Thursday, December 18, 2008

Like a Weed... Spreadsheets Can Spread Out of Control!

Using spreadsheets in construction is a lot like maintaining a flower garden. You start out with a beautiful young plant, caringly and lovingly adding water and fertilizer as needed. Over time, though, the weeds begin to crowd out the flowers, and soon the garden becomes an impossible-to-manage jungle.

I know a lot of construction owners (especially contractors who have grown their small business into a medium-size company) who were once out-of-control gardeners. Their reliance on spreadsheets for financial data and reporting morphed into a complex, inefficient mess.

Despite the wonder and awe that spreadsheet users feel about their worksheet creations, these applications (gasp) might not be (horror) the best tool for up-to-date, accurate information, or flexible reporting capabilities.

Sure. We all love how quickly spreadsheets perform calculations. And how great they are for ad hoc queries, and what-if scenarios. But should you rely on spreadsheets for accounting and jobs analysis?

“Weed Wack” that data with software alternatives
Today, new software applications – in job cost accounting, project management, estimating, etc. – give you the horsepower needed to handle large amounts of data. They do it faster and with greater security than spreadsheets. And costs for construction-specific systems are relatively inexpensive (especially when you factor in improved productivity and efficiency).

Most importantly, construction-specific technologies provide what spreadsheets can't. They offer unlimited reporting capabilities, better analysis and quick consolidation/integration of data.
In general, the larger the size of you data (i.e. your increasing payroll, jobs, inventory, equipment, etc.), the more likely you have outgrown what spreadsheets can provide. More likely your needs will be better met by mid-level construction-specific software.
How do you spot spreadsheet trouble?

Here are a few signs of overdependence on spreadsheets:
  • Staffers spend more time on the manual process of building and maintaining spreadsheets than they do analyzing the actual figures.

  • It's impossible to get specific real-time information on the fly.

  • There is no centralized source of data.

  • Accuracy of the data is always in question.

Once you've identified your spreading spreadsheets, it's time to do what all smart gardeners do. Rev up that weed wacker! In construction, your construction-specific accounting software is often the most efficient tool you can use.