The Problem with Spreadsheets for Capital Planning, Part 1: Manual Data Entry
When we start talking with facilities directors and planners about facility capital budgeting, we often find that many first tried using spreadsheets to manage their capital planning and facility condition assessments processes. Initially, they find spreadsheets useful for storing, organizing and reporting data. However, when it comes to effective capital planning for large portfolios, facilities professionals soon learn that spreadsheets lack key capabilities, including built-in cost estimation based on industry norms, objective project prioritization, centralized data storage, and the ability to scale.
While spreadsheets are easy to use, they also have significant limitations for professional facilities managers. In this series of blogs based on our new white paper, The 5 Limits of Spreadsheets for Facilities Capital Planning, we will detail key problems with using spreadsheets for facilities capital planning.
Spreadsheet Limit #1 - The Perils of Manual Data Entry
Manual data entry is time consuming and often results in errors. According to Professor Raymond Panko of the University of Hawaii, “Spreadsheets, even after careful development, contain errors in one percent or more of all formula cells. In large spreadsheets with thousands of formulas, there will be dozens of undetected errors.” He also notes that, “Even when a task was selected to be very simple and almost completely free of domain knowledge requirements, about 40% of all spreadsheets contained errors, and the [Cell Error Rate] was about 2%.”
Spreadsheet errors can have a major impact on business results as inaccurate data is propagated throughout an organization. Manual data entry, especially into spreadsheets lacking standardization and controls is inefficient and ultimately yields numbers that cannot be trusted for accurate decisions.
Facilities capital planning software, on the other hand, has built-in logic and automation that can improve efficiency and reduce errors. Embedded cost estimation standards can improve forecast accuracy and ensure consistency. The use of phones and tablets for mobile data collection can also enable rapid data capture and seamless uploading directly into centralized software, reducing errors while also saving time.
Capital planning software helps organizations objectively model multi-year capital plans that optimize building portfolio investments and align with their mission.
Want to learn more about using spreadsheets to manage your facilities and asset portfolio? Download the white paper, The 5 Limits of Spreadsheets for Facilities Capital Planning.