Understanding spreadsheet risks www.e7.site

Understanding the risks of spreadsheets in construction project management

eBook

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Understanding spreadsheet risks

Contents

Introduction

Spreadsheet benefits

Spreadsheet risks

Productivity

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Understanding spreadsheet risks

Introduction01

Spreadsheets are almost ubiquitous within the construction

industry. They are used at all stages of the project delivery

including: estimation, reporting, progress analysis, cost analysis,

time capture, docket reconciliation, punchlisting, safety tracking,

etc.

Without spreadsheets most construction projects could not function

and for good reason, because spreadsheets offer some powerful

benefits and most construction project professionals would

consider them a vital tool.

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Understanding spreadsheet risks

Spreadsheet Benefits02

Simple to use

Spreadsheets are simple to create, copy and share as almost all

project professionals have access to Microsoft Office as part of

their standard desktop environment.

Flexible and customisable

Spreadsheets are highly customisable allowing the creation of

print-ready reports, macro-enabled and linked with external data

sources.

Fast data entry and manipulation

For numeric work spreadsheets support fast data entry and formula

based manipulation and charting of data. This makes them a

standout choice for most data entry tasks.

Powerful data analysis

Spreadsheets are great for adhoc data analysis with simple tools for

filtering, sorting, pivoting and visualising data.

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Understanding spreadsheet risks

Spreadsheet Risks03

Unfortunately, the benefits and features of spreadsheets are the

very reason they represent a huge risk to reliable data management.

Forbes Magazine referred to spreadsheets as the ”most dangerous

software on the planet” and there is a Spreadsheet Risks Interest

Group that documents these risks and details significant errors that

have resulted. A couple of well known examples include:

• Election vote counting in Malaysia

• Financial reporting to London stock exchange

• Misinterpretation of human genome data

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Understanding spreadsheet risks

Spreadsheets are error prone

Research shows that over 90% of spreadsheets (with more than

150 rows) contained errors and 23% contained serious errors.

This is because it is very difficult to find and fix calculation errors.

Hence errors are commonplace, but still, administrators, engineers

and managers rely upon them for everyday work – even when

alternatives exist.

Spreadsheets inhibit collaboration

Spreadsheets quickly become data silos preventing integration

with enterprise systems and consistency across different versions.

In a single user environment this isn’t a major issue, but in larger

projects where data capture, analysis and reporting occurs across

multiple teams, the need to share and integrate data is much

greater. This makes spreadsheets a major barrier to collaboration

requiring significant manual data manipulation.

Spreadsheets are difficult to maintain

Spreadsheets are simple to customise and most users love to

personalise their work. However, merely adding conditionally

formatting, a embedded formula or a pivot table makes a

spreadsheet difficult to maintain and/or reuse because the

behaviour is hidden. Furthermore, adding macros and cross linking

with other spreadsheets compounds the potential problems.

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Understanding spreadsheet risks

Lack of audit trail

A major challenge with spreadsheets is the lack of audit history. A

shared spreadsheets that has data entry or update from multiple

users cannot be easily versioned to identify the changes each user

made. Often multiple versions of the same spreadsheet are saved

with different filenames as a crude solution, however this provides

no guarantee of integrity.

Security risks

Spreadsheets can easily contain sensitive data relating to

estimates, rates, claims etc. And these are prone to being copied

and emailed. Additionally, should your spreadsheet contain a

connection to a corporate database, sharing the spreadsheet may

be equivalent to sharing access and the contents of that system.

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Understanding spreadsheet risks

Productivity04

Finding and fixing errors can have a very detrimental effect on team

productivity and decision making.

Tracking down an error in a complex spreadsheet can take much

longer than it did to create the spreadsheet. Reducing the likelihood

of errors is therefore at least as much an efficiency issue as an

error-prevention.

Summary

The most effective way of reducing the risk of spreadsheets is to

invest in dedicated systems for managing construction delivery.

Favouring systems for common construction challenges like cost

capture, progress capture and daily or weekly metrics and reporting

is a cost effective and practical alternative to using spreadsheets

and will help minimise the above risks.

Understanding spreadsheet risks www.e7.site

Understanding the risks of spreadsheets in construction project management

E7 is the leading field-based construction delivery platform, connecting

project leaders with real-time insights and providing unparalleled

visibility of project performance. With daily clear line of sight, E7 fills the

gap between each end-of-month financial reporting cycle.

Contact E7 on +61 7 3369 0038 for more information on replacing

spreadsheets with a purpose built construction system.

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