Break Free of Microsoft Excel-based Construction Project Estimating

Break Free of Microsoft Excel-based Construction Project Estimating

In a competitive world, we seek a co­­­­mpetitive edge

If you want to get your golf game into the low 80s, would you use 35-year-old clubs? How many in your bowling league use the house balls? Softball and baseball players, would you rather swing a bat from the early eighties or swing the new hot bat everybody is using?

If you are using Microsoft Excel as your estimating platform, you should consider upgrading to more competitive gear. If you want to attract and retain new professionals to your company, consider using tools that support their expectation of advancing the use of technology in construction.

The first version of Excel was released thirty-five years ago in 1985, and for most of the construction industry, many of the business software tools seem to come from the same era. This is especially true for estimating and project controls, where construction is still one of the least digitized industries.

If you are an estimating or project controls professional working in a medium to small construction firm, Excel may be your only choice. Many professionals build elaborate, multi-tabbed, multi-color spreadsheets that they share among colleagues. These colleagues tweak their spreadsheet version to meet their own preferences, adding confusion and poor practices, and leaving the rest us wondering why companies don’t seek a better solution.

Excel is obsolete as the primary tool for developing estimates

For companies still using Excel as their primary estimating tool, I include several justifications below for moving beyond it. Most of these should be easily understood by management who aren’t estimators.

These points provide the ammunition that construction professionals need to break free from Excel, a tool that is no longer competitive in the construction software space. Estimators can use them to articulate the need for change to their management.

  • Excel is not secure: Check your corporate IT standards, intellectual property standards, and legal standards. Typically, this is a strong justification for system upgrades to secure confidential and proprietary company data. Solve this problem by using an estimating platform that provides vigorous estimate management functionality, ensuring all estimates are prepared securely and consistently. The result is improved estimate precision.
  • Poor support for global estimate rates and factors: With Excel-based estimating, it’s difficult to apply global factors, such as productivity, overheads, profit, cut and waste, etc. Excel also has trouble applying crews and construction indirect costs. Building this functionality in Excel is labor-intensive and exposes a major spreadsheet weakness: poor performance under load. Often, new versions of Excel don’t support previously developed macros or the VBA code that the macros are built on. This locks estimators into using an outdated version of Excel, which is a ticking timebomb.
  • Estimate development degrades with multiple authors: Excel-based estimating does not support a distributed workforce. In today’s environment, this constrains virtual teams and reveals Excel’s weaknesses. Even in smaller company settings, spreadsheet estimates become unwieldy. Moving to a common, shared platform relieves this pain and supports collaborative estimate preparation.
  • Excel estimates do not integrate well: Integration of spreadsheet estimates is beset by data inconsistency and difficulty reconciling and versioning estimates in a highly iterative process. Estimate consolidation from trade estimators is often done by transferring lump sum amounts instead of capturing important estimate detail, which orphans the source estimates. Solve these pain points by adopting a single estimating platform that uses a central database. With a central database, organizations can focus on continuously improving their methods and practices.
  • Estimate errors go unchecked: In large, multi-sheet estimates, spreadsheet errors often go unnoticed. Cell references in formulas wander around when copied or moved, column summaries often fail to pick up all the needed rows or cell references, and time is wasted, adding more stress to an already stressful process. The impact of spreadsheet errors on estimate accuracy is an avoidable consequence of using Excel. Eliminate these types of errors with dedicated estimating software that uses a central database and common estimate layouts.
  • Historical estimate and estimate validation suffer: Because Excel estimates are typically stored locally on estimators’ computers or in a free-style file structure on a remote server, estimate validation is painful. Using historical estimate comparisons involves cumbersome linked spreadsheet comparisons, which take an excessive amount of time. In many cases, validating an estimate can take more effort than preparing it. Use this pain point as a justification—saved time adds up and can be used as a quantitative benefit to moving away from Excel and obtaining better software.
  • Estimate methods remain elementary: Developing new or advanced estimating methods is incredibly tricky in Excel. Companies struggle to develop and use parametric estimating methods when they work in Excel. With estimating software, you can develop more advanced estimating relationships using features such as models and assemblies to generate quantities or parametric estimates from inputs based on key scope elements.

Excel has served us well in the professional space for over thirty years, and it is still useful to prepare ad-hoc analytical reports. Excel is always a great way to convey simple relationships, but it is not recommended as a corporate estimating platform.

If you are an owner still using Excel as your primary tool, the situation is more egregious. Contractors can increase profit margins by adopting estimating software to create precision in estimate preparation, streamline estimate preparation time, and improve accuracy through estimate validation against a historical database.