Microsoft Excel is a powerful program. For decades, companies across all industries have relied on spreadsheet-based models to manage everything from accounting to data processing, statistical tracking and project management, and various other tasks. While you may be one of the 1.2 billion individuals across the world that trust Excel to handle all your business needs, there is a growing consensus that there are better alternatives.
Construction management software is the progressive alternative of choice for home builders for increasing productivity and efficiency. Excel’s effectiveness in the past has become a detriment to companies that have begun to identify unprecedented flaws and limitations.
Excel Downfalls
Negative experiences are encouraging home builders to transition from Excel to Construction Management software. Stories relay spreadsheet errors that have caused:
- Inconvenience—manual data entry takes time
- Financial loss—uncontrolled formulas cause incorrect reporting
- Penalties and court appearances—fraudulent tax reporting
- Loss of trust/Reputation loss—mistake harms trust department has worked to build
- Bid rejection—spreadsheet errors lead to inaccurate bid
- Loss of value—calculation errors/incorrect earnings projections affect stock prices
- Bankruptcy—after financial mismanagement
- Data leakage—easily shared with hidden data
- Uncontrolled electronic spreadsheet—security risk to hacking
- Loss of financial control—human error
- Misinterpretation of data—several versions of spreadsheets cause inaccurate summarization
- Embarrassment—inaccurate data reporting leads to retraction
- Budgeting error—could affect company revenues
- Confidentiality—confidential data embedded in template
- Underestimation of costs—bad formula
- Underestimation of tax—wrong spreadsheet
Construction bid management software could have helped a contractor avoid a $3 million bid error. A mistake with an Excel spreadsheet formula forced the company to rescind their project bid for a sizable school district construction project. The results were not only embarrassing, but resulted in a loss of the contract and income.
How Excel is Harmful to Your Construction Company
No real-time updates—once data entry is complete and shared with the team, the information is old.
Errors happen—there are no checks and balances. Human data entry errors occur and can lead to major consequences. User formulas can be altered.
Not user-friendly—team members will have different levels of Excel knowledge. This usability gap can lead to mistakes and inefficiencies.
Not Industry Specific—Excel is generic software so it doesn’t provide the tools needed to run a construction company.
Manual data entry—there is no automation or consistency and it can take weeks to compile documents.
Lacks Sharing Features—Excel limits the use of a spreadsheet to one person at a time. Shared documents lack the ability to collaborate as a team.
Easily Hacked—security is a significant issue for homebuilders. Excel documents are usually stored on a computer’s hard drive or shared digital drives. This puts the data at risk for unauthorized access.
No Scalability—Excel can’t grow or shrink affecting productivity. Initial set-up time for templates and formulas can be extensive and is vulnerable to errors.
No Dedicated Support Team—there is no support to assist construction companies to respond quickly so there’s a greater risk of system downtime and reduced productivity.
Reasons to Switch From Excel to Construction Management Software
Change is hard. When you’ve been comfortable using the same system to manage your construction company for a long time, even thinking about making a transition from Excel to Construction Management Software can give you anxiety.
You may be concerned about the ROI, the time required to transition, or your staff capabilities. What you may not know is what you’re missing out on by continuing to stick with the old methods of operation. Here are the 5 compelling reasons to make the switch to construction Enterprise Resource Planning (ERP) solutions:
#1 – Accurate Data and Calculations
Every successful home builder and contractor knows that every winning bid is only as good as the numbers used to create it. Excel formulas can be flawed, costs can be underestimated, and user entries can be erroneous—all leading to a possible winning bid but less revenue than anticipated.
Construction management software is the solution construction professionals have been searching for—construction-specific estimating software. Taking the human element out of the estimating process means fewer errors and more reliable results.
Automatic calculations are made for labor, materials, mark-ups, insurance, equipment, taxes, bonds and any other bid-related components. Powerful tools allow control, summarization, and fail-safe accuracy at every level.
Another benefit of construction ERP software is that the data is always current. Upgrades and automatic pricing adjustments reflecting current industry conditions ensure the protection of your bottom line.
#2 – Team Collaboration
Teamwork is essential in today’s competitive construction market. Excel’s sharing capabilities are typically used to showcase individual entries. While others may add or alter the original spreadsheets, true collaboration and real-time communication are not an option.
Cloud-based construction management software allows an unlimited number of users to work together and gives clear visibility at every stage. Every member of the construction team can work simultaneously and track information specific to their department.
Remote and mobile access means your workforce can connect from anywhere. Construction management software operates on a platform that gives every team member a method for communicating, collaborating, and contributing throughout each stage of the project.
#3 – Integration with Other Software Solutions
Construction companies do not work in a vacuum. Often accounting and project management teams work on different software platforms. Excel, even a customized version, does not provide a path to maintaining a standardized approach that all stakeholders can access.
Developers of construction management software packages recognized the need for data transfer to other systems and offers direct integration capabilities. This eliminates the need to manually enter data, saving time and reducing errors.
#4 – Growth Flexible
While Excel spreadsheets seem to have an unlimited number of data entry cells, the truth is it isn’t designed to handle an increased volume or complex growth requirements. Today’s online, cloud-based platforms address the need to scale up or down as needed. This allows contractors to respond quickly to new opportunities, make adjustments as the market changes, and improve productivity.
Construction management software fits companies of all sizes and product offerings—production builders, custom home builders, general contractors, and remodeling contractors. Just like the rapidly changing construction market, construction ERP solutions can adjust on the fly to accommodate extra user demand and estimate volume.
#5 – Dedicated Software Support
The transition from Excel to construction management software is made simpler due to a dedicated team of support professionals. Industry-based support in both construction and estimating means you’ve got extra team members that can save your company time and money.
Fast response times to questions and service requests help you customize the program to fit your specific needs and avoid system downtime. An invaluable benefit to a knowledgeable support team is its ability to help streamline historical data from your Excel-based environment to a modern, standardized estimating system.
Product updates, new features and functionality improvements are constantly evolving. Your dedicated support team will have knowledge of the construction industry and will keep your company up-to-date on all the latest developments.
The Bottom Line
To help your construction company maintain a market advantage, it’s critical that you move away from Excel-based management processes and adopt technology-focused construction software. A move to powerful, construction ERP solutions will give your team the ability to work together, speed up project workflow, increase productivity, and best of all, improve profit margins.
An investment of time and resources today will ensure your company maintains peak productivity and a competitive edge. To be successful, you’ll need to make sure your senior leadership is committed to transitioning from Excel to construction management software. Be aware that your company must be open to a business process review to properly customize and implement the new software.
Before choosing the best-suited construction management software for your company, consider obtaining testimonials and references from industry peers. It will be critical to trust in your ERP provider/partner and research will help you determine the best match for your needs. Put together a documented plan for evaluating options, share it with your team, and work toward a mutual goal of streamlined success.