon.

Fueling Business Decision-Making

​Nearly one in five professionals working in governance, risk, and compliance relies on the accuracy of spreadsheet data.

88% of organizations use over 100 spreadsheets regularly to make critical decisions; 59% use over 1,000 complex spreadsheets for important business processes, such as sales compensation, product tracking, and pricing configurations.

Source: Think Spreadsheet Risk Isn’t A Threat? Think Again. Forrester: A Custom Case Study commissioned by Incisive Software | May 2019

The quality and reliability of the information contained in the advanced spreadsheets are crucial for business decision-making. Since these decisions can significantly affect safety, compliance, revenue, and financial outcomes, it is essential for companies to mitigate spreadsheet-related risks.

Source: A commissioned study conducted by Forrester Consulting on behalf of Incisive, March 2019

The truth is, spreadsheets will always have a place in regulated industries. But the future belongs to solutions that enhance their capabilities—tools that work hand-in-hand with spreadsheets.

Universal Accessibility and Familiarity

Walk into any manufacturing facility, chemical plant, or industrial operation, and you'll find risk managers who can build sophisticated compliance tracking systems in Excel. This isn't by accident—it's the result of decades of institutional knowledge built around a tool that every professional already understands.

Spreadsheets require no specialized training, and no lengthy procurement processes.  This simplicity and accessibility have made spreadsheets the default choice for everything from incident tracking to regulatory reporting.

Flexibility for Custom Compliance Frameworks

Industrial operations rarely fit neatly into predefined categories. A pharmaceutical manufacturer managing FDA regulations operates differently from an oil and gas company navigating environmental compliance.  While both types of enterprises rely heavily on spreadsheets for compliance activities, the specific regulatory frameworks they navigate create dramatically different approaches to spreadsheet management and validation.

Typical pharmaceutical spreadsheet applications:

• Clinical trial data analysis with strict data integrity requirements,

• Batch record calculations requiring formula validation,

• Stability study tracking with electronic signatures,

• Quality control laboratory calculations with audit trails,

• Regulatory submission data compilation.

Every spreadsheet used in GMP (Good Manufacturing Practice) processes must be formally validated with documented testing protocols required by the US Food and Drug Administration. 

For example, spreadsheets used by pharma companies must meet part 11 compliance, which is the official requirement for all manufacturers of FDA-regulated products.

In the pharmaceutical industry, a single spreadsheet error can raise questions about the reliability of the company's entire test data during an inspection. 

An oil & gas company might use spreadsheets to track chemical discharge permits under OSPAR regulations. It requires calculating discharge volumes and environmental impact factors across multiple offshore platforms. Unlike pharmaceutical applications, these spreadsheets focus on environmental impact calculations rather than patient safety, allowing for different validation approaches. 

Typical Oil & Gas spreadsheet applications:

• EPA emissions reporting and calculations,

• Environmental impact assessments,

• Chemical discharge tracking and permit compliance,

• Well production data analysis,

• Safety incident reporting and trending.

In this industry, complex spreadsheets are used to calculate methane emissions or air quality data. Multi-jurisdictional requirements can be particularly challenging. These companies must track compliance across federal, state, and local environmental regulations using various spreadsheet formats. 

Oil and gas companies face complex environmental regulations but operate under different compliance frameworks that allow for more flexibility in spreadsheet usage. 

The flexibility to customize every field, formula, and format makes spreadsheets particularly powerful for the diverse compliance areas industrial companies face. Spreadsheets remain the workhorse of industrial risk management. No one can deny their staying power or the comfort they offer. From OSHA logs to complex risk registers, and even day-to-day documentation like lockout/tagout procedures, spreadsheets have enabled industrial compliance teams to act fast, customize freely, and adapt in the face of daily operational challenges.

TRL “Calculators” as Spreadsheets: Driving Mission-Critical Technology Assessments

Specialized spreadsheet tools, known as Technology Readiness Level (TRL) calculators, represent one of the most sophisticated applications of Excel in industrial settings. They are employed to support the Technology Readiness Assessment (TRA) processes. These calculators are designed as Excel spreadsheets containing comprehensive sets of detailed questions for each level of technology readiness. Subject matter experts answer these in detail to determine the maturity level of critical technologies involved in a project.

The spreadsheet calculator enables a rigorous, metric-based, and systematic evaluation of the maturity of key technologies (called Critical Technology Elements, or CTEs) within large-scale engineering or scientific projects. For each technology or subsystem, reaching a certain TRL requires a “yes” answer to every specified question at that level in the spreadsheet. 

Spreadsheet-based TRL calculators in Microsoft Excel format have been developed by the Department of Defense (DoD) and the Department of Homeland Security (DHS), and DOE affiliates use similar versions. 

Source: Technology Readiness Assessment Process Adapted To Geologic Disposal Of HLW/SNF.

By embedding the TRA methodology into comprehensive Excel spreadsheets, organizations can ensure that every required technical criterion is rigorously checked and documented before moving ahead, reducing project risk and increasing the likelihood of success.

Where Spreadsheets Hit Their Limits

Yet if you’re reading this, you also know the frustration. For all their virtues, legacy spreadsheets have limitations—not just minor inefficiencies, but challenges that can escalate into business risks as your company grows. 

As organizations develop, spreadsheets quickly begin to show their limitations in the face of evolving challenges.

Research by KPMG reveals a concerning fact: 90% of spreadsheets with more than 150 rows contain errors.

Scalability Becomes the Enemy

The same flexibility that makes spreadsheets powerful also creates their biggest limitation. As operations grow, spreadsheet-based systems begin to buckle under their own weight. A risk register that worked perfectly for a single facility becomes unwieldy when expanded across multiple locations, each with unique hazards and regulatory requirements.

Version control becomes a nightmare when multiple stakeholders need access to the same compliance data. I've witnessed scenarios where critical safety information existed in seventeen different versions across various team members' computers, with no clear indication of which contained the most current data.

Data Integrity and Security Concerns

Manufacturing environments generate vast amounts of risk and compliance data. Spreadsheets lack the robust data validation and security controls that industrial operations require. A single misplaced formula can compromise months of compliance tracking, while the absence of audit trails makes it nearly impossible to demonstrate regulatory adherence during inspections.

The security implications are equally concerning. Spreadsheets containing sensitive compliance data often travel via email or shared drives, creating potential exposure points that regulatory bodies increasingly scrutinize.

The Risk of Human Error

Multiple academic research studies consistently demonstrate that spreadsheet error rates are alarmingly high across operational environments.

Many research reveal that the vast majority of business spreadsheets contain errors. 94% of the 88 operational spreadsheets studied contained at least one error, with an average cell error rate (CER) of 5.2% across 43 spreadsheets.

Errors in spreadsheets can lead to poor decisions, resulting in financial losses, pricing mistakes, and operational problems in fields like healthcare.

The authors of "Impact of errors in operational spreadsheets" investigate the financial impacts of faults in 25 operational spreadsheets. The study identified a total of 117 genuine faults, of which 70 (60%) had a financial impact, while the remaining 47 (40%) did not. The fault with the largest financial impact exceeded $100 million, followed by several other faults with impacts greater than $10 million each.

A similar study conducted in an Irish healthcare setting found that more than 90% of the spreadsheets analyzed were faulty, with a cell-error rate of 13%.

Data Volume Without Context

While spreadsheets hold a lot of data, they don't show how that information is related. Inability to reveal relationships between data points often results in overlooked insights and lost revenue. 

As organizations grow and products multiply, maintaining clarity and control through spreadsheets becomes increasingly difficult. 

Example: 

This lack of context becomes particularly problematic when dealing with complex product portfolios or multi-location operations. For instance, a manufacturer might have pricing data in one sheet, inventory levels in another, and customer demand patterns in a third—but no clear way to understand how changes in one area impact the others. Teams end up making decisions based on isolated data points rather than comprehensive business intelligence, leading to suboptimal strategies and missed opportunities for cross-selling, inventory optimization, or market expansion.

The opportunity isn't to abandon the spreadsheet, but to evolve how your teams work with the tools they already trust. By implementing modern data storage solutions for Product Information Management (PIM), manufacturers can visualize product data and make better decisions. 

Limited Collaboration 

Although Excel offers co-authoring and limited real-time collaboration via its online version, it remains far less robust than purpose-built systems. Frequent synchronization issues, lag, and a lack of advanced features for true multi-user environments are one of the primary barriers. The absence of robust change-tracking and advanced permissions continues to introduce risks of version conflicts, accidental overwrites, and confusion among collaborators. 

This shortcoming presents a major obstacle for businesses overseeing inventory in multiple warehouses or retail locations. Teams struggle to keep data current, identify trends, and coordinate changes, leading to redundancies and errors that hinder collaboration and slow down business processes.

The Evolution Path: Building on Spreadsheet DNA

The most successful transitions I've observed maintain the familiar spreadsheet interface while adding critical enterprise features: automatic data validation, real-time collaboration, audit trails, and integration capabilities. Teams can continue working in environments that feel familiar while gaining access to features that transform their effectiveness.

💡The tip: 

Building solutions that work alongside existing spreadsheet workflows rather than attempting to replicate their core functionality in new platforms.

The key is not simply re-creating the spreadsheet in a web interface. Instead, it’s better to focus on building solutions that complement workflows based on spreadsheets, e.g., providing valuable extensions. This enables teams to continue working in environments they know, while gaining access to features that truly transform their effectiveness.

What does the Future of Spreadsheets Look Like? Empowering, Not Replacing

The next decade belongs to hybrid tools that respect the spreadsheet foundation while infusing it with innovative GRC capabilities: 

• Preserving institutional knowledge: Your unique formulas, data layouts, and process flows are retained, not erased.

• Enterprise-class controls: With role-based permissions, integrated audit logs, and secure data management, compliance becomes defensible and transparent.

• Seamless automation: Routine compliance checks, regulatory alerts, and reporting are handled by AI agents and automated workflows.

• Easy adoption: Users continue working in familiar environments, now supercharged with new capabilities—no painful retraining or “change fatigue”.

Preserving Investments While Adding Power

Modern risk and compliance platforms can import existing spreadsheet data and workflows, preserving years of institutional knowledge while adding enterprise-grade capabilities. 

Teams maintain their familiar processes while gaining access to real-time collaboration, automated reporting, and integrated risk assessments.

The transformation isn't about replacing human expertise with automation—it's about augmenting that expertise with tools that eliminate manual bottlenecks and reduce compliance overhead by up to 40%.

Example: 

One Parakeet client reduced vendor onboarding time from four weeks to ten days and cut audit prep from three months to two weeks—all without discarding their core spreadsheet logic. As a result, the operational disruptions dropped by 30%.

Organizations implementing this evolutionary approach report dramatic improvements in compliance processing speed, vendor onboarding efficiency, and audit preparation time. More importantly, they achieve these improvements without disrupting the institutional knowledge that makes their risk management programs effective.

Taking the Next Step Forward

The question isn't whether spreadsheets will continue playing a role in industrial risk and compliance—they will. The question is whether your organization will enhance these powerful tools with modern capabilities or continue managing increasing complexity with static solutions.

The companies thriving in today's regulatory environment aren't those that abandoned their spreadsheet expertise. They're the ones that evolved it into something more powerful while preserving what made it valuable in the first place.

Spreadsheets will keep their place in industrial risk and compliance for years to come. But by enhancing—not replacing—these trusted tools, we can build safer, smarter, and more resilient manufacturing organizations. 

Ready to see how your spreadsheets could work harder for you? Discover what's possible with a Parakeet demo and explore how to unlock your data's full potential without disrupting existing workflows.

Sources: 

1. KPMG Management Consulting, "Supporting the Decision Maker - A Guide to the Value of Business Modeling," press release, July 30, 1998.

2. https://eusprig.org/wp-content/uploads/0908.1190.pdf

3. Pak-Lok Poon et al, Spreadsheet quality assurance: a literature review, Frontiers of Computer Science (2024). DOI: 10.1007/s11704-023-2384-6

4. Powell S G, Baker K R, Lawson B. Impact of errors in operational spreadsheets. Decision Support Systems, 2009, 47(2): 126–132 

5. Dobell E, Herold S, Buckley J. Spreadsheet error types and their prevalence in a healthcare context. Journal of Organizational and End User Computing, 2018, 30(2): 20–42

6. https://www.osti.gov/servlets/purl/1416888