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Research indicates that spreadsheets are a ubiquitous tool in today's business landscape, with 81 percent of businesses using them daily. Among these, construction companies are prominent users, with virtually everyone working on construction finance relying on spreadsheets for their daily financial operations. However, the question arises: do spreadsheets still make sense in the context of the current digital ecosystem? This is especially relevant as the construction industry is increasingly embracing digital transformation in various facets, including automation and AI integration.
Construction has a spreadsheet problem
The construction sector faces a distinct spreadsheet challenge. Excel has historically played a crucial role in managing data for construction projects. Nevertheless, these formula-laden spreadsheets struggle to keep pace with the rapid data analytics demands of today. Regrettably, many construction companies cling to traditional practices, mainly due to the fact that construction technology has been left behind in the 80s.
Here are several reasons why spreadsheets create friction and challenges in today's data-driven environment:
Lack of collaboration
Spreadsheets excel at data organization but fall short when it comes to collaborative work. They restrict concurrent access, making data sharing cumbersome and slow moving. Additionally, deciphering complex financial projection spreadsheets can be daunting, often relying on legacy knowledge.
Spreadsheets offer limited built-in security, often protected by basic login passwords. This poses a significant problem, particularly considering the amount of data recorded in the architecture, engineering, and construction (AEC) industry. Many finance and accounting departments heavily rely on spreadsheets for decision-making, which makes them vulnerable to breaches.
Manual data entry
It’s common knowledge that spreadsheets are prone to errors, one widely accepted report says 88% of epreadsheets include errors in their cells. With a benchmark across all industries of a 1% error rate for manual data entry it seems there are errors everywhere. Those undetected errors can significantly impact decision-making processes for businesses.
Each person uses Excel differently, leading to a lack of standardization. This variability fosters tribal knowledge, consumes time, and causes confusion within construction firms.
Lack of scalability
Expanding or maintaining spreadsheets can be problematic. Creating new spreadsheets or continually adding data to existing ones increases complexity and the potential for errors.
Spreadsheets offer static data, which is insufficient for managing the massive volumes of data in today's construction companies. Real-time insights are increasingly essential.
The solution to these issues lies in embracing financial automation and integrating artificial intelligence within the construction sector. In the age of digital transformation, where technologies like robots and data analytics are becoming commonplace, spreadsheets may no longer be suitable for handling finances, demand, and projects.
The role of AI and automation in construction finance
PwC and Oxford Economics' research on workforce digitalization highlights that digital investments in AEC companies have not always generated the expected value. The misalignment between digital investments and business strategies is a significant factor contributing to this issue. While construction companies invest in cutting-edge technologies for the field, there is no corresponding technology to improve upon their financial, forecasting, and project management strategies.
To succeed in this digital era and unlock the potential for increased productivity and cost reduction, construction companies need to fully embrace digitization and align their digital investments with their overarching business strategy. This transformation requires moving away from traditional spreadsheets and adopting intelligent platforms that leverage AI, machine learning, and real-time data feeds to generate accurate financial information, automate mundane tasks, and provide project-centric analytics.
Platforms like Briq are at the forefront of this transformation, offering financial automation solutions that help construction companies achieve efficiency and profitability. By integrating AI, machine learning, and real-time data feeds, Briq generates accurate financial forecasts, aiding in project management, financial decision-making, and overall digitization of the organization.
In conclusion, the construction industry cannot afford to remain half-digitized. To reap the rewards of digital transformation, it's essential to bind every digital investment to a strategic plan. This process requires discarding spreadsheets and embracing advanced, AI platforms like Briq, which seamlessly connect financials, project analytics, and automation to improve and modernize your business. If you want to learn more about Briq, talk to our team.