Problems Using Excel For Estimating
The “Legacy” Spreadsheet Problem
Data is essential to running construction schemes, and every construction business uses Excel in its own unique way to calculate bills of quantities. Many use ‘legacy’ spreadsheets, set up years previously and passed on from employee-to-employee as estimating teams grow and change. These can lead to major headaches and rework, and can be especially sensitive to errors as the spreadsheets handle more data and complex projects.
Excel Isn’t Specifically For Construction
Excel is versatile, but does not contain functionality which is specific to the needs to estimators. While spreadsheets built by advanced users can automate calculations, Excel doesn’t have the power of software specifically developed for estimators. With construction hit by fluctuating prices, increasing regulations and required reporting, and the need for companies to have a competitive edge with the accuracy of their estimates, functionality made for construction such as access to pricing libraries and the ability to make online enquiries for subcontractors.
These functions will save time and lead to accurate quotes that win bids.
Spreadsheet Errors Are More Common Than You Think
Dr Raymond R Panko of the University of Hawaii published a research paper in 2008 that concluded that over 88% of Excel spreadsheets contain errors. Many errors occur from human error such as incorrect data input, formulas not set correctly or logic errors, leading to miscalculations during pre-construction.
These errors can prove to be costly, can lose bids and eat into margins. If costs are miscalculated due to spreadsheet errors, it is possible that schemes will end up running at a loss.
Errors on Excel are not only common, but costly. If the error is spotted, it can also be a time-consuming task to fix the spreadsheet without igniting a domino effect on the numbers.
Spreadsheet Estimates Can Be Time-Consuming
Building a bill of quantities on Excel can take days of work, and involves a lot of copy/pasting and repetitive manual work from the estimator. This was confirmed by Access Construction’s State of Construction 2023 survey of 1,300 professionals, where the ‘time consuming estimating process’ was listed as one of the biggest challenges in their role by 26% of respondents.
Overall, Excel is versatile, but software developed for construction estimating has automated and integrated a lot of these manual tasks, speeding up the process.
Building estimates on Excel can also involve a lot of time spent identifying and correcting errors, alongside requested changes leading to recalculations across the sheet.
Spreadsheets Can’t Create Accurate Estimates
As the industry grows more competitive, accurate estimates with up-to-date pricing for materials and labour are essential for winning work and developing client relationships.
Estimates built on Excel tend to have diminished accuracy with a lack of access to real-time data, and difficulties with collaboration leading to errors and inaccuracies. As soon as an estimate is completed on Excel, it becomes out-of-date as prices and data changes.
Inaccurate estimates built without the most recent data can delay projects, lead to rework and poor profit margins.
”Version Control” Leads To Collaboration Issues In Excel
Estimates are often a collaborative effort across teams as procurement managers, project leads and those in the back office are able to check and make their own edits and inputs.
This can often lead to issues with version control, where edits are made to a version of the spreadsheet, but not the core version which is saved on the central system. Changes can be made to the knowledge of one collaborator but not be expressed on the core document.
The result is miscommunication, data errors, diminished accuracy and issues with relationships between employees. Several version of ‘the truth’ existing at once can lead to a mess where no team member has the truly ‘correct’ version of an estimate.
