Database or spreadsheet. What’s the difference, anyway?

To address this question it’s easiest to look at estimating from a historical perspective: Once upon a time, every contractor created estimates by hand. He/she would pull out a pad of paper and pencil, jot down some figures line by line, then sum up each item to achieve the estimate. This was a simple and effective way to create a bid, but human error, inflexibility, and time consumption left plenty of room for improvement.

 

To address this question it’s easiest to look at estimating from a historical perspective: Once upon a time, every contractor created estimates by hand. He/she would pull out a pad of paper and pencil, jot down some figures line by line, then sum up each item to achieve the estimate. This was a simple and effective way to create a bid, but human error, inflexibility, and time consumption left plenty of room for improvement.

With the advent of computers, anybody with an ounce of technical savvy immediately recognized the benefit of using spreadsheets; it’s faster, making changes is easy, and computers are great at math! Evidently the term “spreadsheet” at one point (before my time) referred to a physical sheet of paper in which data was laid out in a grid format. These days when someone refers to a “spreadsheet” they are most likely referring a type of file created in programs like Microsoft Excel. Data is still laid out in rows and columns as in the paper variety, but the capability to integrate formulae and build relationships between the “cells” (the box where a row and column meet) make electronic spreadsheets much more powerful and MUCH more useful. While this is a big step up from doing things by hand, spreadsheets still have their limitations: Making changes that will apply to an entire document can be tricky, tracking change-orders can be challenging, and the flexibility that only spreadsheets can offer also means a lot can go wrong in the hands of someone inexperienced with the technology. Additionally, those with good attention to detail will add so many line items that the spreadsheet quickly becomes aggravatingly long and cumbersome. For these reasons, it is oftentimes best to work with the next technological “step up,” a database.

It sounds intimidating, I know. If spreadsheets can be difficult to use, how in the world are you supposed to learn how to build a database? A number of contractors have successfully developed customized Microsoft Access database-based applications but, unless you have a Ph. D. in computer science, taking this route probably isn’t worthwhile. Good news: A number of companies (such as Clear Estimates and Methvin, Inc, of course) have already taken care of this for you! Database-based programs are more powerful than spreadsheets because they utilize one centralized location (the “database”) that contains multiple tables full of data that are all linked and interdependent. As complicated as this sounds, a well-designed database-based system is very easy to use; these programs ideally utilize nice looking “graphical user interfaces” (pretty screens) that present the data in convenient and easy-to-understand formats, as opposed to spreadsheets that put you face-to-face with the raw data. Not only are these programs easier to use and more powerful, but they also have the potential to incorporate additional features like integration with QuickBooks, generation of various reports, scheduling, and other things that are difficult or impossible using a spreadsheet.

So which method is the best? It depends on your style and your company. The trend has been to adopt more sophisticated database-based methods, but what it ultimately comes down to is finding a system that is robust, flexible, and can be set up to mimic your estimating style. These days there’s no excuse for doing things by hand. A plethora of options exist in estimating software, database and spreadsheet-based alike, so there’s no reason you can’t set up a system to work well for your company.

-Nolan Orfield�