The Limitations of Excel for Civil Construction Contractors

Since computers have been commonplace in the construction industry, Microsoft Excel has been one of the most prevalent software tools in use by construction contractors large and small.  It has many benefits; it is highly flexible, most users can operate its basic functionalities, simple computations can be performed quickly and it comes installed on most computers.

Many business-critical tasks are commonly managed through  Excel including company- and project-level cost management, daily site reporting, progress claims, variation claims, timesheets, subcontractor and supplier management, and safety and quality reporting. 

While it is certainly a giant leap from paper-based construction document management, Excel has many limitations for civil construction contractors.  Below we list some of the major challenges faced by civil contractors today when using Excel.

Problem 1: Disconnected cost information

It is typical for civil contractors to manage their businesses with many Excel sheets living on different computers.  By the nature of construction management, these Excel sheets feed into each other.  Today this is typically done by humans, taking up a lot of time and introducing the potential for human error.  Some of these connections include:

• Project-level cost management feeding into company-level cost management
• Supplier/subcontractor information feeding into accounts payable systems
• Timesheets for all projects feeding into accounts payable systems
• Progress and variation claims are necessarily interconnected and feed into accounts receivables

It is possible to host Excel documents in the “cloud”,  however, this introduces more problems including stability (large Excel documents can be slow and prone to crashing), human error (it is easy for users to break links in excel – see problem 3) and lack of audit trail (see problem 2).

Problem 2: No access control or audit trail

Almost as important as the information that your people are capturing is the control that you have over this information.

Ideally, individuals will have access to view and edit information based on their roles.  With Excel on an individual’s computer by default, only the owner of that computer has access (as covered in Problem 1 – Disconnected cost information).  If the Excel sheet is stored in the cloud (eg, on Google Drive, Microsoft Sharepoint etc), then you will need to grant access to things that certain users should be able to access or be overly restrictive.

• If you grant too much access, individual employees can see potentially sensitive information that they shouldn’t have access to, can change data in the system that they shouldn’t be able to change, and finally, their experience will be complicated by a whole lot of information that is not relevant to them.
• If you grant too little access, you will have a few team members overloaded entering information for everyone.  This other information will either be managed on paper-based systems or disconnected Excel sheets.

Like access controls,  audit trails are important to see who has made changes to your critical information and to provide governance control in the case of intentional changes to cover up issues.

Problem 3: Human error

Excel sheets get very complicated very quickly when you try to make them do more than basic calculations.  According to MarketWatch, 88% of Excel spreadsheets have errors, and this is very consistent with our experience working with our customers.

It’s likely that your construction cost management Excel sheets include errors, that you won’t be able to identify them and that these will impact the reliability of your cost and contract controls.  These errors can easily result in significant costs to your civil construction business.

Every time a user enters information into your Excel sheets, it’s an opportunity to make a mistake or break links within your Excel.

Problem 4: Lack of standardisation

Being able to manage your entire company requires information in standardised formats.  The reality for most construction companies is that project control documents are modified or created from scratch by each project team based on individual preferences.

To have a high-level overview of your company’s operations requires collecting all of these sheets, and having one person bring them into a central document.  Often when data is captured in a non-standard way it can be impossible to do this.  This is another issue that contributes to Problem 1 – Disconnected Cost Information.

Problem 5: Information not available in real-time

In civil construction things change quickly – within a week a project can go from on-track to hopelessly off-track.

Because of the effort required to bring information together from multiple Excel sheets, these insights are typically just a snapshot in time captured on a monthly basis (if at all).  This means that by the time this information is available it’s often too late to take corrective action.

Finance teams also struggle with this lack of real-time information.  To complete payroll, timesheets need to be collected from each project team and to confirm supplier and subcontractor information they need to chase down confirmation from project teams.

These are the top 5 issues that our customers dealt with on a day-to-day basis when trying to manage their operations in Excel.  Others that didn’t quite make the list include:

• The difficulty in maintaining version controls and ensuring you have the most recent data
• The propensity of complicated Excel sheets to crash or run very slowly
• The amount of time consumed with daily data input and fixing broken sheets

A better way to manage your civil construction projects

All of these issues come around through civil contractors’ efforts to connect their civil construction data to manage costs, contracts and financial transactions.  While Excel is a great tool for many simple applications, it is not up to the task of managing civil construction operations.

Fortunately, software systems are available that overcome the limitations of Excel.  With the right system, you can simplify data capture at the source with mobile-based interfaces, eliminate duplication of data entry, reduce human error and ensure the right data is available to the right people in your team in real-time.

Varicon’s founder struggled with Excel sheets for a decade in the civil construction industry and has first-hand experience with these problems.  If you own or work for a civil construction contractor, Varicon may be the solution that you need!  Varicon is a civil construction-specific solution to connect together construction cost and contract data from the field site to the office.

To learn what Excel is costing your civil construction business, click on “Request a Demo” to discuss your specific business needs.