Is the construction industry addicted to MS Excel?

by   |    |   6 minutes  |  in Business Agility, Business Technology, Construction and Contracting, Creativity & Innovation, Digital Transformation, Research, Strategy   |  tagged , , ,

You might assume that most companies are using modern, smart business systems to control complex projects, but the reality is, the primary business system used is Microsoft Excel.

The construction industry design, build, operate and maintain some very impressive assets—bridges, airports, railway lines, buildings, hospitals, nuclear power plants, etc. However, most construction projects today are delivered late and over budget, so perhaps we should consider why this is happening. One possible cause might be that the processes and business systems that are being deployed are not allowing projects to be professionally managed.

You might assume that most companies in the construction industry are using modern, smart business systems to control these complex projects. The reality is, the primary business system used to control these projects is Microsoft Excel.

MS Excel is a great, flexible tool for adding up and changing numbers—you can do anything you like with this program. There is clearly a place for MS Excel in every business, but the construction industry has a much higher dependency on this tool than any other.

Let’s consider the following questions:

  • Why is the construction industry so addicted to MS Excel?
  • Is this approach going to be good enough in the future?

Why is the construction industry so addicted to MS Excel?

There are many reasons for this, but here are a few observations that may offer some clues to why this is happening:

Observation #1 – Culture

The culture in the industry is very traditional and risk-averse, therefore, there is big resistance to change. The industry has historically run on paper-based processes, so using MS Excel is a modern version of a paper- or document-driven process. That being said, it was an easy transition to move over from paper or documents to MS Excel.

Observation #2 – Management

If your management information is communicated through layers of MS Excel spreadsheets, each manager can easily change or hide any bad news, therefore no one can easily challenge this information as it is almost impossible to reconcile the spreadsheet numbers against any other data source. For some managers, this is good news as they can hide mistakes.

This behavior may also be magnified because the industry has often been managed using an aggressive style of management and a blame culture, which makes managers more inclined to want to hide issues.

The industry seems to thrive on an aggressive male-dominated, firefighting and reactive culture, so making decisions based on centralized databases and computer-based technology may be seen as inappropriate behavior. We are in construction, we don’t work that way!

Senior management needs critical management information to run the business. Many may think they are getting the information they need when they receive a set of MS Excel sheets every month. However, I would question the accuracy of these MS Excel reports.

In addition, there is often an army of people required to extract and manipulate the data to produce the management pack that senior management receives every month. This large administration cost is hidden, as it has always been, so management may think this is normal. Perhaps these people should be doing the job they were employed to do rather than being expensive data administrators and MS Excel manipulators?

Observation #3 – Processes

There seems to be a belief that because every project is different, that we should use a different set of processes and way of working for each project that’s based on the preferred style of a region, company or even specific project or commercial director. Why can we not run projects using the same ways of working across the business and get a consistent set of best practices deployed in the business? Yes, each project is unique, but the processes should be consistent and repeatable.

There seems to be a belief that because every project is different, that we should use a different set of processes and way of working for each project that’s based on the preferred style of a region, company or even specific project or commercial director. Why can we not run projects using the same ways of working across the business and get a consistent set of best practices deployed in the business? Yes, each project is unique, but the processes should be consistent and repeatable.

Observation #4 – Lack of control

It seems to be accepted that a lack of control is necessary, as control seems to mean that you cannot react fast enough. I often hear the comment, “I don’t want to stifle the responsive (meaning reactive) nature of the business.” An example would be allowing site-based staff to instruct sub-contractors to do work without anyone checking that they are quality assured, have the necessary skills, reputation and attributes to do the job properly.

Many of those working in senior management roles have either grown up in the industry and have worked their way up to a senior management position or are working for a family business so they may not have seen any other way of working.

Observation #5 – Department silos

A departmental, silo-based culture is usually present in these companies. This silo culture encourages people to think about point solutions rather than integrated processes and workflows. MS Excel is, therefore, the easy option.

In the end, it is always a balance between governance, freedom and flexibility and a balance between planning versus reacting. The question is, can we continue to be successful running construction businesses in this way?

Is this approach going to be good enough in the future?

The industry is delivering many projects on low margins and government Building Information Management (BIM) programs, such as the one being implemented in the UK, are adding more pressure to reduce project costs and total asset lifecycle costs as well as to deliver projects faster and to a higher quality.

Trends like offsite and modular manufacturing are accelerating, which is driving an increased focus on lean construction, manufacturing techniques and processes. In addition, global competition is increasing and the industry is at the beginning of a digital revolution with many new technologies gathering momentum (BIM, modular manufacturing, 3D printing, drones, Internet of Things, robotics, laser scanning, 4D scheduling, etc.).

With this backdrop, the industry needs to change and the companies that make the transition will be the winners in the future.

How companies need to proceed

All of this is very scary, so we have to think about how we transition from where we are now to be a lean, modern and agile company that can keep up with the accelerating pace of change to remain a viable business.

Can we make this transition if we are running our business using MS Excel spreadsheets without having a solid integrated set of information to manage the business? The MS Excel culture does not provide a solid foundation to govern a business with a set of accurate, trusted management information, and perhaps that could be a first step on the digital transformation journey.

Transitioning to an integrated, fit-for-purpose IT platform and away from MS Excel will provide a solid foundation to allow the business to be in control, adapt, change, grow and remain competitive on a global stage.

Driving Efficiency in Construction eBookFor expert advice and industry research on how to adopt an integrated, fit-for-purpose IT platform that will help you control and grow your business, download the eBook, Driving efficiency in a changing world of construction.


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