Your Estimating Spreadsheets Are Good Enough… or Are They?

October 1, 2019

Steve Watt

Construction cost estimators put a lot of time and effort into producing estimates. For some, this process includes relying on spreadsheets to piece together all of the critical components of a project and arrive at a quoted price. In fact, of all the construction workflows that are still dependent on spreadsheets, estimating tops the list at just over 63%.

If you’ve been using the same spreadsheets for a long time, you’ve no doubt invested countless hours and loads of brain power into setting them up. You have the formatting and formulas just the way you like them. And you've found some creative ways to work around the limitations and downsides that spreadsheets present. Given how customized and specific they are to your process, you may even liken your spreadsheets to your own version of construction estimating software.

Estimating is a very personalized process and
despite the growth in dedicated industry solutions,
contractors stick to the processes they’ve customized.

— 2018 ConTech Report, JB Knowledge

But no matter how good your spreadsheets seem or how carefully you’ve customized them, they aren’t a substitute for a database-driven construction estimating solution. When you take advantage of dedicated estimating software, you gain the ability to produce estimates faster and more accurately than ever, and without the need to add resources to your team.

Get the essential guide to learn how estimating software improves accuracy.

Just as important, you minimize your exposure to the risks and dangers that spreadsheets present. Dedicated estimating software is built to address the complexities and functional gaps that you simply can’t avoid in spreadsheets. While your spreadsheets may seem good enough, they may actually be hurting your productivity and accuracy.

5 Biggest Risks of Relying on Spreadsheets

Despite your best efforts to overcome the limitations of spreadsheets, continuing to rely on them for construction estimating may be putting you at risk in more ways than one. Here’s what you’re up against by continuing to use spreadsheets:

1. Spreadsheets are notoriously error-prone

With thousands of cells in your estimate and many of them dependent on each other, a simple error in one cell can throw off a calculation and affect the entire spreadsheet. The potential for broken links and faulty formulas is also high—and there’s no easy way to catch and correct them.

Given the estimating errors in spreadsheets alone, it’s difficult to continue justifying their use, especially when the accuracy of your estimates can make or break a client relationship, not to mention your company’s profitability.

2. Spreadsheets don’t enable standardization

As the demand for estimators continues to outpace available talent, your ability to produce quality estimates with the team you have is increasingly important. You need every estimator on your team to be as accurate and efficient as possible.

But spreadsheets don’t offer a viable way to transfer knowledge to the rest of your team and enable them to replicate what your best estimators take for granted. They do little to help you transfer your proprietary estimating practices and hard-won experience to those who would benefit from them the most. And this inevitably leaves you dependent on your most seasoned estimators instead of fully leveraging your entire team.

3. Spreadsheets are too complex

Your ability to wrangle spreadsheets to your will may be a source of pride for you, but it also highlights their inherent complexity. Spreadsheets make it especially challenging to produce what-if scenarios or value engineer your estimates for owners. And they make it anything but easy to customize your bid packages or reports to meet internal or owner requirements.

No matter how much effort you’ve put into your particular spreadsheets, without the flexibility and transparency to do detailed comparisons and explore alternatives with owners, you’re unable to demonstrate greater value or facilitate better client conversations. These deficiencies could be the difference between an owner choosing your company or someone else.

4. Spreadsheets breed inconsistency

Spreadsheets make it all too easy for each estimator to develop their own individual processes. When you lack a standardized estimating process, your estimates are much harder and more time-consuming to review. And because they lack an audit trail, spreadsheets do little to facilitate your ability to find and fix any errors before an estimate goes to the owner.

If your company is competing for bigger construction projects, the inconsistency of your estimates could lead to profit-killing mistakes. At the same time, inconsistent estimates diminish your professionalism because you’re not presenting a consistent and uniform presentation to owners every single time, leaving them to wonder if your work on the job site will be equally inconsistent or haphazard.

Learn how standardized estimating helps you meet
client demands in this essential guide.

5. Spreadsheets are the enemy of efficiency

Inaccuracy, inconsistency, complexity—it all adds up to an inefficient estimating process that limits your team’s productivity. When estimators are working in an individualized and siloed way, you’re restricted in your ability to shift projects to available resources. And you may end up relying too heavily on just one or two key estimators to do the bulk of the work and reviews.

Given the shortage of estimating talent, you need to maximize the productivity of the team you already have. But spreadsheets are working against you. The productivity of your entire team suffers when they’re unable to easily collaborate on estimates, learn and apply best practices, access up-to-date cost knowledge, or catch errors and inconsistencies.

Go from “Good” to “Great” with Estimating Software

You’ve stretched spreadsheets to their limits to create a workable solution, but even the most seemingly airtight spreadsheet is likely to have some issues. If you’ve seen the statistic about how 9 out of 10 spreadsheets have errors, you may worry that your estimating spreadsheets have mistakes, too.

On the other hand, you’ve invested blood, sweat, and tears into tailoring and tweaking your personal spreadsheets. It’s understandable that you’re reluctant to give them up. And you may be tempted to believe that they’re just as good as—maybe even better than—any estimating software you could buy.

But the risks inherent in spreadsheets are hard to ignore and nearly impossible to avoid. Yes, getting out of your comfort zone can be, well, uncomfortable, but the reality is that spreadsheets create more issues than they solve. Furthermore, the construction industry is evolving as new technologies promise greater efficiency and accuracy. And those contractors that want to stay competitive and relevant have to evolve along with it.

Database-driven construction estimating software can help you maintain your competitive edge, and it’s easier to adopt than you may realize. You’ll be able to: