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Project Management, Vendor Management, Real Estate Technology

Six Pitfalls of Excel in Commercial Real Estate Cost Tracking Canada

By some estimates, more than 1.2 billion users, including most of the real estate industry, rely upon Microsoft Excel. While Excel is a powerful commercial tool for statistical, engineering, and financial data tracking and analysis, the software was not designed primarily for use as a collaborative platform—an environment in which the commercial real estate and construction industries thrive.

Users consider Excel and other spreadsheets the industry standard and most have at least a working knowledge thereof. Critical mass alone should not make those tools the standard for bid management, cost tracking and reporting processes involving multiple internal and external players, frequent updates, and the need to manipulate data and report out milestones.

Effective project management—particularly cost tracking—requires meaningful, regular and ad hoc reporting. Incomplete, inaccurate, or misrepresented data will not sufficiently represent the business case necessary to move projects or decisions forward, easily delaying or derailing plans.

We’ve identified six pitfalls common to project managers relying upon Excel and similar tools to track and forecast costs, level bids, and report results:

analysis-business-close-up-11798001. INFORMATION SILOS

Real estate decision makers collect and analyze centralized data ensuring faster better, and more complete conclusions. Spreadsheets often isolate data, making it difficult or impossible for each interested party to access and challenging at best to compare.

 

2. IT’S SUSCEPTIBLE TO HUMAN ERROR

Good project reporting requires accurate financial information. From typos to misaligned rows and forgotten negative signs, it’s easy to miss inaccuracies, especially when there are multiple linked or unlinked spreadsheets and workbooks. The result can range from small delays in vendor selection to underestimating the risks or liabilities projects may involve.

No software prevents all human error, but many are designed to call attention to deviations and inconsistencies automatically. Every member of your team may not be sufficiently skilled to check every cell in a spreadsheet with the same level of diligence.

 

3. IT’S TIME-CONSUMING

Without proper organization, overly complicated spreadsheets slow down project management. Copied sheets may end up with incomplete, outdated formulas, or inaccurate data; reconciling multiple versions of the same spreadsheet can be tricky, and for revisions to update, everyone must take turns making changes.

 

4. IT REQUIRES IMPECCABLE ORGANIZATION

Managing multiple versions of a spreadsheet requires standardization, including naming and numbering conventions. Additionally, all team members must follow those procedures—not an easy task, and one that grows increasingly difficult with larger teams.

 

5. CUSTOMIZATION REQUIRES DEEP KNOWLEDGE

Creating complex spreadsheets is comparable to developing custom software. Ideally, that requires a champion or project owner with a deeper understanding of the tool to create such customization, which can cost money to build and maintain. If that person leaves the company—does anyone else understand the concepts used to create those customized spreadsheets?

 

6. SECURITY IS LIMITED

While it’s possible to password protect worksheet or workbook elements, IT consultant Susan Harkins points out that it doesn’t prevent willful abuse accessing confidential or sensitive data. There’s also the threat of losing critical information if spreadsheets or workbooks are hacked, infected by viruses, experience data corruption, or aren’t properly backed up or otherwise protected.

 

For the commercial real estate and construction industries, software options with familiar spreadsheet capabilities are limited. Honest Buildings technology centralizes project cost tracking, automates workflows, standardizes reporting, and builds secure, searchable records across owners' portfolios. There are systems in place to prevent versioning problems as well as protect intellectual capital. Whatever steps you’ve taken within the software are shared across the team—so everyone’s sufficiently updated, whether team members are in the office on laptops or traveling with connected devices.

 

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Rochelle A. Carter-Wilson

Written by Rochelle A. Carter-Wilson

Rochelle is the Content Marketing Manager for Honest Buildings. She creates stories and other on-brand content to inform and engage owners and other members of the Commercial Real Estate industry.