In Part 2 of this series, we examine some of the disadvantages to using Excel as a construction estimating tool. (In Part 1, Microsoft Excel for construction: Is it the right estimating tool for you?, we looked at some of the advantages.)

To some people, there are no real drawbacks to using Excel spreadsheets for construction estimating -- they're easy to use, easy to customize and readily available. Others, however, see limitations that may appear on the horizon as a company grows:

• It may not feed other computerized systems you use, such as accounting or scheduling;
• Your projects may involve very complex calculations; or
• You’re going to do estimating as a team that has to work together on an estimate, and Excel has limited multi-user features.

Jared Hawk, owner of Hawk Education, a Boise, Idaho-based Excel training and consulting firm, says custom programming will probably be necessary in order to have Excel's construction estimating operations work straight into back office and accounting functions.

Steven Peterson, an associate professor of construction management at Weber State University and author of Construction Estimating Using Excel, points to potential challenges in getting the right data to transfer. The estimate data may have more detail than a user may want to incorporate into scheduling or project management documents, he notes.

For companies that want a standardized approach to estimating by multiple estimators, the ability to customize Excel at the user level could work counter to that.

Estimators with some knowledge of Visual Basic programming can automate processes within Excel, says Constructionsoft.com’s Christofferson; after all, that's what his firm did with its Estimator PRO product. However, he says many companies don't want customization at the user level, as that comes at the expense of standardization for their estimating operations.

Getting too big for Excel

Despite the flexibility often encountered when using Microsoft Excel for construction estimating, for many firms there comes a time when that won't be enough.

For large companies with multiple estimators, Excel will offer each of them greater individual flexibility. However, that will come at the price of less company-wide standardization within the estimating function. Moreover, if those same companies are working on complex projects, Excel may not perform as efficiently as specialty construction estimating software that comes with the processing power necessary for complicated calculations.

For all companies Excel comes with challenges in terms of integrating it with other office functions.

Comprotex Software’s Hall notes how his company devoted hundreds of hours to trying to integrate an Excel estimating template with a popular business accounting package, to no avail. In the end, he says, the accounting software makers admitted there was no way to do it while still maintaining full functionality.

Outgrowing Excel as an estimating tool appears to be largely dependent upon the sector a builder is in and the size of the builder’s business, Hawk says. He sees the sky as the limit for residential and remodel contractors, but he also cautions that keeping up a database and debugging for multiple users can become challenging.

For example, if one user makes a change to a formula and doesn’t verify that the formula is accurate, then other users will be getting erroneous results without knowing, Hawk points out. Likewise, erroneous entries of prices in the database cells by one user may not be picked up by other users -- and estimates would end up being inaccurate.

Ultimately, one part of the decision about whether or not to adopt Excel for construction estimating depends on how much time is available to set it up for the task and how much time will be available to maintain the formulas and database. This may become more work than some contractors want, Hawk says.

"There is the initial set up time for the estimate and then you have got to verify and test all of your formulas to make sure you have got it done correctly, whereas with a commercially available product you pay for that and they take the liability in exchange for your money," he explains. "So, if you get to the point that you don't have the time to keep it up and to verify the integrity of your data, then I would say that you should start looking for other solutions."

*** In Part 3 of this article series, Microsoft Excel for construction: Plug-ins add estimating power, find out why some contractors choose pre-designed Excel templates for their construction estimating functions.