Why Microsoft Excel shouldn’t be used as Construction Cost Estimating Software

Accurate, timely, and transparent cost estimating is critical to the success of any renovation, repair, sustainability, or new construction project. While most construction cost estimators continue to rely primarily upon hardcopy documents and electronic spreadsheets, such as Microsoft Excel, many are beginning to leverage electronic cost books and associated calculator software tools. Both of these approaches have merit and are well suited for certain types of users.

Construction Cost Estimating Software | Methods

Growing numbers of cost estimators, however, need to work with multiple projects and multiple estimates simultaneously, securely share information on active projects, gain access to localized cost information, and easily locate and reuse historical data. These Owners, Contractors, and AEs are moving to advanced cost estimating and management systems. They are discovering that significantly higher productivity can be gained – as much as 50 percent or more. Furthermore, the collaborative aspects of these sophisticated software systems are aligned with integrated project delivery methods and construction sector movement toward Building Information Modeling (BIM). Cloud computing, a further advancement enabling even higher levels of collaboration and simplified deployment, are also now becoming available.

Spreadsheets, most commonly Microsoft Excel, are used by more estimators for this purpose than any other tool. Spreadsheets have significantly improved cost estimation capabilities and accuracy since the 1980s. Relatively easy to master, spreadsheets provide a means to create and report a construction cost estimate. Cost construction models can also be built within spreadsheets. Productivity improvements result from the ability of Excel to easily handle more of the mundane calculations required.

One problem with spreadsheets, however, is their inherent vulnerability to errors due to data entry, a problem that only increases along with the complexity of an estimate. As the formulae within the spreadsheets become more numerous and complex, errors became exponentially more frequent and costly. Spreadsheets also do not account for dynamic cost information and associated uncertainties or historical information – all of which have proven to be important variables for many construction projects.

Lastly, and in part due to the issues noted above, collaboration using spreadsheets is problematic, as are transparency and accurate monitoring and reporting. Having multiple people working on the same spreadsheet is not efficient or even workable for larger projects. Thus estimates tend to be created and stored in different locations, making information difficult to accurately retrieve and changes extremely costly to execute. As a result, old data errors are perpetuated, copied over and over again.

Download our 2015 Report “A Comparison of Construction Cost Estimating Tools

 

 

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